Korea: Still only half in love with foreign investment

Korea’s love-hate relationship with foreign capital continues. In October, the government announced that it would be seeking tax payments totalling $210 million from five foreign private-equity investment firms that relate to profits earned from investments in Korean businesses.

The payments are being sought despite the fact that the foreign firms, which include Carlyle and Lonestar, employed deal structures in jurisdictions with double-taxation treatments with Korea. What most foreign investment firms would regard as legitimate taxation mitigation techniques are being regarded increasingly in Korea as tax evasion.