Complete Guide to Korea Business Registration: Taxation, Visas, and Setup

Beyond Business: The Allure of South Korea

South Korea not only boasts significant business advantages but also offers an exceptional quality of life, rich cultural heritage, and world-class healthcare and education systems. These factors make it a prime destination for expatriates and their families, simplifying the relocation of international teams. Furthermore, the nation’s global cultural influence—propelled by the Korean Wave (Hallyu)—enhances its reputation as both a business and lifestyle hub.

Taxation in South Korea: An Overview

Companies operating in South Korea must comply with the country's tax regulations. Domestic businesses are subject to taxes on their global income, while foreign entities, such as branch offices, are taxed solely on income generated within South Korea. Annual submission of audited tax returns is mandatory for all businesses.

Corporate tax rates vary based on earnings, starting at 10% for profits up to KRW 200 million and rising to 25% for profits exceeding KRW 300 billion. To attract foreign investment, the South Korean government offers an array of incentives, including financial support, tax exemptions, and streamlined immigration procedures, simplifying the process of establishing and running businesses in the country.

Employment and Visa Options in South Korea

Foreign workers in South Korea fall into two primary categories:

1. Migrant Workers (E-9 visas): Commonly employed in sectors like manufacturing and construction.
2. Skilled Professionals (E1–E7 visas): Working in fields such as education, research, and specialized industries.

The E-9 visa, part of the Employment Permit System, supports non-professional workers while safeguarding local employment opportunities. Meanwhile, the H-2 visa grants overseas Koreans access to comparable work opportunities.

Key visas for foreign investors and skilled professionals include:

• D-7 (Intra-company Transfer) Visa: Designed for employees transferring to a Korean branch after at least one year with a foreign company.
• D-8 (Corporate Investor) Visa: Available to those investing a minimum of KRW 100 million in a South Korean company, requiring the establishment of a local corporation—a process typically completed within two weeks.
• E-7 (Special Ability) Visa: For professionals with specialized expertise. Applicants must have either a relevant bachelor's degree and experience or at least five years of field expertise. Companies employing E-7 visa holders generally need to hire at least five Korean nationals, although exceptions exist for certain industries like IT.

Critical Factors for Business Establishment

Selecting an appropriate corporate structure is crucial when starting a business in South Korea. Key considerations include the number of shareholders and directors. Although there is no minimum capital requirement, entrepreneurs should plan for registration fees and an initial deposit at a local bank. The incorporation process typically takes about two weeks.

Despite challenges such as limited natural resources and high population density, South Korea remains a global economic leader. Ranked 15th in nominal GDP and 12th in purchasing power parity (PPP), the country stands out as a major player in international trade and a compelling destination for foreign investors.

Conclusion

With its stable and dynamic economy, South Korea offers numerous opportunities for foreign investors. A solid understanding of corporate tax and employment laws is key to achieving success. Combined with the government’s investment-friendly policies, including tax incentives and simplified procedures, South Korea emerges as an ideal location for global business ventures.

Reach out to us for expert assistance in setting up your business in South Korea. From strategy consultations to compliance and registration, our team ensures a seamless and efficient process.