Concerns about "whether to sell U.S. stocks" are surging. This is because new tax regulations are acting as a major variable for investors planning international immigration. Previously, the departure tax, commonly referred to as the "departure tax," which applied only to major shareholders of domestic stocks, has now expanded to include overseas stock holdings. This regulation will take effect for those departing after January 1, 2027, and the tax burden may be determined by how assets were structured prior to departure. Therefore, high-net-worth individuals with plans to emigrate have reached a point where they must comprehensively re-evaluate their asset structure.
The departure tax system is a unique mechanism that taxes unrealized gains on stocks or equity interests held by residents of South Korea emigrating abroad, treating them as if they had been sold just before departure. Even if no actual stock transactions occur, taxes must be paid based on this structure, implemented since 2018 under Articles 118-9 and below of the Income Tax Act. In the past, it applied only to major shareholders holding a certain percentage of shares (e.g., 1% for listed stocks and 4% for unlisted stocks) and those residing in Korea for five or more years within the 10 years prior to departure. However, recent amendments to the Income Tax Act and enforcement rules have included overseas stocks in the taxable scope, resulting in changes that now include overseas investors who were not previously considered review targets.
Advanced economies such as the United States also operate similar systems. The U.S. established a substitute taxation system for income sourced from the U.S. for 10 years after emigration through the Foreign Investment Tax Act of 1966 and the HEART Act of 2008. While the U.S. taxes based on the market value of all global assets deemed as transferred, Korea limits taxation to stocks and equity interests, though the scope is gradually expanding with the inclusion of overseas stocks. Additionally, while the U.S. allows deferral of payment under conditions such as providing adequate collateral, Korea also operates a similar system based on the principle of providing tax payment collateral, allowing the tax calculated at the time of departure to be deferred until the actual disposal date.
High-net-worth individuals managing assets through family offices or family offices view this regulatory change not merely as a tax issue but as a critical opportunity to redesign their overall asset structure. They must accurately assess unrealized gains in their overseas stock portfolios and compare and review which strategy is more advantageous: tax diversification through partial sales before immigration or local disposal strategies. They should also re-evaluate how family asset management corporations or trust structures are taxed upon departure and carefully examine post-emigration management plans, such as issues regarding resident status determination. With only a short time remaining before the January 1, 2027 implementation, those considering emigration should immediately begin reviewing their asset structure and, working with tax and legal experts, comprehensively design the departure timing and structure.