Leaving South Korea

Prepare final employment and residence records

Document the last working day, departure, new home, final salary and deferred benefits. Confirm final payroll settlement, return requirements and the treatment of later payments with the appropriate Korean adviser. Nonresidence and a cancelled immigration permission are related facts, not identical legal conclusions.

Check shareholdings before departure

Income Tax Act article 118-9 applies to specified departing shareholders who have had a Korean domicile or residence for at least five of the preceding ten years and meet the major-shareholder test at the end of the preceding year. It deems the relevant shares disposed of on departure. The decree determines the detailed shareholding and value tests, so the asset class and ownership history must be reviewed.

Update continuing arrangements

Tell banks about the new tax residence and confirm the future operation of local accounts and transfer permissions. Retained property, business interests and employment-linked income can require continuing compliance. If an overseas company had decisions made from Korea, review the effect of moving management again and preserve the supporting governance record.

Use the statutory shareholder test before assuming no exit charge

Article 118-9 requires both the relevant residence history and major-shareholder condition. Review domicile or residence during the ten years before departure and the shareholding position at the end of the preceding year. A last-minute change should not be assumed to remove a test measured at an earlier date.

Identify the precise shares covered by the cross-referenced capital-gains provisions and apply the decree’s ownership and market-value criteria. Obtain a defensible departure-date value and records of acquisition cost. Review filing, payment and any available relief with the local specialist before leaving. This guide establishes that the statutory charge exists and its principal gateway conditions; it does not substitute an unverified universal shareholding threshold for the detailed test.

Complete payroll and preserve the foreign-income chronology

NTS guidance describes final employment settlement when the final salary is paid for the departure month. Provide the deduction and supporting records in time for the employer’s calculation. Confirm how bonuses, equity awards or other amounts paid later will be handled and whether separate personal returns remain necessary.

Keep travel history, the end of Korean duties, the overseas home and the date each income item arose. The foreign-national five-of-ten-year rule is not a substitute for determining whether residence ends. Retained Korean-source income can remain relevant after moving, while the destination may begin taxing worldwide income. Arrange access to payroll statements and tax certificates before company or local telephone access is cancelled.

Document continuing companies and accounts

If a foreign company was effectively managed in Korea, record how its actual decision-making changes. An owner’s flight does not prove that the company’s management moved on that day, especially if local staff or directors continue controlling it. Preserve accounts and ownership records needed for any final CFC computation.

Discuss continuing bank access, identity-document expiry, address changes and the documentation for outward transfers. Keep a functioning method of authentication until final payments and refunds are settled. For a Korean company that continues operating, appoint responsible people for filings, licences, payroll and banking. Shareholder departure, corporate closure and investment repatriation are different processes and should each have a clear owner and completion record.

How Offshore Capitalist can help

Share your current residence, nationality, business activities and intended changes through the inquiry form or WhatsApp. We can assess the cross-border issues, explain the work required and coordinate the agreed implementation. For this jurisdiction, local regulated work and government decisions remain with the relevant qualified providers and authorities. We confirm scope and fees before starting.