US Company from South Korea: Tell Your Bank Before You Invest

0:00Can a Korean resident own a US LLC?

It's past midnight in Busan, and Jiwoo's game is nearly ready for players abroad. In one tab, a US company is half ordered. In the other, she's typed a question: do I have to tell my bank? In Korea, yes, and before the money moves. It's the part most guides leave out. As for America, she doesn't need a social security number, and she doesn't need to fly there. Cheyenne, in Wyoming, is fifteen hours behind Korea in July, and sixteen in January.

We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you. Here's her episode, panel by panel.

0:42Do I need a US company for Stripe in South Korea?

Why a US company at all? The big card processor doesn't serve Korea, so for many founders here, a US company is the usual way in. App stores and US buyers often want one too. For a business Jiwoo runs herself, a Wyoming LLC may fit. If US investors come later, they usually want a Delaware C-Corp. Either way, Korea sees it as investing abroad. And that changes the order of everything.

1:12Do I have to report the US company to my bank?

This rule comes before anything else. Under Korea's foreign exchange law, holding a set share of a foreign company is an overseas direct investment. Owning your own LLC outright is well over that line. You report it to your designated foreign exchange bank before you invest. That holds even for the smallest amount. For a smaller investment, under a set limit, the guide says the report can follow within a year of the contract.

Your bank confirms which applies to you. And the financial supervisor warns against one shortcut. Don't split the money across staff names.

1:51Wyoming LLC or Delaware C-Corp, and an EIN without an SSN

With the bank in the loop, the company itself is quick. It needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN, the company's US tax ID. Without a social security number, it's a paper form to the IRS. We'll ask where the company will be managed, because your bank and Korea's tax office ask too. You'll pay in US dollars, so check your card's exchange rate and fees.

2:21Can I bank in the US from South Korea?

Opening accounts is the easy part here. One of the US fintech banks takes applications from founders in Korea, and a multi-currency account can give the company US account details. With those, the company can apply to the card processor. It reviews the business and the person behind it, and it can decline. Each provider decides for itself. Send the company's capital only through your designated bank.

And use the same name, address and description everywhere.

2:53What do I file after investing?

Now the guide's own illustration. Say Jiwoo puts five thousand dollars into a new Wyoming LLC she owns outright. That's an overseas direct investment, so she reports it to her designated bank. When she sends the money, she files a remittance report. Within a set time after, a report that she's acquired foreign securities. A yearly business report only starts once her total investment passes a much larger amount.

That's an illustration, not a quote. It follows the regulator's guide, and her bank confirms which reports it needs, and when.

3:31Can Korea tax the company? The treaty and the IRS

Then there's tax at home. Korea taxes its residents on their worldwide income. It also has a rule for low-taxed companies. Hold a set share of a foreign company whose average tax rate sits at or below a set line, and Korea can treat its undistributed profit as your dividend. A single-owner LLC that pays no US tax is below that line. And a company effectively managed from Korea can be a Korean corporation.

How yours is treated is for your tax adviser. The US–Korea tax treaty is in force, but for a services business it matters less. The company still files a report with the IRS every year, even without sales, and missing it is expensive. It's usually due in the spring, and there's a form to ask for more time, filed before the deadline.

4:25What order should I do it in?

Here's how Jiwoo lines it up. Her questions to an adviser, and the report to her bank, before any money goes. Then the company, the EIN and the accounts. The IRS report, the securities report and her Korean return go on one calendar. The full guide, with every source and a checklist for your adviser in English and Korean, is linked below. And that question in her second tab? She asked her bank first.

The company came after.