A query came from the owner of a foreign restaurant
A young man from Pakistan wanted to take over the restaurant, and eventually, it was decided to transfer the restaurant.
And he requested me to handle the comprehensive transfer and acquisition procedure for the restaurant and the visa change for the transferee (D10 visa, Pakistani nationality).
The D8 visa process is more about the precedures before applying for the visa than the application itself.
If these preliminary steps are not properly executed or if there are defects, it eventually becomes a problem when applying for the visa.
The basic process for a corporate investment D8 visa (D-8-1) of over 100 million won is as follows
① Foreign investment notification → ② Remittance of investment funds from abroad → ③ Issuance of balance certificate from the notified bank → ④ Notarization and corporate registration → ⑤ Business registration → ⑥ Issuance of foreign investment enterprise registration certificate → ⑦ Transfer of investment funds to a corporate account → ⑧ D8 visa application
For more detailed information on the documents to be submitted and how to proceed with each step, check the link below.
Obtaining a D8 visa for a restaurant as a business purpose is a bit more complicated than the process for a typical D8 visa with business purposes that are possible to report only (such as wholesale, trade, etc.).
The first is that a sales contract must be made when the corporation is not yet established, which can be hesitant from the seller's point of view since they haven't received the full payment yet for the comprehensive transfer and acquisition.
※ This is because corporate registration is possible only if there is a corporate address, and only after that can the purchase price be paid using the corporate capital.
In such cases, a preliminary contract is usually made first, and after the corporate account is issued following the corporate registration, the investment funds are deposited into the corporate account, and the remainder of the purchase price is paid with corporate funds. Also, a separate rental agreement with the restaurant landlord must be conducted. The agreement with the landlord also proceeds with a preliminary agreement first, followed by the payment of the balance with corporate funds.
Depending on the size of the store, if you take over an existing restaurant with a 100 million won corporate investment, including interior expenses and rights money, there might be almost nothing left in the corporate account when applying for a D8 visa.
The second is related to the business license. Even if the business license is inherited through comprehensive transfer and acquisition, the transferee must carry out the procedures required for reporting, such as hygiene-related education.
And a new business license must be issued in the name of the transferee, which sometimes becomes an issue.
In this case, the transferee was a registered foreigner, so there was no problem, but for short-term stayers (C3, etc.) who do not have a foreign registration number, there are often cases where issuing a business license is impossible.
※ Registered Foreigners : Holders of a long-term visa staying legally in the country for more than 90 days
Once a business license is obtained, you can issue a restaurant business registration certificate, and once a business registration certificate is obtained, you can receive a foreign investment enterprise registration certificate and apply for a D8 visa.
In the D8 visa examination process, the important criteria are ① source of investment funds and ② the genuineness of the business (expertise). If you are considering applying for a D8 visa, you must thoroughly review these two aspects before proceeding with the procedures.
Among them, the source of investment funds is really important and is the most critically examined criterion.
The most common reason for disapproval of a 100 million won corporate investment D8 visa is "unclear source of investment funds."
There's no point in thinking about preliminary procedures.
If you're considering applying for a 100 million won corporate investment D8 visa, you must first review how to prove the source of investment funds. After confirming it's possible to prove, then you can proceed with the D8 visa process, and before proceeding, you must review if there are any issues that could arise at each step. This is the order.
Below is the information on the source of investment funds for the 100 million won corporate investment D8 visa I have processed so far.
※ There's no absolute answer or standard in proving the source of investment funds. Below are the documents I typically submit for proving the source of investment funds for each situation when processing a D8 visa.
1.If you've accumulated investment funds through business (as a sole proprietor) or working
- This is the most common case.
① If you've accumulated investment funds through business, you can present your main business bank account in your home country as the source of investment funds.
When presenting your main business bank account as proof, the account should show transactions with clients and how the money was accumulated, and you should also attach related evidence of business (business registration certificate, contracts related to clients, documents related to export/import performance, invoices, etc.).
② If you've accumulated investment funds through employment, you present your salary account as the source of investment funds. You should also attach related evidence from your employment (employment certificate, career certificate, business registration certificate of your employer, etc.).
2.If you've prepared investment funds from the capital of a foreign corporation (not directly investing in a domestic corporation but withdrawing capital from a foreign corporation to invest)
- Many people think this is easy. However, the money belongs to the corporation, not the corporation's representative.
If you withdraw funds from a foreign corporation where you're registered as a director or executive to prepare investment funds, the most important document is the dividend decision document proving that the money was legally withdrawn.
When presenting the dividend decision document as the source of investment funds, you should also attach the corporate account transaction statement, the transaction statement of the account that received the deposit from the corporate account (the investor's personal account transaction statement), the business registration certificate of the corporation, and a job certificate or career certificate related to the corporation.
3.If you've prepared investment funds by selling real estate or land
- There are often cases where the source of investment funds is not proven when an investor sells owned real estate or land.
I believe if you've legally sold your property to a third party and prepared investment funds, there shouldn't be a significant issue.
The problem arises because there are malpractices, such as not actually selling but creating fake sales contracts among family, relatives, or acquaintances to exchange money.
Therefore, in the case of real estate or land sales, the most important document for proving the source of investment funds is not the sales contract but the capital gains tax payment history.
Of course, the sales contract must also be submitted, and the subject of the contract and the seller in the capital gains tax payment history must match.
The payment must have been made from the account of the buyer listed in the sales contract to the account of the seller (the investor).
If A bought it, but the payment was made not from A's account but from A's company or A's family or acquaintance's account, it would obviously be a problem.
4.If you've prepared investment funds by inheriting property from family (parents or siblings)
- When foreign students with D2, D10 visas apply for a change of status to a D8 visa in South Korea, they often receive investment funds from their parents. In such situations, the best document I think of is the court's judgment on inheritance, but some countries do not have such a system. In those cases, the content about inheritance is translated, notarized, and submitted with consular verification or apostille. And in the case of inheritance (gift), you must also submit a statement of inheritance (gift) tax payment.
It makes sense when you think about it.
Why is the proof of the source of investment funds so rigorously examined? After many consultations, I understand.
For example, suppose a Korean wants to employ a foreigner or keep them in Korea, but there's no way to do it. E7 employment visa doesn't meet the requirements, nor does the person meet the requirements for D4, D2, student visas. In such situations, a D8 visa might seem like the last visa option that allows receiving a visa through a 100 million won investment.
The problem is the lack of money. So, research is done. Someone in Korea might suggest sending money to the applicant's parents or family, and then inheriting that money back to the applicant, and so on (in fact, during consultations about D8 visas, I sometimes hear quite ingenious ideas about the source of investment funds).
※ As one side evolves, so does the other.
NOTE!!
1. The documents mentioned above are not exhaustive for proving the source of investment funds.
Depending on how the investment funds enter Korea, i.e., the process by which the investment funds enter Korea, the flow of investment funds can vary greatly. Therefore, the transaction statements of the relevant accounts that show the flow of investment funds must also be submitted.
※ The transaction statements should clearly show the date, time, account number, who sent the money, and who received it.
※ And when finally remitting the investment funds to Korea, most people open a dollar account and remit the money in dollars. Naturally, the dollar account transaction statement must also be submitted.
2. Depending on the country, it can be difficult to make bank transfers from the local country to Korea.
There are also countries where the amount that can be transferred in one transaction is limited.
In such cases, some of the money might be sent through bank transfer, and the rest could be brought in cash (hand carry), or sometimes, the entire amount is brought in cash.
It is important to declare at the airport upon entry that the money is being brought in for investment purposes and to obtain a foreign exchange declaration certificate. And the purpose of investment must be specified in that foreign exchange declaration certificate.
※ In the case of hand carry, a foreign exchange declaration certificate is a mandatory document to submit.
