Looking at the current situation of foreigners living in Korea, as of November 30, 2021, there are 2.13 million people, with approximately 1.27 million (around 60%) residing in Seoul and the surrounding areas.
When foreigners move to Korea, one of the first things they usually need to do is open a bank account. The basic financial transactions they need to consider are:
1. Opening a bank account
2. Applying for internet banking (mobile banking)
3. Getting a credit card (debit card/cash card) linked to the account
4. Obtaining an OTP (One Time Payment) card
5. Acquiring a Digital certificate or Financial certificate
In Korea, cash transactions are minimal in daily life, and a significant portion of transactions is done through smartphones or cards (cash transactions account for less than 15% in public transportation). Because of this, foreigners living in Korea should prioritize opening a bank account and activating a smartphone line during their stay in the country.
Opening a bank account in Korea is subject to various regulations, such as the Financial Transaction Real-Name Act, so it's important to have a good understanding of these regulations.
Now, let's discuss what you need to prepare to open a bank account.
First, you need to determine whether you are temporarily residing in Korea or planning to stay for an extended period. Temporary stay refers to activities like tourism, short-term language studies, visiting relatives, and similar activities. Continuous stay refers to people who immigrate to Korea through marriage or engage in activities where they can generate income domestically.
According to Korean law, if you plan to stay for 183 days or more, you must obtain a residence confirmation card called an Alien Registration Card to prove your residency.
In other cases, the only identification document that can prove your identity in Korea is a passport. However, banks often refuse to open accounts for foreigners who only possess a passport without an Alien Registration Card because bank accounts can be used for illegal activities such as voice phishing and cryptocurrency transactions. Opening an account without an Alien Registration Card is not always impossible, but it is advisable for foreigners who need an account to obtain one.
If you plan to stay in Korea for 183 days or more upon entry, you should promptly apply for an Alien Registration Card through the Immigration Office (the application must be made within 90 days of entry, and it takes 2-3 weeks for issuance).
Once you have obtained the Alien Registration Card, you have overcome a significant hurdle in the process of opening a bank account.
Second, you need to justify the specific purpose for which you need to open an account. Banks usually require foreigners to fill out a bank form called the "Financial Transaction Purpose Confirmation Form" (either on paper or digitally) and submit related supporting documents. The bank will assess the authenticity of the source and intended use of the funds to be deposited into the account.
In most cases, you can prepare employment certification and wage statements as supporting documents if your main source of income is generated in Korea. If the purpose is related to leasing real estate and paying monthly rent, you can submit relevant supporting documents.
The Korean government has become increasingly strict in regulating the confirmation of financial transaction purposes. Opening an account directly associated with cryptocurrency transactions is practically prohibited. Below are the main purposes and supporting documents for which an account can be opened:
Employment Certificate, Payslip, etc.
Corporate/Individual Business Owner
Goods Supply Contract, Tax Invoice, etc.
List of Members, Group Rules, etc.
Utility Bill Payments
Receipt for Utility Bill Payment
Apartment Management Fees
Receipt for Management Fees
Documents that confirm the purpose of the account opening
So far, we have covered the process of opening an account for foreigners. Make sure you have the required supporting documents as specified in the Alien Registration Card and the Financial Transaction Purpose Confirmation Form.
Please note that the information on each document (name, telephone number, address, etc.) must be consistent, so be sure to double-check and submit accurate information.
If you are a foreigner who doesn't speak Korean fluently, it's helpful to visit the bank with someone who can speak at least some Korean. Additionally, since the initial account opening process may take some time, it's recommended to visit in the morning around 10 a.m. (except for general tasks like loans and foreign exchange, which are usually completed within 20 minutes).
Furthermore, after opening a bank account, you can also apply for a credit card (debit/cash card) and internet banking (smart banking), allowing you to engage in various non-face-to-face transactions. Korea offers the most convenient smart banking experience in the world based on advanced ICT technology.
BLT & Partners has the most extensive business network in Korea and a team of top-notch professionals, including IP attorneys, lawyers, financial experts, marketers, and more. If you’re looking to enter the Korean market, we have everything you need to succeed. Contact us today to learn more about how we can help you achieve your goals in Korea.