Korean-American retirees and young people looking for economic opportunities are returning to Korea in droves, several Korean publications have reported, based on reports released recently by the Korean government. Some Korean-Americans obtain their U.S. citizenship first, to allow them the freedom to move back and forth between the two countries, whereas others renounce their right to live in the United States to avoid taxation of their Korean assets.
A report published by the Ministry of Foreign Affairs of Korea shows that 2,128 Korean-Americans immigrated back to Korea in 2011 — a 7.6 percent increase over the previous year, the Korea Times reported. An excerpt is translated below.
Moreover, in 2008, for the first time in the 46 years since the Emigration Act [of the Republic of Korea] was enacted in 1962, the population of reverse immigrants to Korea, 1,034, exceeded the number of Koreans who immigrated to the U.S. The phenomenon continued to 2011, when Korean immigrants to the U.S. amounted to 618 — less than the 1,510 reverse immigrants [who returned to Korea].
In terms of reasons for reverse immigration, 21 percent of them go back to Korea because of their advanced ages; 19 percent return for jobs in Korea; 10 percent because of maladjustment to immigrant life; 7 percent for medical treatments; and 3 percent for schooling in Korea. Experts have said that immigrants make a U-turn to enjoy a life of ease in their old ages. Also, due to extended periods of recession in the U.S., more and more Korean immigrants have decided to live in Korea.
A week before the article above, the Korea Daily ran an article about reverse-migrating Koreans based on the annual report by the Korea Immigration Service of the Ministry of Justice. According to the report, 40,486 Korean Americans with United States citizenships live in Korea — 66 percent more than the number in 2007. Among those, the report found that 393 Korean-Americans were living in Korea illegally. An excerpt is translated below.
The report found that the reason why Korean-Americans who live in Korea has increased is that many Korean Americans want to enjoy a life of ease in their old ages with social security benefits, and [young immigrants] and second-generation Korean-Americans prefer getting jobs in Korea.
The number of Koreans who have permanent residency of the U.S. and report their domestic residence in Korea amounts to 33,903, which is 47 percent of the 71,582 who report their domestic residence in Korea but have permanent residency in other countries. Of them, 77.5 percent reported their residence in metropolitan areas such as Seoul or Gyeonggi-do. Among the 135,020 Koreans who are citizens of other countries and reported their domestic residency in Korea, 40,421 people are from the U.S., which accounts for 30 percent.
The Korea Times reported that many Koreans with permanent residency try to obtain their citizenship and, after that, leave the U.S. Sungnam Kim, 61, of Bayside, Queens, obtained his citizenship 16 years after he became a permanent resident of the United States. Kim said his reason for obtaining United States citizenship was to allow him to live in Korea in his later years.
Recently, the number of retired Koreans who try to obtain their [U.S.] citizenships, like Kim, has increased. This is because, after a law was changed, citizens can get their pensions while living in Korea. Also, they can go back and forth from the U.S to Korea freely. On the other hand, those with permanent residency who stay in Korea as long as two years can be rejected for re-entry to the U.S., and also their permanent residency can be cancelled. This encourages Korean seniors to obtain citizenship.
Meanwhile, some high-income Korean-Americans might be motivated to renounce their right to live in the United States to avoid taxation of their Korean properties under the Report of Foreign Bank and Financial Accounts rules, reported the Korea Daily in another article, excerpted and translated below.
As enforcement of FBAR is tightened, many Korean-Americans are giving up their U.S. citizenship or permanent U.S. residency.
From next year, foreign banking institutions must report bank accounts and other financial assets of American taxpayers to the Internal Revenue Service. As concealing foreign financial assets becomes more difficult, some Korean retirees have given up their citizenships or permanent residencies, to avoid high taxes and penalties.
“The biggest issue of Korean-Americans who recently have visited accounting firms is FBAR,” said Kyunglim Lee, the representative of Hanmi USA LLP., an accounting firm in Manhattan. “Nine out of 10 people, asked how much their fine, taxes and interest would be, and asked about citizenship or permanent residency renunciations. And in actuality, many of them go back to Korea.”