Opening a corporate bank account in South Korea is an essential step for businesses looking to establish a presence or expand their operations in the country. South Korea boasts a robust and technologically advanced banking system, making it an attractive destination for both local and international businesses.
By opening a corporate bank account, businesses gain access to a range of financial services, such as making and receiving payments, managing payroll, conducting transactions, and obtaining financing. However, the process of opening a corporate bank account in South Korea involves specific requirements and procedures that must be followed to ensure compliance with local regulations.
STEPS FOR OPENING A CORPORATE BANK ACCOUNT IN SOUTH KOREA
- Research and choose a bank
Look for banks in South Korea that offer services and features that meet your needs. KEB Hana Bank, Shinhan Bank, and KB Kookmin Bank are some of the popular banks in South Korea.
- Visit the bank branch
Once the applicant has the documents ready, visit the bank branch in person. No appointment is necessary for opening a bank account.
- Queue and wait for your turn
Upon arrival at the bank, select a queue ticket if available. Depending on the bank’s size and location, there may be English-speaking staff available, but in some cases, the applicant might need to wait until such a staff member is present.
- Communicate your request
On their turn, the applicant must inform the bank staff that they would like to open a bank account. If necessary, they can ask if there is an English-speaking staff member available to assist them.
- Fill out the application form
The bank staff will provide them with an application form to fill out. Complete the form with accurate information and double-check for any errors.
- Submit your documents
Present the required documents such as the passport or Alien Registration Card, proof of address, Alien Registration Card or visa, and Korean phone number.
- Provide additional information
The bank staff may ask the applicant for additional information, such as their purpose of opening the account and their source of funds.
- Choose an account type
The applicant must select the type of account they wish to open, such as a savings account or a checking account. The bank staff will guide them through the available options and their respective features.
- Initial deposit
Some banks may require an initial deposit to activate the account. Make sure to ask about the minimum deposit amount and provide the necessary funds.
- Receive your account details
Once the account is successfully opened, the bank will provide the applicant with their account details, including the account number, online banking information, and any associated cards.
- Set up online banking (optional)
If the applicant wishes to access the account online, they should ask the bank staff for instructions on how to set up online banking. They will provide them with the necessary information and guide them through the process.
SOUTH KOREA BANK FEES AND MINIMUM DEPOSITS
The majority of financial institutions in Korea provide no-fee bank accounts, while regulations differ from bank to bank. Finding banks without a minimum deposit requirement or monthly service charges ought to be simple. However, unless the applicant chooses a special account, they will pay a withdrawal fee each time they use an ATM owned by a different bank. They will also likely have to pay a modest cost for the ATM card.
Anything requiring labor will be charged. Performing a transaction at the teller, for instance, will often result in a service fee. Similar to using a teller, conducting transactions online might also cost a little fee, although it will be less than that.
Receiving the Card
The applicant should get the bank card the same day they create an account. Additionally, a passbook for keeping track of all of their financial activities and a PIN code generator for the card will be provided. English translations in mobile apps are still limited, despite English usage increasing across Korea. For the banking needs, the applicant will most likely be able to use an app, but the services will be restricted.
ADVANTAGES OF OPENING A CORPORATE BANK ACCOUNT IN SOUTH KOREA
- Access to a Developed Banking System
South Korea has a highly developed and sophisticated banking system, offering a wide range of financial services and advanced technology. Businesses can benefit from efficient online banking platforms, secure transactions, and access to various financial products.
- Strong Financial Infrastructure
South Korea’s financial infrastructure is robust, with a well-regulated banking sector and strict compliance standards. This provides businesses with stability, transparency, and confidence in their financial operations.
- International Business Hub
South Korea is a significant hub for international business, particularly in industries like technology, automotive, and manufacturing. Opening a corporate bank account in South Korea can enhance your company’s reputation and facilitate business relationships with local partners and suppliers.
- Government Support and Incentives
The South Korean government offers various incentives and support programs to encourage foreign investment and business growth. This includes tax benefits, subsidies, and grants, which can be accessed more easily with a local corporate bank account.
- Convenient Business Transactions
Having a local corporate bank account simplifies day-to-day business operations, such as making and receiving payments from local clients, paying suppliers, managing payroll, and conducting transactions in the local currency (Korean Won).
DISADVANTAGES OF OPENING A CORPORATE BANK ACCOUNT IN SOUTH KOREA
- Language Barrier
Although some banks in South Korea have English-speaking staff, the majority of banking procedures, documents, and customer support services are conducted in Korean. Language barriers may pose challenges for businesses that do not have fluent Korean speakers within their teams.
- Limited International Banking Options
Compared to some global financial hubs, South Korea may have fewer options for international banking services. This can be a disadvantage for businesses with significant cross-border operations or those requiring complex financial services not readily available in the local market.
- Potential Exchange Rate Risks
If your business deals with multiple currencies, the fluctuating exchange rates between the Korean Won and other currencies can introduce a level of currency risk. This risk can impact the profitability and financial stability of your business.
Reach out to us at Relin Consultants for further assistance with your corporate bank account opening in South Korea.
REQUIREMENTS TO OPEN A BANK ACCOUNT AS NON-RESIDENT IN SOUTH KOREA
The Alien Residence Card is one of the most important documents needed to open a bank account in South Korea as a non-resident. It is also one of the most significant challenges for expats. This card is required to open a Korean bank account as a non-resident. However, it could take up to a month to get the ARC when the applicant initially arrives in South Korea. Since most banks are aware of this, they should still be able to open an account, but with some restrictions. For instance, the applicant might be allowed to use a bank account only in person to withdraw cash.
To open an account, the applicant must also supply the following documents in addition to the ARC:
- a passport
- Korean visa
- Korean Phone number
The applicant might also be required to provide a certificate of employment or school records if they are a student, depending on the reason for moving to Korea.
Can a foreign-owned company open a corporate bank account in South Korea?
Yes, foreign-owned companies can open a corporate bank account in South Korea. However, they need to provide additional documentation, such as a copy of the company’s articles of incorporation, business registration certificate, and documents showing the legal representative’s authority to act on behalf of the company.
Are there any minimum deposit requirements for opening a corporate bank account?
Yes, most banks in South Korea require a minimum deposit to open a corporate bank account. Depending on the bank and the type of account, a minimum deposit may be required. It’s important to inquire with the specific bank about their minimum deposit requirements.
Can I open a corporate bank account remotely or online?
No, opening a corporate bank account in South Korea typically requires an in-person visit to the bank. Remote or online account opening is not generally available for corporate accounts. However, some banks may offer limited online services once the account is opened.
Are there any restrictions on transferring funds internationally from a South Korean corporate bank account?
South Korea has certain regulations and reporting requirements for international fund transfers. Businesses may need to provide documentation and details regarding the purpose of the transfer, beneficiary information, and compliance with foreign exchange regulations. It’s advisable to consult with the bank to understand the specific procedures and requirements for international transfers.
Can I have multiple signatories or authorised persons for a corporate bank account?
Yes, many banks in South Korea allow for multiple signatories or authorized persons to operate a corporate bank account. The specific procedures and requirements may vary among banks, so it’s recommended to discuss this with the bank during the account opening process.
Is it necessary to have a Korean business registration or address to open a corporate bank account?
Yes, having a Korean business registration and a registered address is generally required to open a corporate bank account in South Korea. The bank will typically request documents such as the company’s business registration certificate and proof of address. However, some banks may have specific services or account options for foreign companies without a Korean business registration.