Wealthy Koreans have an average W4.6 billion in overseas bank accounts, and while most of them belong to residents of Yongsan in central Seoul, which is home to many business owners and popular entertainers (US$1=W1,067).
The National Tax Service on Wednesday said 211 private individuals and 314 corporations reported that they hold overseas bank deposits totaling more than W1 billion. They hold a combined 5,231 overseas accounts with W11.48 trillion in deposits.
In June this year, the NTS told account holders to voluntarily report holdings outside the country, but most of those who did were already on the NTS's radar, while only a handful were new additions. Now tax officials are trying to bring criminal charges against those who fail to report large overseas bank accounts.
The NTS has already launched a tax probe of 38 individuals who have hidden their assets in overseas accounts.
Among those who reported their overseas bank accounts, 23 live in Yongsan and hold W177.3 billion, the largest amount and number of accounts. Next were residents in Apgujeong, Cheongdam and Nonhyun in the affluent Gangnam area south of the Han River, with 21 reported cases, while 19 cases were reported in Samseong, Daechi and Gaepo, also in southern Seoul.
"Among the individuals who reported overseas bank accounts were company chairmen, popular entertainers, athletes and self-employed individuals and professionals," an NTS official said. "But we can't divulge their identities due to confidentiality rules."
Each individual had an average of 3.6 overseas bank accounts with W4.6 billion each, according to the NTS. One individual held 35 bank accounts with W60.1 billion.
The U.S. is the most popular country for rich Koreans to park their money. A total of 408 overseas accounts were opened in U.S. banks and contained a total of W497.3 billion. Next was Canada with 68 accounts, Japan with 63, Hong Kong with 59 and Singapore with 48. The accounts in Singapore held the second largest amount of money totaling W150.9 billion.
The NTS said a lot of Korean students are studying in the U.S., Canada and Japan, which appears to be the main reason for the high number of bank accounts Koreans hold there, whereas rich individuals tend to hold accounts in Hong Kong and Singapore, which pay very low or no interest.
Only two Koreans reported accounts in Swiss banks amounting to W7 billion, as did five corporate entities, which reported W100 billion, according to the NTS.
A total of 405 accounts were opened in banks in the United Arab Emirates by Korean companies, the most popular country among businesses. The NTS said the reason seems to be the large number of Korean building firms that are engaged in projects in the Middle East, which tend to open accounts in Dubai.
The next most popular country among corporate entities was Vietnam with 389 bank accounts, followed by China with 364.