Registration of Business Bank Account 

1.     What's the Business Bank Account in Korea

Company, Individual business and Foreign Investment Company operated in Korean Territory have to open and use the bank account of entity's name for their business purpose transactions and it's must be separated from their personal purpose transactions

2.     Who have to open and use the Business Bank Account

-       The entity which must be kept the obligor under double entry system (the turnover are based on the previous amount).

-       All of the professional service business (I.e. lawyer, CPA, CTA and etc.) have to use it when they receive their service fees.

-       Turnover basis : Wholesale and Retail sale business – over KRW 300 million

               Manufacturing, food and lodging business – over KRW 150 Million

               Real estate rental business – over KRW 75 Million.

3.     How to get and recognize it.

-       When company open the account in Bank, it must be added the company name and described the word “Business Bank Account”.

-       At present if you opened and used your personal bank account, you can simply change it for the Business Bank Account. Using the same account, only add the company name and described the word “Business Bank Account” in the new bank book.

4.     Legal reporting deadline

-       On-going business entity: within 3(three) month from new Fiscal year started.

-       New business entity: within 3(three) month from new business code issued

-       If company want to change the account, company have to report it within 3(three) month.

5.     How to report it to National Tax Service(“NTS”)

-       If it is opened within legal reporting deadline, NTS is requested to submit from all of the financial institute on behalf of company. However the account is opened after legal reporting deadline, company have to visit NTS for reporting it.

6.     Number of business bank account

-       Basically each business entity have to open their own account but one entity can be opened multi-account and one account can be opened multi-entities.

7.     Scope of Transaction in business

-       The obligor under double entry system must be used their business bank account when they trade their sales and purchase transaction and pay or receive the salary, rental and etc.

-       If you can't use it unavoidably, company have to prepare the details of transaction for exceptional trade of business bank account for tax reconciliation purpose (Date of trade, name of trader, amount and etc.).

8.     Surtax which do not open and no use the account.

-       Surtax which do not open the account : Total revenue each FY * 5/1000

-       Surtax which do not use the account : Total amount which do not use the account * 5/1000

-       Any kind of the tax benefits and exemption are excluded.