The Korea Herald


Conglomerates set up more units in offshore tax havens

By 김지현

Published : June 22, 2011 - 19:04

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The country’s top 30 conglomerates were found to have set up a spiraling number of overseas corporations in countries without tax treaties with the South Korean government.

Lotte Group had the largest number of corporations in such nations overall, according to, an online portal devoted to analyzing conglomerate activities on Wednesday.

As of last year, the conglomerate had 33 such offices, up from 29 last year.

Among them, four new corporations were established in areas such as the Virgin Islands that are commonly considered “tax havens.”

Samsung Group followed Lotte with 30 overseas corporations after adding seven more since last year. Four of them were in Hong Kong, with which Seoul is seeking a tax treaty.

“The reason for setting up these overseas operations in countries that pose taxation problems for the South Korean government seems clear,” said Chung Sun-sup, head of “If they were not out to avoid taxation, there is no need for them to seek out these regions, most of which have poor business conditions.”

Countries without tax treaties with the local government cannot all be considered tax havens, but they are often abused by corporations looking for ways to dodge taxes.

Tax treaties are thus established between nations mainly to exchange information for preventing tax evasion.

The data from comes on the heels of a recent scandal here over covert accounts in Switzerland established by a Korean who sought to dodge taxes via paper companies set up in tax-free or low-tax countries.

Companies claimed their overseas operations were for legitimate purposes.

“They are for legitimate global corporate activities,” Samsung Group officials said.

LG Group added eight more overseas corporations in countries without tax treaties to bring the total to 21 this year.

SK Group also had added three more since last year to operate 20 such operations.

By Kim Ji-hyun (