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| Finance Minister Choo Kyung-ho speaks during a deregulation and innovation taskforce meeting at Government Complex Seoul, Friday. Yonhap |
By Lee Min-hyung
Korea's financial authorities decided Friday to deregulate a package of foreign exchange rules set up shortly after the 1997 Asian financial crisis, with a focus on easing transaction inconveniences that members of the public and companies have been complaining about, the Ministry of Economy and Finance said.
Under the decision, a Korean citizen can remit up to $100,000 a year without submitting any documentary evidence starting in June. Currently, any individual residing here has not been able to do so if the amount is above $50,000.
The standard was introduced back in 1999 when the Foreign Exchange Transactions Act was enacted, but there have been growing calls for a revision as the economy has since achieved outstanding growth.
Companies can also borrow up to $50 million in foreign currency a year without reporting it to the finance ministry. This is an increase from an earlier restriction of $30 million. The deregulation came in response to growing complaints from businesses, as more companies look to expand their footing abroad.
Korean companies ― which establish overseas branches or obtain a more than a 10-percent stake in foreign firms ― have been obliged to report their detailed business decisions occasionally to the relevant authorities, but they no longer have to do so and can report them just once a year.
The government also granted approvals for nine securities firms to engage in the currency exchange business. So far, only four brokerage houses have been allowed to offer the service for corporate clients, but nine securities firms will be allowed to do so for both corporate and individual clients. As competition is expected to heat up between banks and more securities firms, the ministry expects the measure to help cut the overall commission for exchanging money.
"We will actively support local financial institutions so they can continue taking the initiative in the financial market here and enhance their global competitiveness," Finance Minister Choo Kyung-ho said. "The authority will also keep improving regulations to meet global standards, while at the same time paying more attention to voices from companies (regarding their difficulties due to regulatory hurdles)."
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