How to Collect Korean Dividends as a Foreign Investor

A Korean dividend reaches a foreign shareholder in four steps: the company decides it, a record date fixes who gets it, the company pays it, and Korea withholds tax on the way out. Each step has its own statute, and each one has tripped up investors who assumed Korea works like New York or London. For years the order of the first two steps was backwards. Most companies fixed the shareholder list on December 31 and only told you the dividend in March. A 2023 reform lets companies flip that order, but it’s optional, so you still have to check which order your company uses. And the tax at the end depends on how your shares are held as much as on where you live. This guide walks through the chain and links to the detailed posts for each step.

Key Takeaways

• Shareholders usually approve the dividend. Korea’s Commercial Act gives the decision to the general meeting, unless the articles let the board approve the financial statements and the auditors and audit committee sign off.
• The record date decides who gets paid. It must fall within three months before shareholders exercise the right, which is why year-end record dates and March meetings went together for decades.
• You can now see the amount before the record date at companies that have switched. The January 31, 2023, reform by the Financial Services Commission and the Ministry of Justice lets companies set the dividend first and the record date after, but each company has to change its articles to use it.
• Payment is due within a month of the decision. The Commercial Act sets one month from the resolution unless the meeting or board picks another date.
• The default withholding is 22%. A treaty can lower it to 16.5% for US residents and 15% for Canadian residents, but only with proof of residence. An omnibus account withholds 22% first and leaves you to claim the difference.

Contents

1. The four steps at a glance
2. Step 1: Who decides the dividend
3. Step 2: the record date
4. Buying in time for the record date
5. Step 3: when the money is paid
6. Interim and quarterly dividends
7. Step 4: what Korea withholds
8. Where to see the decision
9. Frequently asked questions

1. The four steps at a glance

Step	Who acts	The rule	Where it’s written
Decision	General meeting, or the board if the articles allow	Dividend set by resolution	Commercial Act, Article 462(2)
Record date	The company	Holders on the register that day get paid; the date must be within three months before the right is exercised.	Commercial Act, Article 354
Payment	The company	Within one month of the resolution, unless another date is set	Commercial Act, Article 464-2
Withholding	The payer	22%, or a treaty rate with proof of residence	Income tax rules and the relevant treaty

The order of the first two rows is the part that changed. The Commercial Act doesn’t say which comes first. Practice did, and practice was the problem.

2. Step 1: Who decides the dividend?

Under Article 462(2) of the Commercial Act, the general meeting of shareholders decides the dividend. There’s one exception. If a company’s articles let the board approve the annual financial statements, the board decides the dividend too. Article 449-2 attaches two conditions to that board route: the outside auditor must give its opinion that the statements fairly present the company’s position, and every member of the audit committee (or every statutory auditor) must agree.

What that means in practice: for most companies, the dividend you’ll get is a number the board proposes and the March meeting approves. A board can announce its proposal earlier, and many do, but the filing that announces it carries a caveat that the figure can still change through the audit and the shareholder vote.

Dividends are paid in proportion to the shares each holder owns (Article 464). Preferred shares can carry different terms, which is why a Korean company’s dividend announcement lists common and preferred amounts separately.

3. Step 2: the record date

Article 354 of the Commercial Act lets a company treat whoever is on the shareholder register on a set day as the person entitled to vote or receive a dividend. Two limits matter. The day has to fall within three months before the date the right is exercised, and the company has to announce it two weeks in advance, unless the articles already fix the date.

Here’s the part that explains the old Korean calendar. A company with a December year-end held its annual meeting in March. To let shareholders on the December 31 register vote at that meeting, the record date had to be December 31 or later, and three months back from late March lands at the end of December. So voting and dividends shared one record date, set at year-end, before anyone knew the dividend.

The Financial Services Commission described it plainly on January 31, 2023: most Korean companies fixed the shareholders who would receive a dividend at year-end and confirmed the amount at the meeting the following spring, so investors bought without knowing what they’d be paid. The FSC also noted that overseas investors had called Korean dividend investing a “blind” bet and kept asking for change.

An old KB Financial Group filing shows the sequence. In its dividend decision of February 7, 2014, the record date was December 31, 2013, the board resolution was February 7, 2014, and the shareholders’ meeting was set for March 28, 2014. The record date came five weeks before the number.

The 2023 reform didn’t rewrite Article 354. The Ministry of Justice interpreted it so that a company can set a voting record date for the meeting and a separate dividend record date after the meeting decides the amount. Companies opt in by amending their articles, and the FSC said the first year-end dividends under the new order could come in 2024, for fiscal 2023. Read that as a menu, not a mandate. Some companies have switched and others haven’t, so a December 31 record date is still possible. Our guide to the dividend record date after 2023 shows how to tell which order a company uses.

4. Buying in time for the record date

Korean stock trades settle two business days after the trade (T+2), according to the Korea Exchange’s trading guide. The register on the record date shows trades that have settled by then. So to be on it, you’ll generally need to buy at least two trading days before the record date. A purchase on the record date itself, or the day before, won’t settle in time.

Holidays shift the count, and brokers publish the cut-off for each payout, so check yours before you rely on the arithmetic. Korea has said it wants to move to T+1 settlement; as of October 24, 2026 I haven’t seen a launch date, and T+2 is still the rule. Our settlement explainer covers the cycle in more detail.

The reverse also holds. If you sell after the record date, you keep the dividend even though you don’t own the shares when it’s paid.

5. Step 3: when the money is paid

Article 464-2 gives the company one month from the resolution to pay, whether the resolution came from the meeting, the board, or an interim board decision. The meeting or the board can set a different payment date instead. KB Financial’s 2014 filing put it simply: the dividend would be paid within one month of shareholder approval, as the Commercial Act requires.

For a March meeting, that usually means an April payment. You’ll get the money through your broker or custodian in won. If you never claim a dividend, the right to it expires after five years (Article 464-2(2)), which mostly matters for shares held in old paper form or forgotten accounts.

6. Interim and quarterly dividends

Korean dividends aren’t all year-end dividends. Two other routes exist.

Interim dividends. Article 462-3 lets a company with one fiscal year-end pay one interim dividend during the year by board resolution if its articles allow it.

Quarterly dividends for listed companies. Article 165-12 of the Financial Investment Services and Capital Markets Act lets a listed company with one fiscal year-end pay cash dividends after the end of March, June, and September. The board has to decide within 45 days of each quarter’s end, and the company has to pay within one month of that board decision, unless the articles or the board set another date.

That quarterly rule changed on January 21, 2025. The amendment removed the wording that fixed the record date at the end of March, June, and September, and it took effect on the day it was promulgated. A listed company can now announce a quarterly dividend and set the record date afterward, the same order the 2023 reform opened for year-end dividends.

For a foreign holder, this is where Korean dividends start to resemble US ones: a board declares, a record date follows, and payment comes a few weeks later. Whether your company works that way isn’t set by the statute; it’s in the articles.

7. Step 4: What Korea withholds

The default Korean withholding on a dividend paid to a non-resident is 22%: a 20% national rate plus a local surtax of one-tenth of that, according to Clearstream’s Korea treaty table. A tax treaty can lower it, but only if proof of residence reaches the payer before or at payment. Without it, the payer withholds the normal rate, as SK Hynix’s 2026 US prospectus spells out.

Your situation	Korean withholding	Where it comes from
No treaty claim on file	22%	Default rate, local tax included
US resident, portfolio holding	16.5%	Treaty’s 15% plus local tax, per KB Financial’s 2026 annual report
Canadian resident, portfolio holding	15%	Treaty rate, which already covers local tax
Shares held through an omnibus account	22% withheld first	The treaty rate comes back only by a later refund claim

Two details catch people. The US figure is 16.5%, not 15%: the treaty caps Korea’s national tax at 15%, and the local surtax comes on top, which is how KB Financial’s 2026 annual report states it. Canada’s 15% is the full amount because that treaty covers the local tax too.

The second detail is the account structure. If your foreign broker reaches Korea through an omnibus account, Article 156-9 of Korea’s Income Tax Act has the payer withhold at the general non-resident rate, and you claim the treaty rate afterward from the Korean tax office. That rule was added on December 31, 2023, and has applied to payments made since January 1, 2024. Our posts on the omnibus account, on withholding and treaty claims, and on buying from Canada and the US cover each case.

You may also have read that Korea cut its dividend tax. The cut is real, but it’s written for residents. Article 104-27 of the Restriction of Special Taxation Act, added on December 23, 2025 and in force from January 1, 2026, lets a resident who holds a qualifying high-dividend company keep those dividends out of comprehensive income taxation. The text says “resident,” and nothing in it changes the 22% or treaty rates withheld from foreign shareholders. Our piece on the 2026 dividend tax cut explains why, and where the cut still reaches your returns.

8. Where to see the decision

Every step above leaves a filing on DART, Korea’s counterpart to SEC EDGAR, run by the Financial Supervisory Service at dart.fss.or.kr. The one you want is the cash and in-kind dividend decision. KB Financial’s 2014 version lists the fields you’ll see in most of them: whether it’s a year-end or interim dividend, cash or in kind, the amount per common and preferred share, the dividend yield at market price, the total payout, the record date, the expected payment date, whether a shareholder meeting is needed, and the board resolution date.

Read the record date and the board date side by side. If the record date comes after the board date, the company is using the new order and you know the proposed amount before you buy. Unless the articles let the board approve the financial statements, the shareholder meeting still has to approve it. If it comes before, you’re buying on an estimate. Our guide to the disclosure system explains how DART filings are organized, and the Value-Up disclosure post covers the plans some companies publish about future payouts.

9. Frequently asked questions

Do I have to own the shares on the payment date?

No. You need to be on the register on the record date. Selling afterward doesn’t cost you the dividend.

Why did Korean companies set the record date before the dividend amount?

Because voting and dividends shared one record date, and the record date had to fall within three months before the March meeting. The 2023 reform lets companies separate the two dates.

Does every Korean company now announce the dividend first?

No. The new order is optional and requires a change to the articles. Check the record date and board date on the company’s dividend decision filing.

How much tax does Korea take from my dividend?

22% by default. With proof of residence, a treaty rate applies instead, such as 16.5% for US residents or 15% for Canadian residents. Through an omnibus account, 22% is withheld first and you claim the rest back.

Does Korea’s 2026 dividend tax cut apply to foreign investors?

The statute is written for residents. It doesn’t change the withholding rates for non-residents.

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Disclaimer: This article is for general informational purposes only and does not constitute investment, legal or tax advice. It describes Korean statutes, regulator announcements and company filings as published on the dates cited, as of October 24, 2026. Tax treatment depends on your own circumstances and can change. Confirm your position with your broker or a qualified tax professional before you act.

Last updated: November 1, 2026