Table of Contents
- Why KRW 300M?
- What Counts as Capital?
- Proving Capital: The Bank Balance Certificate
- Surety Bond Requirements
- Common Mistakes
- Strategies for Capital Preparation
- FAQ
1. Why KRW 300M?
The Framework Act on Logistics Policy requires international freight forwarders to have paid-in capital of at least KRW 300 million to ensure financial soundness and customer protection. This threshold applies to both domestic and foreign-invested companies.
2. What Counts as Capital?
- Paid-in capital on the corporate register
- Foreign capital remitted and recorded as paid-in capital (for FICs)
- Does NOT include borrowed funds or short-term deposits in the company's name
3. Proving Capital: The Bank Balance Certificate
At the time of application, you must submit a bank balance certificate (잔고증명서) showing the company account has KRW 300M+. The certificate must be issued by a Korean bank and dated within 3 months of the application.
4. Surety Bond Requirements
- A surety bond (보증보험) of KRW 100M or more is also required
- Issued by recognized insurance companies (Seoul Guarantee Insurance, etc.)
- Annual premium: approximately KRW 300,000–500,000
- Can be replaced by a qualifying mutual aid association membership
5. Common Mistakes
- Moving funds in just before the certificate date and out immediately after (regulators may flag this)
- Using a personal account instead of the corporate account
- Surety bond period less than 1 year
- Mismatch between certificate date and application date
6. Strategies for Capital Preparation
- Plan capital injection at least 1–2 months before application
- Use a shareholder loan converted to paid-in capital via a formal capital increase
- Foreign capital: ensure FIPA reporting is completed before the balance certificate date
FAQ
Q. Can I use a loan to meet the KRW 300M requirement?
A. No. The requirement is for paid-in capital, not total assets or cash balance from a loan. Bank balance from a loan will be scrutinized.
Q. Must the KRW 300M remain in the account after registration?
A. No. It only needs to be demonstrated at the time of application. Post-registration, it can be used as operating capital.
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