If you want to open a crypto company in Korea, you need to comply with specific regulations, among which the ones governing anti-money laundering. They are important as they also apply retroactively to existing Virtual Asset Service Providers (VASP) in Korea that did not require registration with the Financial Services Commission before the enforcement of the new rules.
Below, our company formation agents in Korea explain what these rules are. This way, you can abide by them no matter if you want to apply for a new crypto license in Korea or if you have one and need to complete several steps to be up to date.
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Requirements to open a crypto company in South Korea
The first step towards obtaining a VASP license in Korea is to register a business. From this point of view, here are the main options:
- setting up a private limited liability company that is entirely owned by Korean nationals;
- setting up a foreign-owned limited liability in case of foreign investors (please note that you will need a Korean residence permit in this case).
Our local specialists can explain the requirements associated with registering a foreign-owned enterprise in this country and can help you with its incorporation. Furthermore, you can rely on our lawyers if you want to immigrate to Korea and need support.
Activities for which a crypto license in Korea is required
Compared to a few years ago, when no additional authorization was needed, opening a crypto company in Korea requires registration with the Financial Services Commission, the authority in charge of issuing the Virtual Asset Service Provider license. This requirement has been extended to existing companies dealing with certain crypto activities too.
Specifically, here are the activities that require a crypto license in Korea:
- sale or purchase of cryptocurrencies;
- crypto-to-crypto exchanges;
- Crypto transfers;
- storage or management of digital assets.
So, if you intend to create a cryptocurrency exchange, become a custodian wallet provider, or set up an Initial Coin Offering (ICO), you will need to apply for a VASP license.
Licensing requirements for crypto companies in South Korea
Here are the steps to apply for a Korean cryptocurrency license:
- submit the company’s details with the FSC;
- set up a corporate bank account and its details must also be provided to the same FSC;
- create extensive anti-money laundering (AML) and know-your-client (KYC) regulations, that provide for client due diligence and in-depth transaction verification for reporting purposes;
- purchase an Information Security Management System (ISMS) certificate from the Internet and Security Agency.
In respect to the company information to be filed with the FSC, we remind you that the following details must be provided:
- the company’s name;
- its Korean address;
- the name of a local representative.
If you need assistance in filing for a new crypto license in Korea or complying with this requirement as an existing company, you can rely on our company formation agents.
Taxation of crypto companies in Korea
Crypto exchanges are subject to specific financial requirements, including paying certain taxes. Among these, we mention the following:
- the income tax which is imposed on the activities of the cryptocurrency business, and its rates range from 9% to 24%;
- the standard VAT rate of 10%, which is imposed for the provision of crypto-related services;
- the investment tax which covers crypto asset sales only, and which is levied at an average rate of 20%, as it depends on the duration of ownership and type of asset.
There are also cases in which the dividend tax applies at variable rates and based on the fiscal residence of the taxpayer. Our accountants in Vietnam can offer more information on this levy.
If you want to open a crypto company in Korea and need assistance, please contact us.