SK Hynix Is Coming to Nasdaq (SKHY): Should Taiwan Investors Buy the ADR or the Korean Shares?

On June 24, 2026, the board of HBM memory leader SK Hynix approved an American Depositary Receipt (ADR) program and filed a Form F-1 with the SEC the same day (amended June 30). The Nasdaq listing under ticker SKHY is expected as early as July 10, with each common share split into 10 ADR units. The offering is a new-share capital raise of up to USD 29B; at full size it would surpass Alibaba's 2014 deal as the largest ADR offering in history (final terms and timing subject to the company's official announcements).

Until now, US investors who wanted SK Hynix exposure were mostly limited to unsponsored ADRs trading over the counter with weak liquidity. Buying the Korean shares through a broker was possible, but time zones and currency conversion made it far less convenient and liquid than a stock trading on a main US exchange. This time it is a formal US exchange listing. For Taiwan investors, it is the first chance to buy a listed, liquid SK Hynix ADR on an exchange. So the question: buy the ADR, or buy the Korean shares (000660.KS) through a Taiwan sub-brokerage account? Does the tax bill differ?

The analytical tool is exactly the one I used in the TSM ADR piece: run the issuer test first. SK Hynix is a Korean company; the ADR is just a different form of ownership, and the fact that the issuer is Korean determines the final tax outcome. But this case comes with one advantage the TSMC case did not have: the Taiwan-Korea tax treaty is already in force, and most people do not know it.

Dividend withholding: treaty 10% vs statutory 22%

Korea's standard withholding rate on dividends paid to non-residents is 22%. The Taiwan-Korea tax treaty entered into force on December 27, 2023 and applies from January 1, 2024, cutting the dividend withholding rate to 10%. It is Taiwan's 35th income tax treaty in force.

For a Taiwan investor collecting SK Hynix dividends, the withholding differs by path:

• Korean shares via sub-brokerage: Korea uses an advance-application system; beneficial-owner documentation must be submitted through your broker and its Korean custodian. Whether you end up at 10% or 22% depends on how cooperative your broker's operations are, so ask before you place the order.
• SKHY ADR: the dividend flows from SK Hynix to the depositary bank and is then passed on to your account at the US broker. Because it is first paid to the depositary, in practice it gets withheld at the standard 22% rate. US brokers generally handle only US tax documentation (the W-8BEN is for US tax purposes and has nothing to do with Korea) and will not claim the Taiwan-Korea treaty rate for you. In theory you can file a refund claim with Korea afterwards, but for a retail investor the time and paperwork involved usually mean the refund is simply abandoned.

On the US side, when SK Hynix dividends are paid on to Taiwan investors, there is no US withholding, because the dividends are not US-source income. This differs from dividends on ordinary US company stock (withheld at 30%).

Capital gains tax

• Korea: a foreign investor selling listed shares on a Korean exchange pays no Korean income tax, as long as the holding stayed below 25% at all times during the year of sale and the preceding five years. Retail investors trading Korean shares through a sub-brokerage account meet this condition. Trading the SK Hynix ADR on Nasdaq is generally outside Korea's taxing scope as well.
• Taiwan: whether you buy SK Hynix on the Korean market or the ADR on Nasdaq, the gain counts as overseas income for a Taiwan investor and goes into the individual basic income computation (Taiwan's alternative minimum tax). I unpack the myth of the "NT$7.5 million overseas income exemption" in a separate piece (in Chinese).

One often-overlooked transaction cost: selling shares on the Korean exchange incurs securities transaction tax, and from January 1, 2026 the rate on sales of KOSPI-listed stock rose to 0.20%. Selling the ADR on Nasdaq carries no such tax.

Estate tax

United States: as with the TSM ADR, SKHY represents shares of a Korean company. Under the prevailing view it is not treated as a US-situs asset and does not count toward the US estate tax (foreign investors do face the USD 60,000 exemption issue; see the full US estate tax guide).

Korea: this is what many people miss. Korea levies inheritance tax on a non-resident's Korean-situs assets, and shares of Korean companies are Korean-situs property. The current top rate is 50%, and the deductions available to non-residents are far smaller than those for residents. In other words:

• Korean shares held directly via sub-brokerage (000660.KS): within the scope of Korean inheritance tax.
• SK Hynix ADR (SKHY) held on Nasdaq: the shares the ADR represents are Korean shares, and Korean tax law does not explicitly classify ADRs as offshore assets, so the treatment is uncertain. Do not simply assume the ADR is exempt from Korean inheritance tax.
• Taiwan: a Taiwan person's worldwide estate is subject to Taiwan estate tax, with a credit for estate tax already paid abroad. But Korea's top rate of 50% far exceeds Taiwan's top rate of 20%, and the excess credit is not refundable, so the effective burden can run as high as 50%.

Simply put: for large positions, long holding periods, or anyone with wealth-transfer considerations, holding Korean stock (whether the Korean shares directly or a Korean-company ADR) calls for more advance estate tax planning than US stock does. Korea has been debating inheritance tax reform that would lower the rates, but the amendments have not yet passed; worth watching.

The comparison table

Conclusions

1. Small Korean position, convenience first, and you want everything at the same broker as your other US stock positions: the ADR is the first choice; the dividend withholding difference barely matters on a low-yield stock.
2. You care about dividend withholding and your broker will process the treaty application: the sub-brokerage route to the Korean shares can cut withholding from 22% to 10%.
3. Large Korean position or wealth-transfer considerations: plan ahead for Korean inheritance tax of up to 50%.