Nearly 85 percent of local firms established in tax havens are linked to the shipping industry, data showed Tuesday, raising concerns of excessive public distress over offshore local companies.
According to the data compiled by CEO Score, a corporate researcher, the country’s 16 business groups have established 281 companies in seven major tax havens, with 238 of them linked to the shipping industry.
It is widely accepted for a shipper to establish offshore special purpose companies, especially when the company bids to acquire or borrow vessels, as it allows the firm to hedge against financial risks and gather investments.
“While the public considers companies that establish offshore branches in tax havens to dodge taxes, they are actually obligated to pay their duties according to the South Korean law,” said Park Joo-geun, who heads CEO Score.
“It is unreasonable to consider all of offshore South Korean firms as tax evaders,” Park added. “The top priority should be placed on sorting out illegitimate entities and individuals.”
STX Group, a South Korean shipping conglomerate, held 94 special purpose companies in Panama, trailed by Hanjin Group with 79 firms and SK Group with 54 firms. (Yonhap News)
