Anchor: The government says it’s rolling out tax breaks for the country’s influential community of individual investors, or retail investors, to entice them to sell overseas stocks and reinvest domestically. The move aims to stabilize the South Korean won and generate economic growth.
Rosyn Park has more.

Report: On Wednesday the Ministry of Strategy and Finance announced a package of tax benefits with the broad goal of stabilizing the foreign exchange(FX) market.

Under the measures, individual investors who shift their existing holdings of foreign stocks, held through Tuesday, into long-term investments in domestic stocks will be temporarily granted capital gains tax relief for one year.

The government is banking on the tax breaks to encourage individual investors to bring their money back to the domestic market and help correct structural imbalances in supply and demand for U.S. dollars.

During a press briefing, Deputy Finance Minister Choi Ji-young said that before 2020, individual investors accounted for less than ten percent of overseas equity investment by South Koreans, but now they account for more than 30 percent.

Additionally, the ministry said major brokerage firms will offer retail-oriented forward-exchange products, including tax incentives for currency hedging on overseas stocks. 

This will allow individual investors to reduce the risk of exchange rate fluctuations, while also increasing the supply of dollars in the FX market.

The package also expands tax support for dividend inflows from overseas subsidiaries of South Korean companies to 100 percent from the current 95 percent as an incentive to draw even more foreign currency into the country.
Rosyn Park, KBS World Radio News.