Which Korea Entity Fits Your Plan? A Decision Guide for Foreign Companies

Irene Kim

Last updated: October 2026

Short answer: Start from what you need to do in Korea, not from the entity list. If you will sell to Korean customers or move a founder to Korea, use a subsidiary with foreign-invested status. If you only need to hire one or two people, use an Employer of Record. If you are only researching, a liaison office or no entity at all is enough. A branch office suits a parent that wants to trade in Korea and accepts full liability.

This guide matches the most common situations to the right choice, then gives you five questions to confirm it.

Match Your Situation to an Entity

Your situation	Best fit	Why
Selling to Korean customers	Subsidiary (주식회사 or 유한회사)	Can invoice, liability stays in Korea
Moving a founder or executive to Korea	Subsidiary with foreign-invested status	Supports the D-8 investor visa
Raising money from Korean investors	주식회사	The only form that can issue and list shares
Wholly owned operating company, no local investors	유한회사 or small 주식회사	Lighter governance
Extending an existing business, parent accepts liability	Branch office	No separate company, can trade
Researching the market, no revenue	Liaison office or nothing yet	Low cost, no commercial activity allowed
Hiring one or two people to test demand	Employer of Record	No entity needed, fast to start
Regulated sector (finance, healthcare, telecoms)	Subsidiary, plus sector licence	Licences usually require a local entity

Five Questions That Decide It

1. Will you invoice Korean customers?

If yes, you need a subsidiary or a branch. A liaison office and an EOR cannot sell in Korea.

2. Is anyone moving to Korea?

If a founder or investor needs a D-8 visa, you need a subsidiary with registered foreign investment of at least KRW 100 million per foreign investor. A branch or liaison office cannot support a D-8.

3. Can the parent accept unlimited liability?

If not, rule out the branch and liaison office. A subsidiary keeps liability in Korea.

4. Will you raise money or list in Korea?

If yes, choose a 주식회사. If the parent will always own 100%, a 유한회사 is usually simpler.

5. How sure are you about Korea?

If you are still testing, an Employer of Record lets you hire first and set up a company later. Our comparison of EOR versus your own entity shows where the line falls.

What Each Choice Commits You To

Subsidiary: annual corporate tax filing, VAT, withholding, bookkeeping and an annual shareholders' meeting. From 2026, corporate tax is 10%, 20%, 22% or 25% by income bracket, plus local income tax.
Branch: Korean tax on Korean-source income and reporting to both Korean authorities and the parent.
Liaison office: must stay non-commercial, or it risks being taxed as a permanent establishment.
Employer of Record: a monthly service fee per employee, with no entity to maintain.

For a side-by-side legal comparison, see our guide to Korea business structures compared.

Mistakes We See Most Often

Choosing a liaison office, then starting to sell. This creates tax exposure the office was never set up for.
Choosing a branch, then needing a founder visa. The fix is a new subsidiary.
Setting up a company before knowing the market. An EOR would have been cheaper for the first year.
Sending capital before the foreign investment notification. This can cost you foreign-invested status.

Once You've Decided

When the choice is clear, the next step is Korea company registration. With Pearson, the Korean filings typically take about two weeks once your documents are ready.

How Pearson & Partners Korea Helps

Since 2017, Pearson & Partners Korea has helped more than 800 global businesses enter Korea. Our team includes certified public accountants, certified judicial scriveners (법무사), certified tax accountants (세무사) and certified labor attorneys (노무사). We work with you in English and Korean.

We offer both company setup and Employer of Record, so our advice is not tied to selling you one of them. Setup is handled fully remotely, including the corporate bank account, so you never need to travel to Korea.

Not sure which box you're in? Tell us your plan and we'll recommend a structure.

Contact us
Web: pearsonkorea.com/contactus
Phone: +82-2-6952-7579
Office: 30F Trade Tower, World Trade Center Seoul, 511 Yeongdong-daero, Gangnam-gu, Seoul 06164

Official sources: Invest KOREA and KOTRA for foreign investors, and the National Tax Service for tax.

Frequently Asked Questions

Which entity should a foreign company choose in Korea?
Most choose a subsidiary, as a 주식회사 or 유한회사. It can sell in Korea, keeps liability local and supports the D-8 visa.

Can a foreigner own 100% of a Korean company?
Yes, in most industries. Some regulated sectors limit foreign ownership.

Branch or subsidiary: which is better?
A subsidiary for most companies, because liability stays in Korea and it supports founder visas. A branch suits a parent that wants to trade without a separate company and accepts full liability.

Can I hire in Korea without an entity?
Yes, through an Employer of Record, which employs staff through its own Korean company.

Can I change my entity type later?
Not by amending it. Moving from a branch or liaison office to a subsidiary means registering a new company.

Do I need to visit Korea to set up an entity?
Not with Pearson. We handle registration and the corporate bank account remotely.