How foreigners invest in Korean stocks: accounts, registration and taxes

This guide is for expats living in Korea and overseas investors who want to buy Korean listed stocks directly. The short answer: it is now simpler than it used to be. The old mandatory registration step was abolished in 2023. But you still need the right accounts, and the tax rules differ depending on whether you live in Korea or not.

How it works

The old registration system and what replaced it

Until December 14, 2023, every foreign investor needed an IRC (Investor Registration Certificate), a permit issued by the Financial Supervisory Service (FSS, the financial markets regulator). The system had been in place since 1992. The Financial Services Commission (FSC, the policy body above the FSS) abolished it as part of a broader push to qualify the Korean market for inclusion in global index upgrades.

What replaced the IRC depends on who you are. Corporate investors now use an LEI (Legal Entity Identifier), a global standard 20-character code used by financial institutions worldwide. Individual investors use their passport number. You register these directly with the broker when you open your account. There is no separate government step.

One legacy note: if you already held a valid IRC number before December 14, 2023, you must continue using that number. You cannot substitute it with an LEI or passport number after the fact.

Opening a brokerage account

If you live in Korea and hold an ARC (Alien Registration Card, the residence ID issued to foreigners staying more than 90 days), visit a branch of a licensed securities company in person. Bring your passport and your ARC. If you have been resident for less than six months, also bring a certificate of employment. Once open, fund the account in Korean won (KRW) from a Korean bank account and trade through the broker’s app or website.

If you do not live in Korea, you cannot walk into a branch. Work through a Korean broker’s international desk, or appoint a standing proxy: a Korean bank or securities firm authorised to act on your behalf. The standing proxy handles account paperwork, regulatory filings, settlement, and corporate actions. You will also need a local custodian bank in Korea to hold your securities and manage KRW settlement.

A practical note: although the law no longer requires an IRC, many Korean brokers’ internal systems still expect an ARC and a Korean mobile phone number for identity verification. Non-residents should confirm exact document requirements with the broker’s international desk before starting.

The two exchanges: KOSPI and KOSDAQ

Both markets are run by the KRX (Korea Exchange), a single unified exchange formed in 2005 when the old Korea Stock Exchange, KOSDAQ, and the futures exchange merged.

KOSPI (Korea Composite Stock Price Index) is the main board, home to large conglomerates (chaebol, meaning family-controlled industrial groups) including Samsung Electronics, SK Hynix, Hyundai Motor, and LG. KOSDAQ (Korea Securities Dealers Automated Quotations) is the growth board for smaller companies, venture firms, and technology startups. It is broadly comparable to the Nasdaq in the United States.

Trading hours and price limits

Regular trading runs from 09:00 to 15:30 KST (Korea Standard Time, UTC+9), Monday through Friday. There is no lunch break; Korea eliminated it in 2000. In 2026 the KRX added a pre-market session from 07:00 to 08:00 KST and an after-hours session from 16:00 to 20:00 KST.

Korean stocks have a daily price limit of plus or minus 30% from the previous day’s closing price. A stock cannot rise or fall more than 30% in a single regular session. Korea moved from a 15% limit to 30% on June 15, 2015, to allow freer price discovery.

Currency conversion

Korean stocks settle in KRW. If your money starts in a foreign currency, you need two accounts at a Korean bank: a foreign currency account that receives your overseas wire, and a non-resident KRW account that holds the converted won used to buy stocks. On selling, proceeds flow back through the KRW account, can be converted to foreign currency, and remitted abroad. Since a 2024 amendment to the Foreign Exchange Transaction Regulations, you may convert at any licensed bank, not only the one holding your custodian account.

Why Korea does it this way

The IRC system was introduced in 1992 when Korea first opened its stock market to foreign investors. The registration requirement let regulators monitor capital flows and prevent nominee or anonymous trading. Over time it became a barrier: a foreign fund managing dozens of sub-funds had to obtain a separate IRC for each one, creating significant administrative overhead.

The 2023 abolition was one part of a multi-year FSC effort to meet the criteria for MSCI developed-market index inclusion. Replacing the IRC with globally standard identifiers brought Korea’s entry process closer to the norm in other major markets.

The numbers that matter

What it means for you

If you live in Korea (ARC holder)

1. Gather your passport and ARC. If resident under six months, also obtain a certificate of employment from your employer.
2. Visit a branch of a licensed Korean securities company (jeunggwonsa, the Korean term for a brokerage firm) in person. No prior government registration is needed.
3. Open a Korean bank account if you do not already have one. You will fund your brokerage account from it in KRW.
4. At tax time, dividends will have 22% withheld at source. If your home country has a lower treaty rate, file a refund claim with the National Tax Service (NTS) at hometax.go.kr. The NTS updates withholding tax treaty tables on its website.
5. Capital gains on listed stocks bought and sold through the KRX are generally exempt from Korean capital gains tax as long as you hold less than 25% of any single company. Check with the NTS or a Korean tax adviser if you approach that threshold.

If you do not live in Korea (non-resident)

1. Contact the international desk of a KRX-member securities company directly. Ask about their non-resident account-opening process and exact document requirements, as these vary by broker.
2. Consider appointing a standing proxy (daeriin, meaning an authorised representative), a Korean bank or securities firm licensed to act on your behalf. While not legally mandatory since 2023, it is practically essential for settlement, dividend collection, and regulatory reporting.
3. Open a foreign currency account and a non-resident KRW account at a Korean bank for currency conversion and settlement.
4. For corporate investors: obtain an LEI from a recognised Local Operating Unit in your country before starting. For individual investors: have your passport ready.
5. Dividend refund: since January 1, 2024, Korea withholds at the full 22% rate even when a tax treaty applies. File a refund claim with the relevant local tax office within five years of the withholding date to recover the difference.

Where to check for figures that change: Securities Transaction Tax rates: National Tax Service (nts.go.kr/eng), updated annually each January. Withholding tax treaty rates: NTS treaty tables, updated when treaties change. Trading hours and price limits: KRX (global.krx.co.kr), updated when rule changes take effect.

FAQ

Do I still need to register with the Korean government before buying Korean stocks?

No. The Investor Registration Certificate (IRC) requirement was abolished on December 14, 2023. Individual foreign investors now use their passport number; corporate investors use an LEI. You register these identifiers with your broker when you open an account. There is no separate step with the government.

Will I pay capital gains tax in Korea when I sell Korean stocks?

Almost certainly not, if you are a non-resident buying listed stocks through the KRX and you hold less than 25% of the company. Below that threshold, Korean law exempts non-residents from capital gains tax on listed equity sales. You will, however, pay a Securities Transaction Tax of 0.15% on the sale proceeds regardless of any gain or loss.

How much withholding tax is deducted from my Korean stock dividends?

The default rate is 22% (20% income tax plus a 10% local surtax). If your home country has a lower rate under a tax treaty with Korea, you can claim a refund from the National Tax Service. Since January 2024, Korea withholds the full 22% first and requires a separate refund application. Check the current treaty rate for your country at nts.go.kr/eng.

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