Tax Planning
Tax Planning for High Net Worth Individuals Considering Exit from Korea
Understanding Korea’s exit tax, residency status, and asset exposure is now critical for HNWIs considering leaving South Korea to reduce tax obligations.
By NomadicTax Research Team • 5-8 min read • August 12, 2026
## What Is Exit Tax in Korea?
South Korea imposes an **exit tax** (퇴거자 과세) on individuals who have held **resident status for five years or more**, and who own **net unrealized capital gains above KRW 1 billion** (previously KRW 1.2 billion).([g.nts.go.kr](https://g.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=238935&mi=40370&utm_source=openai)) It’s part of the international trend toward taxing capital gains accrued while a person was resident before they depart.
When someone qualifies as a “departing resident,” their unrealized capital gains on **domestic and foreign publicly traded securities** are taxed as though they were sold on the day they cease Korean residency. Non-public securities, real estate, or private company shares may face different rules or valuation challenges. Although as of August 2026, there is no announcement of policy tightening or raising thresholds. |
## assessing your exposure: what counts and what doesn’t
To plan, you need to evaluate your assets and status in several categories:
| Asset / Factor | Included in Exit-Tax Base | Notes |
|---|---|---|
| Domestic stock, foreign stock (publicly traded) | ✔️ | Valued at “market price” on the day you cease tax residency. |
| Private shares, foreign real estate, crypto assets | ❓ | Not clearly specified as exit tax base for non-public securities, crypto remains under separate taxation rules; you may avoid exit taxation for some of these, depending on legal interpretation. |
| Residency period | Must be 5 continuous years or longer during the 10 years preceding departure. |
## Strategies to Mitigate Exit Tax Exposure
- Consider **selling or gifting assets well before** termination of residency is effective—especially publicly traded securities. If triggered, exit tax charges apply on embedded gains. |
- If staying until 2027 doesn’t add value (or increases tax exposure), plan the timing of your exit to fall in a low-income or low-asset year. |
- Use double tax treaties: some treaties allow **foreign credits** or **relief** if foreign assets are taxed locally. But within Korea’s exit tax, foreign income/asset element exposure is narrow. |
- Use foreign trusts or holding companies only where rules allow—but beware, managing substance and transparency requirements is critical under Korean law. |
## Impact of Crypto & New Tax Reforms
- Crypto gains accrued post-2027 will be taxed under Korea’s virtual asset income rules (see article above). Those prior to 1 January 2027 are valued for cost basis by actual purchase vs fair market price, whichever is higher. This affects people exiting near the threshold. |
## Case Example
Han has lived and worked in Seoul for 6 years. He owns:
- KRW 1.2 billion in Samsung Electronics shares (publicly traded), bought 3 years ago. |
- KRW 800 million in foreign blue-chip stocks. |
- Crypto worth KRW 500 million today, bought in 2024. |
If Han renounces residency:**
- Public stocks gains (1.2 B minus purchase cost) taxed at exit. |
- He avoids exit-tax on crypto, but later crypto gains post 2027 will face regular crypto taxation. |
Plan: Han could sell Samsung before leaving to crystallize gains under ordinary capital gains rules (possibly at favorable rates), reducing exit tax. Alternatively, he might gift some shares to non-resident family members to remove them from his exit base (though gift tax/valuation rules apply).
— NomadicTax Research Team