On January 26, it was confirmed that Ganghwa officials had received a formal complaint and launched a probe into Company B, a limited liability company where Cha Eun Woo serves as an executive and his mother as CEO. The complaint raises suspicions that the firm may have functioned as a “paper company” and failed to properly register as a business in the field of popular culture and arts from 2019 to 2022, while also neglecting to update its official business address.
Under South Korean law, failing to register address changes or operating without proper business licenses can result in suspensions, fines up to ₩50 million, or even criminal prosecution. The complaint emphasizes that entertainers, due to their societal influence, should uphold the highest legal standards, drawing comparisons to public figures like Yoo Jae-suk, who is often praised for his model tax ethics.
Cha Eun Woo and his mother are accused of operating Company B—a one-person agency turned LLC—from a registered address that allegedly corresponds to an eel restaurant run by the family in Ganghwa. The company’s change to an LLC structure and relocation to Ganghwa, an area considered a “tax haven” due to reduced property acquisition taxes under the Capital Region Readjustment Planning Act, has raised red flags. Moreover, the firm allegedly added “real estate leasing and trading” to its business scope, suggesting a possible tax reduction strategy.
Experts suspect the transformation from a corporation to an LLC was aimed at avoiding external audits and facilitating tax evasion. Lawyer Noh Jong-eon explained that shifting company forms to dodge financial disclosure obligations is a tactic often used to circumvent tax investigations and reduce visibility on regulatory platforms like the Financial Supervisory Service’s disclosure system.
Adding to the concerns, Cha Eun Woo’s mother reportedly established a second LLC (Company C) in December 2025, near the Ganghwa eel restaurant, this time registered in Gangnam, Seoul. The registration status of this new firm in the field of arts management is still unclear.
Based on these findings, the National Tax Service concluded that Cha Eun Woo diverted personal income through these family-run companies to benefit from a lower corporate tax rate instead of paying the maximum 45% income tax rate. This led to a ₩20 billion tax assessment, while his agency Fantagio was hit with an ₩8.2 billion fine for allegedly issuing false invoices.
Fantagio responded on January 22, stating, “The key issue is whether the corporation established by Cha Eun Woo’s mother is subject to actual taxation. The matter is not yet finalized, and we plan to actively clarify legal interpretations through proper procedures.”
Legal experts warn that using tax loopholes tied to regional benefits or family-run corporations can result in not just back taxes but also criminal charges under the Act on the Aggravated Punishment of Specific Economic Crimes, with potential penalties including imprisonment.
As the investigation unfolds, public discourse around “noblesse oblige”—the moral obligation of influential public figures—is intensifying, placing even greater pressure on celebrities to maintain financial transparency and legal compliance.
Sources: Daum
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