S. Korea’s big businesses setting up more firms in tax havens: report
South Korea’s largest business conglomerates have been setting up more paper companies in tax havens around the world, a report by a local corporate research firm showed Monday.
With the exception of holding companies for shipping lines, the number of South Korean companies located in the top 10 offshore tax havens stood at 86 last year, up from 54 in 2012, according to Chaebul.com. The companies are affiliates of the 40 largest family-run conglomerates.
The tax havens checked include the Cayman Islands, the Virgin Islands, Bermuda, Barbados, Panama, the Labuan territory in Malaysia, the Marshall Islands, Mauritius, Cyprus and Switzerland. These areas are popular because companies and individuals are either exempt from taxes or are subject to very light tax rates.
The report said the Cayman Islands were especially popular, apparently as the nearby Virgin Islands were getting examined by tax authorities to ferret out tax dodgers and for any ties to terrorist organizations.
The research firm said SK Group had the largest number of companies in the tax havens, with 35. This is about 40 percent of the total.
Besides SK, Lotte had 13 firms in tax havens, followed by five for Hyundai Heavy Industry Group. Samsung and Hyundai Motor groups, the country’s two largest conglomerates, and LG each had three firms.
The latest findings show 41 South Korean companies in the Caymans, up 23 from the previous year.
Of these, 29 belonged to SK as of late 2013, an increase of 21 from the previous year.
The number of South Korean firms in the Virgin Islands and Panama stood at 15 each, with Bermuda having four, the report said.
For Switzerland, Samsung and GS groups each set up one firm in the Central European country last year.