...Doing Business in South Korea important disclaimer No person should act or rely upon any matter on information contained in or implied in this publication without first obtaining advice from a qualified adviser that relates specifically to their particular circumstances. This publication should not be regarded as offering a complete explanation of the taxation matters referred to. The publishers and the authors are not responsible for the results either of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, who acts or fails to act as a consequence of reliance upon the whole or any part of the contents of this publication. Contents Chapter 1 – Introduction • Geography • Climate • • • • • • • • • • • 6 6 6 6 7 7 8 8 9 9 10 10 11 ¡ ¢ Language and Currency Legal System Advantages of Investing in Korea Constitution Economy Import Controls Major Exports and Imports Communications Finance Government Policy on Foreign Investment in Korea Exchange Controls Chapter 2–Business Forms Available to Foreign Investment • • • • • • 13 £ ¢ £ ¢ Local Corporation Establishment Private Business Registration Establishment of a Foreign Company's Domestic Branch Directors Registration requirements and filing procedures for public securities Shareholdings by non-residents Chapter 3 – Accounting ...
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...International Taxation Allison Auld Keller Graduate Intnl Acct & Multinatl Ent ACCT-564-61900 Professor Nauri Ahmed December 08, 2012 International Taxation Do you know that corporations pay taxes? Well they do. No matter if they are a mom and pop shop or a multinational corporation. The big question is how do companies that go international know what taxes they pay? Well your multinational companies do what we call treaty shopping to find out what taxes each country has that will affect the bottom line of the company. In this paper it will define international taxation, define treaty shopping, and define tax haven and what factors that a multinational company looks at that effect the placement of the company’s headquarters. In today’s society more and more corporations want to go international or become a multinational corporation, at the same time there is a growing concern on different tax laws of the different countries. To have a complete understanding of multinational taxation we must first define what international taxation. According to Wikipedia “International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country's tax laws. (Unknown, 2012)” The governments of the different countries make up the different tax laws base on if it is residential or commercial income. Some countries have a taxation system in place while other does not. The...
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...Chapter 2 Worldwide accounting diversity Chapter Outline I. Considerable differences exist across countries in the accounting treatment of many items. These differences can result in significantly different amounts being reported in the financial statements prepared by companies using different GAAP. II. A variety of factors influence a country’s accounting system. A. Legal system – in code law countries, accounting rules tend to be legislated; common law countries tend to have a non-legislative organization that develops accounting standards. B. Taxation – financial statements serve as the basis for taxation in many countries. In those countries with a close linkage between accounting and taxation, accounting practice tends to be more conservative so as to reduce the amount of income subject to taxation. C. Providers of financing – in those countries in which family members, banks, and the government are the major providers of business finance, there tends to be less demand for public accountability and information disclosure. In countries where shareholders are a major provider of financing, the demand for information made available outside the company becomes greater. D. Inflation – countries with chronic high inflation adopt accounting principles in which traditional historical cost accounting is abandoned in favor of inflation adjusted figures. E. Political and economic ties – through previous colonization, a British style of accounting...
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...In between the seventh and eighth centuries C.E. Japan was influenced by Chinese cultural in many ways other than Korea and Vietnam were. For example china had a major impact on all three civilizations however Japan was the only one that didn’t get conquered unlike Vietnam and Korea. Japan was also much farther away from china than Korea and Vietnam were. Japan was influence by china in many ways, for example japan began to barrow Confucianism, Language, Buddhism, Chinese art & architecture, and not to mention Chinese government structure. In 646 the Japanese emperor introduced administrative reforms, the Taika reforms, which intended to remake the Japanese government like a Chinese model. On the other hand, Korea and Vietnam were much closer to china, which made it easier for china to conquer them. When the Han invaded Korea it split into 3 kingdoms the Koguryo, the Silla, and the Paekche. Koguryo adopted Buddhism, the Chinese code of law, the taxation system, and the bureaucracy. The Silla military followed a code combining Chinese belief systems (Buddhism and Confucianism). Last, the Paekche adopted some Chinese styles for their art and architecture, but their styles were still unique. The Koreans also adopted the Chinese writing system. The Vietnamese on the other hand saw the benefits of China's technology and achievements, but felt the need to preserve their own identity and didn't want to be swallowed by China's culture. Vietnamese culture was very different than...
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...Taxation in low income countries A vital issue Ashok Shumshere JBR 2009-11-02 1:01 PM The topic of taxation has experienced a comprehensive change of structure since last many years. With the beginning of supply side taxation, role of taxation has become more significant. Taxation is not only an effective instrument for resource mobilization — a “boot strap operation for financing economic development-but also a ‘tool kit’ for revenue collection to sustain growth and maintain equity and stability in the economy. If blood circulation is essential to keep the human body alive so is taxation to keep the economy alive. Developing countries suffer from dearth of revenue because of low taxable capacity as the majority of people live below the poverty line with hardly any capacity to pay taxes to the government. On top, legal base of taxation is condensed with unrestricted tax shelters and tax administration is short of modern mechanism to spot new tax payers and bring them into the orbit of tax- net. According to the theory of structural change of taxes during the developmental process, the contribution of direct taxes will grow with the rise in per capita income, in turn the contribution of indirect taxes will comparatively slow down. Direct taxes have tactical importance and its preference over indirect taxes is claimed on the ground of neutrality, welfare and excess burden. With time, it has been established that direct taxation gives the best accountability...
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...Situation The United States-South Korea Free Trade Agreement (KORUS FTA) is a trade agreement between U.S. and South Korea. Signed on June 30, 2007 by President George W. Bush still has to be approved by Congress. This Free Trade Agreement would be the largest for South Korea and the second largest for US, after the NAFTA. As the fourteenth largest economy of the world, South Korea is the seventh largest trading partner of the United States. An agreement was reached in which it was concluded that an FTA between both countries would increase the investments industry and bilateral trade. In the proposed FTA issues like trade, investments, autos, agricultures, and financial services were included. However, there has been some dispute over the KORUS FTA (mainly about the auto and agricultural industry), which hasn’t allowed it to be finalized. U.S. debates about the non-tariffs impact South Korea can impose on the beef and automobile industry. Recommendations: In order for the KORUS FTA to be eligible for approval and both parties can be benefit from economic growth, an alliance, and stability, some changes need to be done. This review recommends approval to change the following key point of the agreement: • Auto industry: 1. The United States should ensure the complete or mostly elimination of South Korea’s non-tariff barriers that are created without input from foreign automakers and forced without warning. For example, the license plate size, keyless entry systems...
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...Economic Freedom and Living Standards April 24, 2008 Research Paper Sweden, Ivory Coast, India, North Korea, Singapore, and Brazil April 24, 2008 Research Paper: Sweden, Ivory Coast, India, North Korea, Singapore, and Brazil A country with a free economy have a higher standard of living than countries with poor economies. The standard of living can be determined by the overall economic standing, policy or reforms, political, social, and cultural conditions that a country displays. These factors can be measured in different ways such as the GDP, population, history, and various sources. In this paper, I will examine the economic structure of six countries and emphasize factors that contribute to the standard of living. Sweden Sweden is the world's 27th freest economy. According to the 2008 Index of Economic Freedom (IEF), it has an economy that is 70.4% free. Services, industry, and agriculture account for 59.8%, 38%, and 2.8% of GDP (World Factbook). It relies heavily on international trade, accounting for more than 50% of GDP. Main exports include paper products, machinery and transport equipment, and chemicals. The population is 9 million with a GDP of about $308.9 billion. Citizens are provided with a broad spectrum of public services and social welfare benefits that guarantee a minimum living standard and all residents are covered by national health insurance (Soldenberg). It is known to have one of the highest living standards in the world. Factors...
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...PESTEE Analysis Korea Political Analysis Political factors refer to political situation of the country and the extent to which it may affect and interfere with the project. Political system of South Korea has undergone a huge transformation to become a democratic country in 1987. South Korea became a stable democracy with strong political and economic support from the US The political landscape of the country include centralization of power which the implementation of economic reforms became faster and effective so that the country was fully focused on economic development and friendly to foreign investments, especially strengthening foreign relationships with emphasis on EU. According to economic forecast, South Korea is to become the seventh largest economy in the world within next ten years. Though the fact the relationship with North Korea remain tense and uneasy, the government aims to solve this situation in better way. Since crisis in 1997, the government opened the South Korean market to foreign investors by identifying Foreign direct investment (FDI) and abolished the harmful regulations on foreigner shareholdings in domestic companies. The taxation system and particularly corporate tax in South Korea was simplified encouraged foreign investments. |Current strengths: |Current challenge |Future prospects | |Centralized power of attorney |Military violence still...
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...U.S. Pharmaceutical of Korea* U.S. Pharmaceutical of Korea (USPK) was formed in 1969. Its one manufacturing plant is located just outside Seoul, the capital. Although the company distributes its products throughout South Korea, 40 percent of its total sales of $5 million were made in the capital last year. There are no governmental restrictions on whom the company can sell to. The only requirement is that the wholesaler, retailer, or end user have a business license and a taxation number. Of the 400 wholesalers in the country, 130 are customers of Ball-McCulloch-Frantz- Geringer-Minor: The Swiss pharmaceutical global corporation Hoffman-La Roche has made a major breakthrough in the relief of a serious disabling disease that affects 3 percent of the world’s population. Its new product Tigason is the first product that effectively controls severe cases of psoriasis and dyskeratoses, skin disorders that cause severe flaking of the skin. Sufferers from this disease frequently retreat from society because of fear of rejection, thus losing their families and jobs. Tigason does not cure the disease, but it causes the symptoms to disappear. There is one potential problem. Because of the risk of damage to unborn babies, women should not take the drug for one year before conception or during pregnancy. Hoffman-La Roche is well aware of the potential for harm to the company if the product is misused. It has seen the problems of another Swiss firm, Nestlé. After much discussion, the...
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...To demonstrate their rejection of the Mongols, the Ming emperors a. severed relations with the Middle East and Central Asia and closed the borders to foreigners. b. built the Great Wall of China and deported all Mongols. c. changed the official language from Mongolian to Chinese. d. marched all the Mongols to the Korean border. e. formed close ties with the Manchu instead. a The emperor Yongle improved the imperial complex built by the Mongols called the a. Imperial House. b. Forbidden City. c. Heavenly Gates. d. Dragon's Court. e. Red Square. b Because Mongols controlled access to the Silk Road after the overthrow of the Yuan, the emperor Yongle put an emphasis on a. trade by ships. b. overland trade through India and Arabia. c. trade through Buddhist monasteries. d. trans-Pacific exploration. e. none of these; trade decreased because people could not afford to travel by Silk Road and pay Mongol tariffs. a Zheng He's primary accomplishment was a. converting barbarians to Islam. b. discovering new lands in the East. c. bringing wealth to China. d. acquiring Ming tributary states. e. discovering the Philippines. d Why didn't Ming China develop seafaring for commercial and military gain? a. The emperor feared outside contacts and influence. b. The peasantry were a strong voting lobby and refused to support it. c. The merchants were opposed to losing their domestic markets. d. The Mongol threat from the north took priority over...
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...Economy of South Korea By Henry Graves Dr. Davis September 27, 2014 South Korea is known as one of the emerging economies of the entire world. The South Korean economy has been growing at a steady pace for the past 15 years; this is being accomplished with a dangerous situation with their northern neighbor. When the Korean War ended in 1953 by an armistice that defined the international boundaries between North and South Korea. However, these boundaries are merely a line of truce and hostilities continue between both sides as a search of a just reunification is sought by both countries, but by differing visions on the political future of the Korean peninsula. The question that must be addressed is how does South Korea continue to maintain their dominance in the economy of East Asian nations. The answer can be found by looking into the past history of Korea starting after the end of the Korean War, the present economic policies of the current government of South Korea, and what might the nation need to address in order to maintain their competitive advantage in the region. However, before I begin to look at the past history of South Korea's economy, I must state the present statistics of what has been accomplished in the country. Currently, South Korea is the fifteenth largest economy when measured by GDP and is twelfth in the purchasing power parity. The country has been experiencing economic growth starting from the 1960s until the late...
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...income is taxed by withholding, at 14% • Dividend Tax Credits ∑( Dividend + Interest Income) > KRW 40 Mil. • Included in global income • Subject to ordinary income tax rate Corporate Shareholders • Double taxation can be partially eliminated by DRD (Dividend Received Deduction) for corporate shareholders. DRD • Allowable DRD range: 30% to 100% (100% DRD for 100% ownership applied) Foreign Corporation Recipient • Subject to withholding tax at 22% ( included 2% Local income tax) VAT Revenues as a percentage of GDP 2010 VAT = 46,949 (KRW Billion) 2010 GDP = 1,172,803 (KRW Billion) = 4.0 % Data source: Bank of Korea (http://ecos.bok.or.kr) 30 25 20 15 10 5 0 1995 2000 2005 2008 2009 2010 Data Source:OECD Revenue Statistics. 1965-2010 Data Source : OECD Revenue Statistics. 1965-2010 Data Source: Korean Tax Service : access: http://www.nts.go.kr Tax System: Classical √ vs. Imputed No Progressivity: Yes √ Treatment of Dividends ◦ Dividend Received Deduction (DRD) ◦ Dividend Paid Deduction (DPD) : allowed for special purpose companies (investment companies, under the special financial laws) ◦ Dividend tax credits (withholding tax) for individual shareholders Group Taxation ◦ Limited to Parent – Subsidiary companies with 100% ownership. ◦ Intergroup dividends are taxable but relieved mostly through DRD ◦ Corporate income tax paid by...
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...cost minimizing/profit maximizing d. There exists involuntary employment in china and North Korea as the workers are forced to work for long hours and are not paid the wages they are required to be paid. On the other hand if some fails to follow orders they are detained and overworked. Assignment 4 Exercise 1: Price Elasticity of Demand for Tobacco & Taxation a. Government revenue will go up as the tax is per cigarette and as we know tobacco smoking is addictive therefore translating to higher revenue for the government. This revenue can be used to take care of the welfare of the populations. b. The difference in price elasticity can be attributed to the income of the different age group and the level of addiction in the two different groups. c. Due to their low income increase in prices due to taxation will hinder them from accessing tobacco at the higher price. d. The budge of the low income people will have to change as they will have to forego some items to be able to buy the cigarettes at the high price that has been set. e. Demand curve after tax assuming before tax the cost of a cigarette was $10 Supply curve f. The levy will lead to high supply as the prices of the products will increase on the other hand, the demand of the goods will go down as the price will reduce consumption of the product. g. The welfare of the tobacco use will be impacted positively by the taxation as the number of cigarettes smoked in a day will reduce therefore reducing the health effects...
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...Case Analysis for Corona Beer (Modelo) BUS599 Identify and discuss the trends in the global beer markets There is a common item found at sporting events, entertainment venues, restaurants, bars, and mainly in the refrigerators of Americans. This item is beer. Of the 67% of Americans who consume alcohol 42% prefer beer (Frank Newport, 2010). Beer consumption is continuously increasing not only in the United States but also globally. There are several trends within the global beer market which accounts for the potentials seen throughout the industry. One of the main trends of the global beer industry is the growth rate. The growth rate globally over the past five years is reported at 3.5%. “The largest contributors to this growth have been China (now the world's largest beer market), Africa and Eastern Europe” (SABMiller Investors, 2011). Another trend seen in the industry is consolidation. At the beginning of the twenty first century there were ten major brewers accounting for one third of the beer sales. Today there are four top brewers which include “Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg – accounting for almost 50% of beer sales volumes and up to 75% of the global profit pool” (SABMiller Investors, 2011). This is due to the increase in consolidation. Another trend in the beer industry is premiumisation. This term refers to the sales of premium beer brands. “As economies improve, the trend towards premium will resume as consumers become...
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...Facing Poverty with a Rich Girl’s Habits Patria J Holloway Dr. Gordon Theisen Eng. 115 October 20, 2013 I feel that Suki Kim was a spoiled child. She had a governess, maid, and a chauffeur when she lived in Korea. She didn’t need anything as she was growing up there. Her father was a millionaire from having a shipping company, a mining business and hotels. Then one day they lost all of their money and had to flee to America. Bankruptcy in Korea had jail time behind it, something that her father didn’t want to go through or put his family through. So they left Korea in the ‘80’s and moved to Woodside, Queens in New York. To what Suki says was an “ugly house” that a Korean family owned that ran a dry cleaners. Their sons, Billy and Andy became her playmates. Suki was picked on from the other Korean children both at home and in school. She felt out of place. Therefore the other students didn’t want anything to do with her kind. They were Koreans, but not Korean American. They would call her FOB, “fresh out the boat,” or “yellow.” Funny because they didn’t arrive in a boat, they flew here in an airplane. Even the rich Koreans that left there and came here moved to Manhattan or Westchester. The children were ashamed of her and her kind. In order for her to learn English, she would watch reruns of “Three’s Company.” “Immigration is meant to be the great equalizer, yet it is not easy to eradicate the class divisions of the old country.” (para. 7 pg...
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