Company Incorporation in Korea: Key Requirements and Step-by-Step Process

South Korea stands as Asia’s 4th largest economy and one of the top 10 economies globally, offering a stable, high-growth market for entrepreneurs and investors alike. As a global leader in AI, robotics, semiconductors, and 5G, the country provides an innovation-driven ecosystem, making it a prime destination for tech startups and forward-thinking businesses. Strategically positioned between China and Japan, South Korea acts as a gateway to Asia’s thriving markets, offering unparalleled opportunities for regional expansion. Whether you’re launching a startup or scaling your business, Korea’s cutting-edge infrastructure, strong economy, and business-friendly policies make it the perfect place to grow.

Key Requirements for Establishing a Company in Korea

Setting up a business in Korea requires completing several essential steps:

1. Capital Allocation
   Determine the initial capital based on your business’s legal structure and industry. Ensuring access to the necessary funds or a well-planned financing strategy is crucial.

2. Business Proposal
   Develop a detailed business proposal outlining your business model, market analysis, target customers, and financial forecasts. This document is vital for strategic planning and investor confidence.

3. Identification Documentation
   Prepare identification documents such as passports or identity cards for all involved individuals. Foreign nationals may need additional paperwork, including visas or Alien Registration Cards (ARCs).

4. Office Setup
   All companies in Korea must have a registered office, which can be a physical location or a virtual office providing an official business address and support services.

Business Structures in Korea

Foreign investors can choose from several business entity options when incorporating in Korea:

1. Limited Company
   The most common structure, offering shareholders limited liability.

2. General Partnership
   All partners share unlimited liability and are jointly responsible for debts. Ownership transfers require unanimous consent.

3. Limited Liability Partnership
   Partners can opt for limited or unlimited liability roles. Limited partners cannot participate in daily operations.

4. Joint Stock Company
   Shareholders’ liability is restricted to their capital contributions. Annual shareholder meetings are required.

5. Branch Office
   Operates under the parent company’s jurisdiction without being a separate legal entity but conducts business activities in Korea.

6. Representative Office
   Fully owned by a foreign company, this office is restricted to market research and promotional activities without engaging in sales.

Understanding these structures is essential for choosing the best fit for your business needs.

Process for Establishing a Limited Liability Company (LLC) in Korea

Foreign investors can follow these steps to incorporate an LLC in Korea:

1. Notify the Foreign Exchange Bank (FEB)
   Submit an investment notification and identity proof to an FEB branch.

2. Transfer Capital
   Deposit the required capital into a temporary account and obtain a bank certificate confirming the deposit.

3. Register the Company
   File incorporation documents with the Korean court, providing details on directors, auditors, and shareholders.

4. Register with the Tax Office
   Complete tax registration with the relevant authorities.

5. Open a Corporate Bank Account
   Transfer the capital from the temporary account to the company’s official bank account.

6. Register as an FDI Company
   File for Foreign Direct Investment (FDI) registration within 30 days of completing the capital deposit.

Conclusion

Successfully incorporating a company in Korea requires careful planning, regulatory compliance, and selecting the right business structure. With a clear understanding of legal and financial requirements, foreign investors can establish a strong presence in Korea’s dynamic economy.

Pearson & Partners Korea provides comprehensive support throughout the company incorporation process, ensuring smooth registration and compliance with local regulations. Contact us today for expert guidance tailored to your business needs.

today for expert guidance tailored to your business needs.