Expanding into South Korea is an exciting step, offering access to one of Asia’s most advanced and opportunity-rich economies. But before hiring your first employee, you’ll need to decide how to establish a presence:
Should you set up a local legal entity (such as an LLC or JSC) or work with an Employer of Record (EOR)?
Both approaches are valid, and many companies even use them together, starting with EOR to enter quickly and later incorporating once they’re ready for long-term operations.
1. Speed to Market
- EOR: Hiring can begin in 2–4 weeks, since there’s no need for entity registration.
- Local Entity: Incorporation takes around 2 months with capital deposits, notarization, and filings.
Best for: Companies that want to test the market or hire quickly.
2. Compliance and Risk
- EOR: The EOR is the official employer, managing payroll, benefits, and labor law compliance.
- Local Entity: You assume direct responsibility for HR, tax filings, and compliance.
Best for: Businesses new to Korea or without in-house compliance teams.
3. Costs and Overhead
- EOR: Service-based pricing, no incorporation fees, office leases, or director appointments.
- Local Entity: Requires an initial capital investment (usually ₩100 million for FDI recognition), incorporation fees, and ongoing compliance.
Best for: Smaller teams or market entry phases (EOR), while incorporation makes sense for larger or long-term operations.
4. Flexibility and Scalability
- EOR: Easy to scale up or down, ideal for pilot projects or hiring specialists.
- Local Entity: Offers more flexibility for raising capital, signing contracts, or expanding operations, but winding down requires formal closure.
Best for: EOR for agility; local entity for full-scale growth.
5. Market Perception and Credibility
- EOR: Compliant and practical, but sometimes seen as a transitional solution.
- Local Entity: Shows long-term commitment, credibility with partners, and eligibility for certain government programs.
Best for: Companies seeking visibility, partnerships, or public contracts.
Final Thoughts: A Flexible Path to Growth
There is no single “right” choice: EOR and incorporation both have important roles. Many foreign businesses start with an EOR to move quickly, and then set up a local entity once they are ready to invest further and expand operations.
At Pearson & Partners Korea, we support both approaches. Whether you want the speed and simplicity of EOR or the structure and credibility of full incorporation, our team helps you expand with clarity, compliance, and confidence.
Ready to explore your options?
Book a free consultation today and let us help you choose the strategy that best fits your goals.
For a complete overview, see our EOR in Korea – Complete 2025 Guide.
For inquiries about Singapore business registration, please click here.
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