Alex Jensen: It’s Monday, December 6^th, you’re listening to Koreabizcast with the KBLA. I’m your host, Alex Jensen. And we recently had some good advice. If you’re starting a business in Korea, find a good accountant. So, we’ve done that, and she’ll be joining us today to offer us what may be some very useful tips for you. And I hope some good insights for everyone. This episode is brought to you by Eastpoint Partners offering an unparalleled Asia wide network of relationships with corporates, governments, and investors.

Alex Jensen: So then, I am delighted to say we have on the line Christie Lee, CPA and Executive Consultant at Hana tax, which is based in Gangnam, just south of the river for the Seoul for those who are not familiar with that, thank you very much for speaking with us today.

Christie Lee: Thank you for having me, Alex.

Alex Jensen: I know that you’ve been really active on LinkedIn liking some of our posts, and I’ve known you for a while, Christie. So, it’s a real pleasure to have the opportunity to actually interview you for the first time normally, I think you’re asking me questions. And the first thing that I wanted to ask you Christie is, how did you first get into accounting?

Christie Lee: Yeah, when I went to the university to major Business Administration, I wasn’t sure whether I’m going to do marketing, accounting, or other subject. And then I was exploring a few subjects to find my best interest. Then, at the time that I was in the US university as an exchange student program in 1996. I was in one of the cost accountings classes which I found my enthusiasm there. And from then I had to my passion and accounting work and pursued my dream.

Alex Jensen: Presumably, even before that exchange program, your English must have been good, and it’s excellent, now. It feels like you’ve spent a lot of time abroad aside from what you just described. How did you get so fluent?

Christie Lee: Thank you for the nice words. And I know I need, I have a lot of room to develop, I wish it’s better. In 1982 to 1984, my father was admitted to government sponsored scholarship program in US, actually he was working in National Tax Service. And then they had two-year free MBA course, for the available public officers. So, he had the choice to either go to Memphis or Oklahoma which he chooses Oklahoma. So, at the age to seven to nine, I lived in Oklahoma, USA, which was a key time for me to speak up with English since I was at the age seven to nine. And it helped me a lot and in my whole life.

Alex Jensen: Yeah, well, you weren’t learning financial terms, presumably at seven to nine.

Christie Lee: No, no.

Alex Jensen: Again, it’s easy area that you work in to have to speak in English when you do that with clients. And actually, it’s interesting that you seem to achieve this niche of English-speaking clients in Korea. Was that your goal or did it happen naturally because of your language capabilities?

Christie Lee: My blood flows through my family, my father was an accountant. And then I naturally became to know what he does and how he helps the company. Foreign client was half of his clients, and he had half local clients. So here were, he had his own accounting company, which I joined after my graduation. And he and I contributed together to Korea Herald about tax tips in Korea. The name of the title was Tips on Tax, but actually it was so substantial international transactions. So, it was not very, very easy topic. But and when we wrote the articles, there was a time that Seoul Global Center personnel read our article and approached us asking some questions and see if we can help together. After that I became a regular speaker in Seoul Global Center, giving monthly tax seminar and then I became to help lot of foreigners filing the Korean taxes. That’s how I started my career.

Alex Jensen: Has it become harder during the pandemic because perhaps foreigners leaving Korea or maybe their financial circumstances or others changing?

Christie Lee: Yeah, true at the beginning of the pandemic, we say that Korea is very good at defend ourselves and trying to do a lockdown. But after a while, actually lot of foreigners left because the vaccine was not provided quickly as we expected. So, a lot of foreigners had worries about the Korea situation. But fortunately, now a lot of people are fully vaccinated. So, there were some people that went back to their country to get the vaccine and some of them still open their business but control and remotely.

Alex Jensen: Yeah, I mean, I guess for you, your services a lot can be done remotely as well with careers and sending information via email and phone conversations. But it might be challenging to find new clients during these circumstances, how is your approach to building a network changed over the last two years?

Christie Lee: Yeah, that’s true. Before I tried to attend a lot of Chamber of Commerce meetings, or year and gala parties to find people meet people make sure that I am presence. And to see the people that I already knew, after the pandemic, everything shifted to online. However, I see that there are increasing number of app-based business, technology-based business. So, I do have lot of startup client compared to two other years, and there are big Influencer or YouTubers that I am representing. And they have all different kinds of questions that I would not have before, for example, how they are going to report to the YouTube income, and how about the how the YouTube AdSense work, and how to make the Google not withhold the high tax amount? So, these are the new era of business and because of the uprising and businesses, overall, my business actually grew a bit in recent two years.

Alex Jensen: That’s amazing, well done by the way. I mean, I found you through word of mouth. And the way that happened was I needed an account in quite urgently at the time it was a few years back and I shopped around, I mentioned this briefly on one of the previous Koreabizcast episodes. And the prices that were being quoted were high but more concerning than that was that they weren’t really able to deal with my questions. And then when I found you, not only were we able to find a decent agreement for me, financially, but you were able to tackle everything that I needed to tackle, and you helped me a lot because I had a family with children. And there were certain benefits with that. So, I want to publicly show my appreciation for that. And I think I can say with total honesty, what a wonderful service you provided me. But I also wanted to ask though, how you find people? Is it through word of mouth like that, generally speaking, or do those events, or perhaps, media appearances like this actually make a huge difference for you as well?

Christie Lee: Yeah, thank you for nice words. And I’m also very glad and happy to support you and other foreigner. Through this pandemic, I felt that I need to give a lot to help people. Those kinds of seminars, when people had to book for class and actually attended the class, I could only serve 20 or 30, maximum 70 people. But nowadays, there are so good platforms. And for example, people want to know about Hometax, what is Hometax? Who doesn’t mean you have a tax at home or what is it? It is a Government portal website, basically having all my information, but it is very difficult to log in very difficult to understand. And especially if you have a Mac, you would hardly be able to even log in and see your information. So, these kinds of things, I tried to make a short video, make an easy PowerPoint, PowerPoint material to ease people to and help people to understand it. So, I’m very happy to share my knowledge and through the sharing my knowledge, I think people learn and get to know me and some of them ultimately become my client.

Alex Jensen: Aside from that question about what is Hometax and aside from maybe some of the questions that YouTube has asked you, what are the most common queries that people come to you with?

Christie Lee: At first, do I even need to pay tax in Korea. For example, if I’m hired by an American company and I physically live in Korea, and I’ve been here less than a certain period of time. Am I taxed liable? is the one of the questions I get And then they ask what is being Korean tax resident overseas tax resident? So, it starts, am I liable or not?

Alex Jensen: And you help people not only deal with that liability, but I think you also really do your best to find out where they might be able to reduce their payments,

Christie Lee: Of course.

Alex Jensen: Legally of course, Christie, What about this whole area of starting a business in Korea? It’s something that people might find intimidating. We went through the nuts and bolts with of this with Gordon Dudley the other day, actually. And we talked about the absolute importance of having an accountant. So, let’s say we were now with you at that step of the way. What’s your advice to people when they say, ‘Right, I want to start a business? I don’t know how to do it’, or I know how to do it but I I’m not sure how to handle the taxation side.

Christie Lee: Yeah, starting a business in Korea is overall pretty straightforward. There are some things that that bugs foreigner, basically, they say, do I still need a physical office when everything can be done online? Basically, all I need is a laptop. Why do I need to register an office? while it is easier and lenient in many other countries to have an office without having a physical address and I have to be very elaborating the, my conversation saying that still your registered office decides to district tax office, if I’m based in Gangnam office, Gangnam Tax Office is my district tax office, for example. So, these kind of finding our offices on hurdle for them and also banking. Sometimes bank limits how much you can withdraw at once you open a company. So, they limit the amount and limit the credit card spend the expenditure amount as a company credit card expenditure amount, and these kind of limitations bothers people to be bullish and open their own company.

Alex Jensen: There might also be visa considerations, I presume for people coming here from abroad. Do you get many of those cases or is it usually people already on the ground?

Christie Lee: Many, many, many questions regarding the visa. Nowadays, a hot topic is F27, how to maintain F27? What is this Sodeug geum-aeg (소득 금액) figure that you need to meet to be to stay as F27? What is the way to change to F5? is the question I get a lot among the visa documents; tax document is one of the crucial documents the immigration officers looking for. They sometimes look for a certain go over 30 million reports, go over one-time GNI, go over two times GNI. So, I need to make sure what is your visa requirements before filing any taxes. Because for example, if I make a mistake and they did not had a proper visa, but I did the tax filing it they could have an exit order. And that is the case that you want to meet at least that is the last thing you want to face. So, I want to make sure, I need to make sure that at least their visa allows them to properly work in the sector. And then the, whether they want to move to another visa or continue with their visa.

Alex Jensen: Because there are various types of F visa which are very good, of course for all sorts of things in Korea, you can get the F6 when you’re married to a Korean spouse, the F27 that you mentioned. And then the F5 is more to do with long term residency and requires extra hoops beyond just marrying which itself is quite a big step. There’s also though the various D numbers and some of them are related to working Korea in business. Is that a very challenging route these days?

Christie Lee: D7 or D8 visa is pretty challenging, but, and it only guarantees basically a year and then the next year you go there you need to show them your company’s growing, your company is hiring, your company has business partner. So, it is pretty challenging but pretty, I would say pretty straightforward. If you meet A, B, C requirement, it is pretty sure that you will get D7 or D8.

Alex Jensen: And it also requires a fair bit of money in the bank to start off with, doesn’t it?

Christie Lee: Right, it requires you to invest 100 million Korean won, which is around 90,000 US dollar.

Alex Jensen: Yeah, slightly less dollars than it was when I first arrived in Korea. If that’s any consolation people listening to be US right now, another factor might be as a freelancer which I was when I first came to you. And actually, whether you’re an F visa or whatever it happens to be the freelance question, I guess just depends on how complex your sources of income are. Because if it’s one source of income, maybe you can handle that part of the tax on your own. But if you’ve got a family and your various sources of income, it’s generally going to save you money, isn’t it? to have an accountant?

Christie Lee: Absolutely. As a freelancer, usually they already got taxed as 3.3%. So, people said that ‘Christie, they took my tax, why do I have to finalize it?’ So, a lot of freelancers just didn’t know that they had to file. And then after two years, after three years, they get a very surprising bill, and very disappointed with the Korean government. Once it is already, the tax office already billed you with your prior taxes, it’s very, almost very difficult, almost impossible to change the bill. So, Tax Office usually send some kind of notification which is named Gwase yego tongjiseo (과세 예고 통지서), so that they will issue a bill. So, if you just received a notification, that’s the time you can handle it. But once the bill is printed very difficult to change. As I just mentioned, freelancers think 3.3% is taken off. So, there their duty is all done. But it’s actually not that case. 3.3% is a flat tax rate that that’s taxed even though you earn 1 million a year, 100 million a year, or even more or less. So that’s not a final rate. That’s just a flat rate that they deducted for everyone. And by next year, may you need to reconcile and do the final return again, some people who gets to get in 0%, because their expenses were big, then they get the full refund of 3.3% they paid. If you are taxed at the final higher rate, for example. 6.6%, then you need to pay some additional taxes. And that is what I do for the English-speaking clients on May every year.

Alex Jensen: Now another area I wanted to ask about is cryptocurrency investments with so much interest in this area. Have you heard clients ask about that?

Christie Lee: Many, many clients, and in recent two or three years, and there was a time about the Kimchi premium where a lot of people wanted to get in that business and want to do that business. Korean government and the policy makers were very slow and how they were going to tax the cryptocurrency. So, the legislation was very slow and wasn’t sure and a few months ago, they decided that from 2022, they will make it official to be taxable. And then a few days ago, they say they’re going to push it by taxing it from 2023. So, there is some room that people can still invest and deferred the reporting.

Alex Jensen: Do you think that it’s still one of those areas that’s going to evolve massively? Again, these are hot button topics that have come up repeatedly during some of these interviews we’ve had. And they tied together through a kind of web of conversations like Metaverse, NFTs Decentralized Finance, seems to challenge the old-fashioned attempt to bring to light finances something that accountants need to know all about. But there’s this whole murkier digital twin world where perhaps things can happen in a slightly more discreet fashion. Is that something that you’re noticing?

Christie Lee: a lot of people are interested in those kinds of area, NFT, Yeah, Metaverse. They are interested in cryptocurrency and altcoin and many others. And I think still there are young people who rather do the trading instead of you know, real business or finding a job. And I think that’s a way of their investing life goes. So, I see the increasing interest on that area.

Alex Jensen: But do you think it’s also a way that people are trying to hide money?

Christie Lee: Actually, I think there is a room that still there, it’s not very easy because of the blockchain technology itself. It’s not very easily found by the government or the authorities. So, we can say that every time I have such question, they say that ‘Would they ever even find me out or not?’. As of current technology, with the government system, I think it’s not very easy for them to check these information unless they target one person or are there they are very in a very severe audit and would really dig in a lot of information from the personnel. Otherwise, it’s not very easy for the government to track those transactions.

Alex Jensen: Well, we’ve handled a few areas of interest there may be many more if people want to find you, how do they do so?

Christie Lee: Well, they can visit my website, www.taxinkorea.com and on Facebook, LinkedIn, they can easily type taxinKorea and find where I am, and I post the seminar, webinars I do. Anyway, I’m giving another workshop webinar on December 17 with the Yeoksam Global Village Center, I am very closely related to what the Global Center does, main Seoul Global Center, Yeoksam Global Center, Itaewon Global Village Center, they do amazing programs and for December 17. It’s an all-day seminar talking about visa, tax, real estate and other contracts labor’s so and they’re trying to really support people and there are great resources there.

Alex Jensen: Excellent. Oh, we’ll have to do that. And I encourage people to do so if they haven’t already found it because I know you’ve got quite a big niche as I refer to it before as well. By the way I’m curious too. Are you still using that standing desk that you had years ago

Christie Lee: There was a time that I you know, used it for like four or five hours a day I almost forgot that I am standing and then my knee kind of hurt. So, but I think like one hour a day would be good, especially when you feel depressed and when you want a coffee break. I think it’s good to stand up and do your thing.

Alex Jensen: Well, wellness in the workplace a whole other topic we can cover with you in the future. Christie Lee, thank you so much.

Christie Lee: Thank you so much for having me and have a great time.

Alex Jensen: Also, I want to thank Eastpoint Partners again for making today’s episode possible. And let me wish everyone a great start to a hopefully productive week. See you again tomorrow.