KYC, AML, and Banking Compliance Requirements Explained
Foreign companies expanding into Korea often assume that opening a corporate bank account will be straightforward once the company is incorporated. However, since 2024–2026, Korean banks have significantly strengthened their Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
As a result, many foreign-invested companies experience unexpected delays, additional document requests, and mandatory in-person verification.
This guide explains the real reasons behind these stricter requirements and how foreign companies can successfully open and operate a corporate bank account in Korea.
Why Opening a Corporate Bank Account in Korea Has Become More Difficult
Korean banks are now subject to strict financial regulations under both domestic and international compliance frameworks, including:
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Financial Action Task Force (FATF) global AML standards
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Korean Financial Services Commission (FSC) regulations
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Enhanced cross-border transaction monitoring
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Internal risk management policies of Korean banks
Because foreign-invested companies involve international ownership and transactions, banks must conduct enhanced due diligence before allowing account activation.
This applies to all major Korean banks, including:
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KEB Hana Bank
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KB Kookmin Bank
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Shinhan Bank
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Woori Bank
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IBK Industrial Bank of Korea
What Korean Banks Verify During the KYC Process
Korean banks must clearly identify and verify the following information:
1. Ultimate Beneficial Owner (UBO)
Banks must identify the individual(s) who ultimately own or control the company.
This includes reviewing:
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Shareholder structure
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Parent company ownership
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Director and shareholder identification
2. Business Activity and Purpose
Banks will verify whether the company has legitimate business operations.
They may request:
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Service agreements
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Client contracts
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Invoices
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Business plans
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Office lease agreements
Shell companies or inactive entities face higher scrutiny.
3. Source of Funds
Banks must confirm that funds entering the company are legitimate.
This includes verification of:
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Foreign direct investment capital
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Parent company transfers
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Intercompany transactions
4. Expected Transaction Profile
Banks assess:
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Expected transaction volume
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Frequency of international transfers
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Countries involved in transactions
This helps banks evaluate risk levels.
Common Delays Foreign Companies Experience
Foreign companies frequently encounter the following challenges:
Extensive documentation requests
Banks often request multiple rounds of documentation, including:
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Certificate of Incorporation
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Corporate registration certificate
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Articles of Incorporation
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Passport copies of directors and shareholders
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Parent company registration documents
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Shareholder structure chart
Even after submission, banks may request additional supporting documents.
Mandatory in-person bank visit
In most cases, the legal representative or authorized person must visit the bank in person.
Remote account opening is generally not permitted for foreign-invested companies.
The bank officer may conduct a compliance interview to verify business legitimacy.
Delays in activating foreign currency transfers
Even after opening the account, banks may require additional compliance review before enabling:
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Incoming foreign currency transfers
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Outgoing international remittance
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Online banking access
The first transaction typically undergoes enhanced compliance review.
Once completed, future transactions become smoother.
Real Timeline: What Foreign Companies Should Expect
Typical timeline:
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Company incorporation: 3–7 business days
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Bank account opening appointment: 3–14 days
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Compliance review and activation: 1–3 weeks
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Full activation of international transfer capability: up to 4 weeks
This timeline varies depending on:
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Bank
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Ownership structure
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Business activity type
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Completeness of documentation
How Foreign Companies Can Reduce KYC Delays
Foreign companies can significantly reduce delays by preparing the following in advance:
Prepare a clear ownership structure chart
This helps banks quickly identify UBOs and reduces compliance risk.
Prepare business supporting documents
Examples include:
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Contracts with customers or parent company
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Business plans
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Service agreements
This demonstrates legitimate business operations.
Work with a Korean tax and compliance advisor
Local advisors can:
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Communicate directly with banks
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Assist with document preparation
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Respond to compliance questions
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Reduce delays and compliance risk
This is especially helpful for foreign companies unfamiliar with Korean banking procedures.
Why This Matters for Foreign Companies Expanding into Korea
A corporate bank account is essential for:
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Receiving capital injections
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Paying employees
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Paying taxes
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Conducting business transactions
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Receiving customer payments
Without proper preparation, banking delays can slow down business operations.
Understanding Korean banking compliance requirements is critical for smooth market entry.
Corporate Banking Support for Foreign Companies in Korea
STAR TAX & BPO provides professional support for foreign-invested companies operating in Korea, including:
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Foreign company incorporation
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Corporate bank account opening support
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Corporate tax compliance
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Payroll and social insurance compliance
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VAT and corporate tax filing
We assist foreign companies in navigating Korean banking and regulatory requirements efficiently.
If your company needs assistance, please contact us.
