November 27, 2024

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A currency exchange display board in Myeong-dong, central Seoul shows various exchange rates on June 19. (Yonhap)

The annual limit for overseas remittances without the need for additional documentation will be raised from $50,000 to $100,000 from July 4, following the passage of an amendment to the current limit on Tuesday.

The current limit was created back in 1999 when the foreign exchange transaction-related law was first established. The changes are intended to reflect economic growth, according to the government.

An amendment to the current law, which includes among other measures the increased limit for overseas remittances, was reviewed and approved during a Cabinet meeting held on Tuesday.

Other measures in the amendment include reducing fines applied for violating post-transaction reporting obligations from the existing 7 million won to 2 million won.

The threshold for fines that can be replaced with a warning for violating capital transaction reporting obligations will be raised as well. Currently, this provision applies to transactions of up to $20,000 per case, but it will be increased to up to $50,000 per case.

The threshold amount for violations of capital transaction reporting obligations that can result in punishment will also be adjusted, increasing from 1 billion won to 2 billion won.

With the change, large securities firms will also be allowed to offer currency exchange services to their clients -- both individuals and firms.

Currently, only four securities firms with a minimum capital of 4 trillion won and a short-term financial business license in Korea were permitted to provide currency exchange services.

Convenience for companies to secure foreign investments will also be enhanced with the latest amendment.

The reporting threshold for large-scale foreign currency borrowing will be raised from $30 million annually to $50 million.

The requirement for ad hoc reporting on receiving overseas direct investment will be eliminated.

By Song Seung-hyun (ssh@heraldcorp.com)