Money Lending Business Registration in Korea
A money lending or loan brokerage business in Korea must be registered for each business office with the competent city/province governor (or, in certain cases such as having offices in two or more cities/provinces, with the Financial Services Commission), after meeting requirements such as equity capital, completion of lending business training and a fixed place of business. Registration is valid for 3 years.
Summary
- Scope: money lending and loan brokerage businesses (excluding credit financial institutions).
- Registered with: the city/province governor with jurisdiction over the office (the Financial Services Commission for offices in 2 or more cities/provinces, etc.).
- Key requirements: equity capital (KRW 300 million for corporations and KRW 100 million for individuals; KRW 30 million for loan brokerage only), completed training, a fixed place of business, and no disqualification of the representative or officers.
- Validity: 3 years from the date of registration.
Does a money lending business need a permit or a registration?
A money lending business requires a registration, not a permit. A person who intends to run a money lending or loan brokerage business (excluding credit financial institutions) must register each business office with the competent city/province governor, while those who intend to have offices in two or more cities/provinces or to run a loan-receivable purchase and collection business, among others, register with the Financial Services Commission.
What are the registration requirements?
The requirements for registration with a city/province governor are: (1) equity capital (for non-corporations, net assets) of KRW 30 million for a person running only a loan brokerage business, and otherwise KRW 300 million or more for a corporation or KRW 100 million or more for a non-corporation; (2) completion of lending business training (within 1 month after registration if there is an unavoidable reason); (3) a fixed place of business, staff, computer facilities, etc.; (4) the representative, officers and general business manager are not disqualified; and (5) for a corporation, no fine or heavier sentence for violating certain laws in the past 5 years, no closure in the past 3 years and no registration cancellation in the past 5 years. Disqualifications of the representative and officers include being a minor, an adult under full or limited guardianship, a bankrupt who has not been reinstated, or a person for whom 5 years have not passed since serving a sentence of imprisonment without labour or heavier.
Which documents are needed?
Submit the lending business registration application published by the Financial Services Commission with documents proving the office location (the property register or a copy of the lease), a copy of the training certificate, documents proving equity capital (net assets), documents proving a guarantee deposit or insurance/mutual-aid coverage, and other documents published by the Financial Services Commission. The training certificate must be for training taken within 6 months before the application date.
What is the procedure?
(1) Complete lending business training → (2) prepare equity capital, the place of business and a guarantee deposit (or insurance/mutual aid) → (3) submit the registration application and documents → (4) check of the accuracy of the application and duplication of the trade name (supplementation may be requested within 30 days) → (5) entry in the register and issuance of the registration certificate. If registered details change after registration, change registration must be made within 15 days of the change.
How long does it take?
The number of days for processing should be confirmed with the competent authority. The period for correcting or supplementing the application (within 30 days) is not counted in the processing period. Registration is valid for 3 years from the date of registration and must be renewed.
Which authority handles the registration?
Register with the Mayor of the Special City, Metropolitan City or Special Self-Governing City, or the Governor of the Province or Special Self-Governing Province, with jurisdiction over the business office. Those who intend to set up offices in two or more cities/provinces or to run a loan-receivable purchase and collection business, among others, register with the Financial Services Commission.
Why is a registration returned?
Typical reasons confirmed in the law: insufficient equity capital, training not completed, no fixed place of business, disqualification of the representative, officers or general business manager, application details that do not match the facts, or use of a trade name already registered. Running a lending business without registration can lead to imprisonment of up to 10 years or a fine of up to KRW 500 million.
What can an administrative agent help with?
YouSun Administrative Agency prepares the registration application and supporting documents and submits them to the authority on your authorization. Loan consultation, debt collection, taking out guarantee insurance and tax work are not handled. Work restricted by other laws cannot be handled, and litigation or court representation is outside the scope of an administrative agent and is not offered. Whether registration is granted is decided by the registering authority.
Frequently Asked Questions
Q. Where do I register a money lending business?
A. With the city/province governor with jurisdiction over the business office; in cases such as having offices in two or more cities/provinces, with the Financial Services Commission.
Q. How much equity capital is needed?
A. Under the city/province registration standards, KRW 30 million or more for loan brokerage only, otherwise KRW 300 million or more for a corporation and KRW 100 million or more for a non-corporation.
Q. Do I need training before registration?
A. Yes. You must take lending business training in advance; if there is an unavoidable reason such as a natural disaster, your own illness or an overseas business trip, you may take it within 1 month after registration.
Q. How long is the registration valid?
A. 3 years from the date of registration.
Q. What if registered details change?
A. If registered details change, change registration must be made within 15 days of the date of the change. When closing the business, you must report the closure.
Q. What happens if I operate without registration?
A. You may face imprisonment of up to 10 years or a fine of up to KRW 500 million.
Contact
YouSun Administrative Agency (+82-2-363-2251) supports document review and filing with the competent authority.