Probe into tax evasion bids by setting up fake offshore firms

Home > Business > Finance

print dictionary print

Probe into tax evasion bids by setting up fake offshore firms

Financial regulators are investigating Koreans suspected of setting up a paper company abroad to pretend to be foreign investors on the Korean equity market in a bid to evade taxes, a report from Rep. Chung Woo-taik, a lawmaker from ruling Saenuri Party, showed Monday.

Based on data he obtained from Financial Supervisory Service, the regulators detected 27 individuals running 45 paper companies based abroad on suspicion of violating the Foreign Exchange Transactions Act, a law that requires a citizen to report acquisition of a share in Korean company from abroad.

Statistically, a total of 40,788 foreign investors are registered with the FSS on Korea’s equity market, and they are holding about 150 trillion won ($127 billion) of value of Korean shares in total. They are based in many developed countries, such as U.K., Luxemburg, Singapore and Ireland, and so-called “tax haven” countries, like Cayman Island or Bermuda or Virgin Island.

But Chung said it is hard to tell if they are all fake foreign investors, as there are many global companies that launched branches abroad for equity investment in Korea to save taxes.
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)