Foreign Corporation Capital Increase Procedures and Filings, Organized by Practical Workflow
A capital increase for a foreign-invested corporation proceeds in the following order: amend the foreign investment notification → wire the investment funds → pass board/shareholder resolutions to issue new shares → register the change → file post-completion notifications.
This applies to foreign-invested enterprises (FDI corporations) registered under the Foreign Investment Promotion Act, as well as ordinary Korean corporations that have foreign shareholders.
This guide focuses on paid-in capital increases at FDI corporations and walks through the sequence, documents, and filing checkpoints that most often trip up practitioners.
Start by Understanding the Basic Structure of a Foreign Corporation Capital Increase
The Two Forms of Capital Increase
Capital increases at foreign corporations broadly fall into two types: paid-in and bonus.
A paid-in capital increase is when a foreign shareholder actually wires new funds, and the capital stock grows as a result.
A bonus capital increase transfers retained earnings into capital stock, so no remittance is involved.
In practice, the paid-in type — where a foreign shareholder injects additional capital — is by far the most common.
It comes up especially often when companies need to meet capital requirements for D-8 visa renewals or other thresholds.
Are You Subject to Filing Under the Foreign Investment Promotion Act?
The first thing to check is whether your corporation falls within the scope of the Foreign Investment Promotion Act.
If a foreign investor commits at least KRW 100 million and holds 10% or more of the voting shares, the entity qualifies as an FDI corporation.
Once registered as an FDI corporation, any capital increase requires you to either submit a new foreign investment notification or file an amendment.
For the underlying statutes, refer to Articles 5 and 6 of the Foreign Investment Promotion Act, available through the Ministry of Trade, Industry and Energy and the Korea Law Information Center.
Whether a particular case is subject to filing isn't always obvious — it depends on the shareholding structure, so a preliminary review is essential.
Three Things to Verify Before You Start
Check the Articles of Incorporation and Authorized Share Count
A frequently overlooked item is whether the new issuance will exceed the total number of authorized shares in the articles of incorporation.
If you go over that limit, the articles themselves must be amended first, which adds a special resolution at the shareholders' meeting.
Miss this, and you'll get stuck at the registration stage.
Before the capital increase, pull out the articles and confirm the authorized share count, par value per share, and class of shares.
Review Your Existing FDI Notification Records
You'll want to confirm that the previously notified FDI amounts, the actual remittance records, and the registered capital amounts all match.
In practice, you often discover mistakes such as wrong exchange rates applied at the time of past filings, unregistered residual balances, or missed Bank of Korea reports.
These legacy gaps frequently surface during a capital increase filing.
How Capital Requirements Connect to Visa Status
The visa side is actually where things stall most often.
If the foreign representative holds a D-8 (corporate investment) visa, you need to check that the post-increase capital is consistent with that visa's requirements.
Sometimes the increase itself is straightforward, but explaining the source of funds during visa renewal becomes the harder problem.
Visa-specific implications vary case by case, so confirm the exact application through a consultation in advance.
The Foreign Investment Notification and Remittance Stage
Submitting the Foreign Investment Notification
Foreign investment notifications for a capital increase can be filed through KOTRA or a foreign exchange bank.
The basic documents required at the notification stage are summarized below.
| Category | Document | Notes |
|---|---|---|
| Investor | Foreign Investment Notification | Specify the new share acquisition method |
| Investor | Proof of nationality | Passport copy or corporate registry |
| Corporation | Board resolution (planned) | Resolution to issue new shares |
| Corporation | Business registration certificate copy | Korean corporation |
| Other | Power of attorney | When filed by proxy |
The notification looks simple on the surface, but in reality people get stuck on classifying the investment type and calculating the equity ratio.
Wiring the Investment Funds and the Foreign Exchange Bank Process
Once the notification is accepted, the foreign shareholder wires the capital, under their own name, into the Korean corporation's account.
The wire must clearly state the purpose as 'Capital Contribution (Foreign Investment)'.
This is where outcomes diverge. If the funds arrive as a plain remittance, the capital recognition becomes tangled later and has to be reworked.
After the wire, the foreign exchange bank handles the issuance (or amendment) of the Foreign-Invested Company Registration Certificate.
Processing times and form requirements differ slightly from bank to bank, so it pays to identify the fastest one in advance.
Securing Remittance Evidence
In practice, you should retain the wire receipt, foreign currency purchase certificate, and deposit confirmation — all of them.
Weak documentation here will undermine your fund-flow story at the registration, tax, and visa stages later on.
Practical tip: In the wire memo field, write 'Capital Increase / Shareholder Name / Company Name' in English to reduce misclassification on the bank's side.
New Share Issuance and Corporate Registration
Board and Shareholder Resolutions
The resolving body for a capital increase depends on the company form.
For a stock corporation, a board resolution suffices if the articles delegate authority; otherwise, a special shareholder resolution is required.
The governing provisions include Article 416 of the Commercial Act and related articles, which can be reviewed at the Korea Law Information Center.
The minutes must precisely state the number of new shares, issue price, payment due date, and subscribers.
New Share Subscription and Payment
Once the foreign shareholder subscribes for the new shares and the wired funds settle in the capital account, payment is complete.
The payment completion date is what triggers the registration obligation.
Caution: If the funds don't arrive by the payment due date, those shares lapse and the entire procedure has to be restarted for that portion.
Filing the Amendment Registration
The capital amendment registration must be filed with the competent registry office within two weeks of the payment date.
Missing the deadline can trigger an administrative fine.
The registration packet typically looks like this.
| Document | Prepared/Issued by | Notes |
|---|---|---|
| Application for amendment registration | Corporation (Representative Director) | Reflects changes in capital and total issued shares |
| Board or shareholder meeting minutes | Corporation | Confirm whether notarization is required |
| Subscription form | New share subscriber | Foreign shareholder signature |
| Payment certificate | Foreign exchange bank | Confirms payment into the capital account |
| Foreign investment notification (copy) | Investor | The accepted notification |
Are You Stuck at One of These Stages Right Now?
A capital increase is the kind of process where a single misstep tangles registration, tax, and visa matters all at once.
For accurate costs and procedures, please confirm through a professional consultation.
Consultation phone: 02-363-2251 / KakaoTalk: alexkorea
Costs vary case by case and will be quoted precisely during your free consultation.
Post-Increase Filings and Tax Handling
Updating the Foreign-Invested Company Registration
After the registration is complete, the capital amount and share count on the Foreign-Invested Company Registration Certificate must be updated.
This amendment registration is done through a foreign exchange bank or KOTRA.
Skip this step, and the government's statistics will diverge from your actual capital — a mismatch that tends to surface later during visa or tax reviews.
You can find an overview of the amendment procedure on the KOTRA Foreign Investment portal.
Bank of Korea Foreign Exchange Transaction Report
Because this is a capital transaction, you should also check the Bank of Korea foreign exchange reporting requirements.
Separate from the foreign exchange bank's report at the remittance stage, additional reporting may apply depending on your specific transaction structure.
Reporting obligations vary with the transaction setup, so verify your specific case in advance.
Tax Office Filings and Updating the Shareholder Register
Share changes resulting from the capital increase must be reflected in the Statement of Changes in Stock filed with the tax office.
Missing this at the corporate tax filing date exposes you to penalty tax risk.
The shareholder register also needs to be updated to reflect the newly issued shares.
Follow-up Checks on Immigration Matters
If the representative holds a D-8 visa, the post-increase capital amount can trigger changes in residency status.
For visa procedure details, see the HiKorea or Korea Immigration Service websites.
Visa implications vary case by case, so review your specific situation in advance.
Common Practical Issues and How to Handle Them
When the Remittance Comes Under a Different Name
If the funds are wired under someone other than the foreign shareholder, the transfer can be denied foreign investment recognition.
Disputes frequently arise when funds come from a corporate account, a family member, or a related company instead of the shareholder directly.
When Exchange Rate Differences Throw Off the Capital Amount
It's common for the capital figure to deviate from the notified amount by a few won, due to differences between the rate at notification and the rate at actual remittance.
In such cases, the capital is generally fixed based on the actual KRW amount received, and a foreign investment notification amendment is used to align everything.
Discrepancies Between Articles, Registration, and Tax Records
Some long-standing foreign corporations have articles, registration records, and tax filings that have drifted apart from one another over the years.
When all of these inconsistencies surface at once during the capital increase filing, the workload can balloon to two or three times what it should be.
Caution: Right before the increase, lay out the articles of incorporation, the certified corporate registry, and the foreign investment registration certificate side by side, and verify that capital, share count, and shareholder composition all line up.
Frequently Asked Questions (FAQ)
Q1. Does a bonus capital increase also require a new foreign investment notification?
A. Because there's no remittance, a bonus increase doesn't constitute new foreign investment — but the capital amount and share count on the Foreign-Invested Company Registration Certificate still need to be updated. Treatment varies by case, so verify in advance.
Q2. Can the foreign parent send funds to a Korean subsidiary's account instead of remitting directly?
A. To be recognized as foreign investment, the funds must move directly from the foreign shareholder's own overseas account into the Korean corporation's capital account. Routing through an intermediary account often blocks capital recognition.
Q3. How soon after the remittance do I need to register the capital increase?
A. Under the Commercial Act, the rule is amendment registration within two weeks of the payment date. Missing the deadline can trigger an administrative fine, with actual assessment criteria varying by registry office.
Q4. Does a capital increase help with D-8 visa renewal?
A. A larger capital base can strengthen the visa case, but other factors — source of funds, revenue, employment — are reviewed alongside. Visa decisions don't hinge on capital alone.
Q5. Is the procedure the same when a single foreign shareholder owns 100%?
A. The core procedure is the same, but a single-shareholder setup shortens the meeting process and changes how the minutes are drafted. Depending on what the articles delegate, a board resolution alone may be sufficient.
Q6. How much does a capital increase cost?
A. Registration license tax, local education tax, registry fees, and administrative handling costs all scale with the size of the increase. Costs vary case by case and will be quoted precisely during your free consultation.
Need Professional Guidance?
For a foreign corporation, a capital increase ties together foreign investment notification, remittance, registration, post-filings, tax, and visa — every step linked in a single chain.
A weak link at any point throws off everything downstream.
Vision Administrative Affairs Office specializes in the setup and capital-increase work of foreign corporations.
- Phone: 02-363-2251
- Email: 5000meter@gmail.com
- KakaoTalk: alexkorea
- Address: 3F, Seongwoo Building, 324 Toegye-ro, Jung-gu, Seoul 04614
When a capital increase schedule overlaps with a visa timeline, getting the order wrong can stall the visa review — so a preliminary check is strongly recommended.
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