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Foreigners Can Invest by Loaning Stocks

Posted November. 03, 2001 09:31,   


People studying overseas will be allowed to take out an additional 50,000 US dollars not related to education expenses by reporting it to the customs office beginning on November 6.

Foreigners will be also allowed to invest by loaning stocks from financial organizations, such as security companies or trust investment companies.

The Ministry of Finance and Economy announced yesterday that it would carry out such a revised regulation on foreign currency transaction from November 6.

According to the revised regulation, people studying overseas can take out an additional 50,000 US dollars not related to education expenses if they report it to the customs office. Currently, when people studying overseas take maximum 100,000 US dollars, they should have verification from banks, and when they take more than 100,000 US dollars, they have to report to the Bank of Korea. Unverified or unreported money is not allowed to be taken out.

The revised regulation also increased the stock limit which foreigners can borrow from the financial organizations from 1 billion won to 5 billion won per person, and allowed to make stock investment account in order to settle a loan for the stock transaction. Foreigners could not invest by loaning stocks because stock investment account was not allowed until now.

The government directed to separate the offshore fund from its own offshore finance company in order to prevent the offshore fund from being abused as a means to manipulate stock prices through illegal invitation of foreign fund, or to obtain one`s own company`s stocks.

The offshore fund established by the financial organizations should receive the supervision such as drawing up the investment limit, credit grant limit, and consolidated financial sheets. The offshore fund established by the listed companies should notify the content of investment at the business report and the consolidated financial sheets.

The Bank of Korea decided to export the Korean won to the foreign banks to enable people to exchange won overseas for two month before and after World Cup Game and Asian Game next year.