More than one in 10 overseas corporations owned by Korea’s 30 major conglomerates are based in tax havens, a website reported on Monday.
According to online data service provider chaebol.com, Korea’s 30 major business groups operate 231 subsidiaries in tax-havens such as Hong Kong, Luxembourg, Bermuda and the Cayman Islands.
Samsung Group topped the list with 38 units in tax havens including Hong Kong, Malaysia, Singapore, the Netherlands and Panama.
Lotte Group ranked second, operating 32 units in tax havens including the Virgin Islands, followed by SK with 25, LG with 21, CJ with 19, and Doosan with 17.
GS Group and Hyundai Group held nine and eight, respectively. Among others were STX (seven), Hanjin (six), Hyundai Motor (four).
Several of the overseas units in such areas providing tax benefits are reportedly known as bogus firms with no business activities, allegedly established to raise offshore funding at lower costs.
The number accounts for 12.7 percent of the combined 1,831 overseas corporations owned by the 30 conglomerates. Their establishment of businesses in tax havens is regarded as a move to enjoy tax exemption or to pay lower taxes.
This means each major Korean business group operates seven or eight overseas tax haven-based units on average.
Hong Kong hosted the most foreign tax haven units of local conglomerates, accounting for 72 of the total 231 entities, followed by Singapore at 47 units, according to the data.
In 2002, the Organization for Economic Development and Cooperation designated 35 countries and regions, including Ireland, Switzerland and Marshall Islands, as tax havens.