CapitalAug 19, 20261 min read
Moving money from Korea to the U.S. — contribution, loan, or intercompany
How you fund the U.S. entity changes taxes, reporting and how you get money back. Comparing the three approaches.
This article is general information, not legal or tax advice. It requires review by U.S. accounting and legal professionals before publication.
Once the U.S. entity exists, it needs operating funds. The same amount of money is treated differently depending on what you call the transfer — in the books, in tax, and when you want it back.
Three approaches
Capital contribution: Investing as equity. Simple to set up, but getting money back requires a dividend or capital reduction.
Loan: HQ lends to the subsidiary. Interest must be charged, interest payments may be subject to withholding and treaty rules, and terms should reflect market conditions.
Intercompany transactions: Funds move as payment for products, services or royalties. Transfer pricing documentation becomes important.
On the Korean side
Investments in and remittances to an overseas subsidiary may require foreign exchange reporting in Korea. Designing the U.S. structure and the Korean filings together avoids mismatches later.
In short
Most companies use a mix of all three. What matters is settling the proportions and sequence from the start.