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General private equity fund business

Foreign banks looking to open a branch in Korea need to follow different procedures according to the two types of branches they want to open. You should go through different preliminary authorization and authorization procedures depending on whether you’re opening your first branch in the country or additional branches.
Foreign banks applying for establishing their first branch in Korea should obtain preliminary authorization and authorization.

The documents required for obtaining preliminary authorization are as follows.

Documents to be submitted for receiving preliminary autghorization for opening of a first branch / Application form for preliminary authorization / Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization / Documents that can prove that the institution was authorized to run a banking business in its home country / List of executives and key profile / Documents proving that the installation of a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant’s home country, approval from the home country’s supervisory authority / Sales status and annual report for the past 3 years / As credit financial institutions,

  • ‧ Application form for preliminary authorization
  • ‧ Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization
  • ‧ Documents that can prove that the institution was authorized to run a banking business in its home country
  • ‧ List of executives and key profile
  • ‧ Documents proving that the installation of a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant’s home country, approval from the home country’s supervisory authority
  • ‧ Sales status and annual report for the past 3 years
  • ‧ BIS capital adequacy ratio and details for the past 3 years
  • ‧ Branch operation plan and sales plan
  • ‧ Status of the applicant’s handling of international affairs and status or plan for management of overseas branches already set up
  • ‧ Business relations between the financial institution and the Republic of Korea
  • ‧ Timeline

Here are some requirements that the headquarters of a foreign bank must meet.

Requirements that the headquarters of a foreign bank must meet / Legitimate consent for establishment from the home country's supervisory authority is required / The applicant shall have authorization to operate a banking business from the home country and be systematically supervised by the supervisory authority / The applicant shall have sound financial status and business conditions to ensure protection of bank users / The foreign bank shall have the capabilities required for operation of a domestic branch, and be managing all branches located home and abroad systematically / The FSS also examines whether the foreign bank has systematically managed the operation

  • ‧ Legitimate consent for establishment from the home country’s supervisory authority
  • ‧ Authorization to operate a banking business from the home country and be systematically supervised by the supervisory authority
  • ‧ Sound financial status and business conditions to ensure the protection of bank users
  • ‧ Capabilities for operating a domestic branch, and managing all branches located home and abroad systematically

The documents required for obtaining authorization for opening the first bank branch are as follows.

Documents required for obtaining authorization for opening of the first bank branch / Application form for preliminary authorization / Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization / Memorandum signed by the applicant pledging to be compliant with the laws and regulations of the Republic of Korea, the orders and instructions of government authorities, the Financial Services Commission, and the Financial Supervisory Service, as well as provisions of agreements between financial institutions in conducting business activities within the Republic of Korea / Articles of Incorporation of the applicant / The second document is document proving the legitimacy of the representative of the financial institution Documents required for obtaining authorization for opening of the first bank branch / Name of the manager of the branch to be opened, authority, resume, and legitimate Power of Attorney that indicates the person’s authority / Documents that can prove that the institution was authorized to run a banking business in its home country / List of executives and key profile / Documents proving that the installation of a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant’s home country, approval from the home country’s supervisory authority / Other documents proving the fulfillment of preliminary authorization requirements / and that financial institutions will observe agreements between each other in conducting business activities in the country

  • ‧ Application form for preliminary authorization
  • ‧ Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization
  • ‧ Memorandum signed by the applicant pledging to be compliant with the laws and regulations of the Republic of Korea, the orders and instructions of government authorities, the Financial Services Commission, and the Financial Supervisory Service, as well as provisions of agreements between financial institutions in conducting business activities within the Republic of Korea
  • ‧ Articles of incorporation of the applicant name
  • ‧ Name of the manager of the branch to be opened, authority, resume, and legitimate Power of Attorney that indicates the person’s authority
  • ‧ Documents that can prove that the institution was authorized to run a banking business in its home country
  • ‧ List of executives and key profile
  • ‧ Documents proving that the installation of a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant’s home country, approval from the home country’s supervisory authority
  • ‧ Other documents proving the fulfillment of preliminary authorization requirements

The documents required for preliminary authorization for the establishment of additional bank branches are as follows.

Documents required for preliminary authorization for establishment of additional bank branches / Application form for preliminary authorization / Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization / Documents proving that installing a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant's home country, approval from the home country's supervisory authority / Sales status and annual report for the past 3 years / BIS capital adequacy ratio and details for the past 3 years / Branch operation plan and sales plan / Timeline / annual report for the past three years, BIS capital adequacy ratio and details for the past three years,

  • ‧ Application form for preliminary authorization
  • ‧ Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization
  • ‧ Documents proving that the installation of a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant’s home country, approval from the home country’s supervisory authority
  • ‧ Sales status and annual report for the past 3 years
  • ‧ BIS capital adequacy ratio and details for the past 3 years
  • ‧ Branch operation plan and sales plan
  • ‧ Timeline

The documents required for preliminary authorization for the establishment of additional bank branches are as follows.

Documents required for obtaining authorization for establishment of additional bank branches / Application form for authorization / Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization / Name of the manager of the branch to be opened, authority, resume, and legitimate Power of Attorney that indicates the person's authority / Documents proving that installing a branch in the Republic of Korea does not violate any relevant laws and regulations within the applicant's home country, approval from the home country's supervisory authority / Sales status and annual report for the past 3 years / BIS capital adequacy ratio and details for the past 3 years / Branch operation plan and sales plan / are the same as adding additional branches

  • ‧ Application form for authorization
  • ‧ Documents proving that the representative who signed the application form is the legitimate representative of the financial institution applying for authorization
  • ‧ Name of the manager of the branch to be opened, authority, resume, and legitimate Power of Attorney that indicates the person's authority
  • ‧ Documents proving that installing a branch in the Republlic of Korea does not violate any relevant laws and regulations within the applicant's home country, approval from the home country's supervisory authority
  • ‧ Sales status and annual report for the past 3 years
  • ‧ BIS capital adequacy ratio and details for the past 3 years
  • ‧ Branch operation plan and sales plan

For more information, please check the video below

General private equity fund business youtube

Investment Advisory Business Entities

What are some of the things that companies managing an investment advisory business overseas should consider when entering Korea?
Just like other overseas asset management companies, they should first register with the financial authority of Korea to establish an investment advisory business in the country.
Investment advisory companies are categorized into investment advisory business entities and discretionary investment business entities according to the Financial Investment Services and Capital Markets Act.
Special caution is required because the requirements applicants vary according to the type of business and work performed.
Applicants should have an understanding of what investment advisory business and discretionary investment business are.

Advisory business refers to the business of providing advice on investment decisions in financial investment instruments.

Investment advisory business / The activity of providing advice on the values of financial investment instruments and other investable assets or the investment decisions in financial investment instruments (Type, item, acquisition, disposition, methods of acquisition or disposition, quantity, price, timing, etc.) / Advisory business means the business of providing advice on investment decisions

Discretionary investment business refers to the business of acquiring and disposing of financial investment instruments with authorization from investors for discretionary judgment over the financial investment instruments.

Discretionary investment business / The activity of acquiring, disposing of, and managing financial investment instruments and classifying them for investors with authorization from such investors for discretionary judgment, entirely or partially, over the investment instruments, etc. / of financial investment instruments with authorization from investors

The registration procedures are the same as overseas asset management companies.
There are a total of 5 registration steps.

Financial Supervisory Service (Asset Management Supervision Department) Evaluation of requirements / Financial Services Commission (Asset Management Division) / Applicants / 1 Establishment of a corporation and preparation for registration / 2 Application for registration / 3 Request for evaluation / 4 Sending of review opinion and comment / 5 Notice of registration approval or notification of rejection

  • ① Establishment of a corporation and preparation for registration Establish and register a corporation with the Financial Services Commission and confirm if it meets all legal requirements for registration.
  • ② Application for registration [Company → FSC] Submit an original copy to the Asset Management Division of the FSC, and a copy to the team in charge of authorization/approval of asset management under the Asset Management Supervision Department of the FSS.
  • ③ Request for evaluation [FSC → FSS] The FSC would request the Financial Supervisory Service to conduct examination on whether the applicant meets relevant requirements for registration.
  • ④ Sending of review opinion and comment [FSS → FSC] Upon completing the examination, the FSS sends their comment and review opinion to the FSC, sometimes asking for the application to be updated or supplemented.
  • ⑤ Notice of registration approval or notification of rejection [FSC → Company] The inspection is closed when there are no other comments from the Financial Supervisory Service.

There are a total of 6 requirements reviewed by the FSS

01 Company Type / 02 Equity capital / 03 Major shareholder / 04 Executive officers / 05 Professionals / 06 System for prevention of conflicts of interest

  • ① Company Type
  • ② Equity capital
  • ③ Major Shareholder
  • ④ Executive officers
  • ⑤ Professionals
  • ⑥ System for prevention of conflicts of interest

Company Type : A stock company incorporated under the Commercial Act, etc. / Equity capital : Statutory requirements for the minimum equity capital should be met -Investment advisory business: KRW 100 million, KRW 250 million -Discretionary investment business: KRW 500 million, KRW 1.5 billion / Major shareholder : Applicants should meet the major shareholder requirements prescribed in Article 18 of the Act / Professionals : Executive officer requirements stipulated in each paragraph of Article 5 (1) of the Act on Corporate Governance of Financial Companies shall be met / Executive officer : Investment advisory business: At least 1 professional advisor for investment recommendation who is a full-time officer, Discretionary investment business: At least 2 fund managers who are full-time officers Investment advisory business Discretionary investment, business: Shall have all of the professional resources described above (3 persons) / System for preventing conflicts of interest : Applicants shall have the following system for preventing conflicts of interest between financial investment business entities and investors and also between certain investors and other investors -Internal controls for managing conflicts of interest -Appropriate system for suspending exchanges of information / Matters concerning the qualifications and requirements of professional manpower, which are major registration requirements; Financial investment professional manpower and / Prior confirmation by the Financial Investment Association is required by referring to the regulations on qualification tests / The Regulations on Investment Professionals and Qualifying Examination / Financial investment Investment / instrument recommendation / Fund management / At least 1 year of experience / applicants should have at least 1 year of experience in the fields of financial investment instrument management,

For more information, please check the video below

Investment Advisory Business Entities youtube

Electronic Financial Business

For a financial institution or a company to operate an electronic financial business in Korea, you should first apply for registration with the Financial Supervisory Service. After registration, applicants must go through an inspection on qualifications including capital and financial soundness.

Receipt of applications (Financial Supervisory Service) / Examination of requirements for registration (Financial Supervisory Service) - 1. Review of application documents 2. Examination of eligibility requirements of major shareholders and applicants 3. Other types of examination of other requirements 4. Field audit / Notification of examination results (Financial Supervisory Service - Financial Services Commission) / Notice of registration (Financial Supervisory Service, Financial Services Commission)

Let's take a look at the seven requirements that FSS focuses on when examining the electronic financial industry.

01 Assessment on whether capital requirements are met / 02 Financial soundness / 03 Personnel requirements / 04 Physical requirements / 05 Major shareholder eligibility

First, it’s important for applicants to meet capital requirements. Information on capital can be confirmed through each company's certificate of paid-in capital, and the minimum capital requirement is different for each type of electronic financial transaction company.

01 Assessment on whether capital requirements are met / Capital requirements / Type of electronic financial business / minimum capital / Electronic funds transfer business KRW 3 billion / Issuance and management of electronic debit payment means KRW 2 billion / Issuance and management of electronic prepayment means KRW 2 billion / Payment Gateway KRW 1 billion (KRW 0.3 billion**) / ESCROW KRW 1 billion (KRW 0.3 billion**) / Electronic Bill Payment and Presentment KRW 0.5 billion (KRW 0.3 billion**) / * The minimum equity threshold shall be the aggregate amount for applicants with 1 or more business categories (KRW 5 billion limit) / ** Minimum capital requirements relaxed for small electronic financial businesses from June 30, 2016 (Applicable only when the quarterly electronic financial transactions volume is KRW 3 billion or less) / Information on capital can be confirmed through each company's certificate of paid-in capital,

Next is financial soundness. The supporting documents applicants have to submit include evidence on financial soundness, including financial statements and income statements.
We ask applicants to take their time to read through the requirements thoroughly since the requirements for financial soundness would be different according to whether they're subject to examination or if ｢The Act on the Structural Improvement of the Financial Industry｣ is applicable.

02 Financial soundness / Institutions subject to examination pursuant to the Act on the Establishment of Financial Services Commission O / Financial institutions subject to the Act on the Structural Improvement of the Financial Industry - Applicants shall not fall under financial standards that are the requirements for management immprovement recommendation, request, order, etc. / Financial institutions not subject to the Act on the Structural Improvement of the Financial Industry - The appliant's debt ratio shall be less than 200% / Institutions not subject to examination pursuant to the Act on the Establishment of Financial Services Commission X / When the major shareholder of the applicant is a conglomerate - The debt ratio shall be less than 200% for both the applicant and the major shareholder conglomerate / When the major shareholder of the applicant is not a conglomerate - The debt ratio of the applicant shall be less than 200% / Government-owned or invested companies - The debt ratio of the applicant shall be less than 1,500% / We ask applicants to take their time to read through the requirements thoroughly

The FSS would also examine whether the applicant has professional manpower.
The applicant should have 5 or more professional resources with 2 or more years of experience at the time of application.
This is because professionals are capable of and responsible for the protection of users. The FSS examines the adequacy of competencies of professionals based on the supporting documents submitted.

03 Personnel requirements / 5 or more professional resources with more than 2 years of experience / Employment contract / Certificate of Employment / Certificate of Career / List of workplaces covered by the 4 major social insurance schemes / The FSS examines the adequacy of competencies of professionals

Whether the applicant possesses sufficient physical facilities for user protection and performance of work is also significant.
The Physical facilities include computerized equipment, backup devices, various programs, information protection system and facilities of the computer room.

04 Physical requirement / Computerized equipment / Backup devices / Various programs / Information protection system / and facilities of the computer room / required for user protection and performance of work

For more information, please check the video below

Electronic Financial Business youtube

General private equity fund business

If you're thinking of establishing a private equity investment business in Korea, your company would first have to become a licensed general private equity fund by obtaining approval from the Financial Services Commission and the Financial Supervisory Service in accordance with the Financial Investment Services and Capital Markets Act.

Financial Services Commission / Registration of a General private equity fund Business / Financial Supervisory Service / in accordance with the Financial Investment Services and Capital Markets Act.

There are a total of 5 registration steps.

Financial Supervisory Service (Asset Management Supervision Department) Evaluation of requirements / Financial Services Commission (Asset Management Division) / Applicants / 1 Establishment of a corporation and preparation for registration / 2 Application for registration / 3 Request for evaluation / 4 Sending of review opinion and comment / 5 Notice of registration approval or notification of rejection

  • ① Establishment of a corporation and preparation for registration Establish and register a corporation with the Financial Services Commission and confirm if it meets all legal requirements for registration.
  • ② Application for registration [Company → FSC] Submit an original copy to the Asset Management Division of the FSC, and a copy to the team in charge of authorization/approval of asset management under the Asset Management Supervision Department of the FSS.
  • ③ Request for evaluation [FSC → FSS] The FSC would request the Financial Supervisory Service to conduct examination on whether the applicant meets relevant requirements for registration.
  • ④ Sending of review opinion and comment [FSS → FSC] Upon completing the examination, the FSS sends their comment and review opinion to the FSC, sometimes asking for the application to be updated or supplemented.
  • ⑤ Notice of registration approval or notification of rejection [FSC → Company] The inspection is closed when there are no other comments from the Financial Supervisory Service.

There are a total of 7 requirements reviewed by the FSS

01 Legal personality requirement / 02 Equity requirement / 03 Manpower requirement / 04 Physical requirement / 05 Major shareholder requirement / 06 Sound management and social credit requirement / 07 Requirement for conflict of interest prevention

  • ① Legal personality requirement
  • ② Equity requirement
  • ③ Manpower requirement
  • ④ Physical requirement
  • ⑤ Major shareholder requirement
  • ⑥ Sound management and social credit requirement
  • ⑦ Requirement for conflict of interest prevention

For more information, please check the video below

Part 1

General private equity fund business youtube part1

Part 2

General private equity fund business youtube part2