How to Register Your Business in South Korea: A Complete Guide to Company Setup

Expanding your business into South Korea presents a lucrative opportunity but requires navigating a well-defined set of legal and procedural steps. This guide provides a detailed overview of the essential processes and requirements for setting up a company in South Korea, aimed at foreign investors.

Overview of the Company Setup Process

Setting up a business in South Korea involves several key steps:

1. Foreign Investment Notification
2. Transfer of Investment Funds
3. Corporate Registration
4. Obtaining Necessary Permits
5. Corporate Registration and Business License
6. Opening a Corporate Bank Account
7. Foreign-Invested Company Registration

Foreign Investment Notification

• Notification Location: Foreign Exchange Bank
• Processing Time: Immediate

Transfer of Investment Funds

• Transfer Locations: Foreign Exchange Bank or through Customs (for physical money transfer)
• Processing Time: 2-3 days

Corporate Registration

• Registration Office: District Court Registry Office
• Processing Time: 2-3 days

Obtaining Necessary Permits

• Permits Required: Depending on the business type, permits may be needed from various authorities.

Corporate Registration and Business License

• Registration Office: Local Tax Office
• Processing Time: 4-5 days

Opening a Corporate Bank Account

• Bank: Foreign Exchange Bank
• Processing Time: Immediate

Foreign-Invested Company Registration

• Registration Office: Initial Notification Agency (KOTRA or Foreign Exchange Bank)
• Processing Time: Immediate

Relevant Regulations

• Foreign Investment Promotion Act: Articles 5 and 21
• Enforcement Decree of the Foreign Investment Promotion Act: Articles 6 and 27
• Enforcement Rules of the Foreign Investment Promotion Act: Articles 2 and 17

Detailed Steps for Foreign Investment Notification

• Notification Office: Foreign Exchange Bank
• Required Documents:
  • Two copies of the notification form
  • Application form for foreign investment (Form No. 1 of the Enforcement Rules of the Foreign Investment Promotion Act)
  • Proof of nationality of the foreign investor (passport for individuals, business registration certificate for corporations)
  • Evidence for non-cash contributions (if applicable)
  • Authorization and identification of the agent (if applicable)

Technical Evaluation

• Required Documents for Technical Contribution: Proof of value assessment for industrial property rights, etc.
• Evaluating Institutions: Korea Industrial Technology Association, Technology Credit Guarantee Fund, Korea Technology and Information Promotion Agency for SMEs, Korea Environment Corporation, National Institute of Technology and Standards, Korea Institute of Science and Technology, Korea Institute of Science and Technology Information, Information and Communication Industry Promotion Agency.
• Relevant Regulations: Article 30(4) of the Foreign Investment Promotion Act, Article 39(2) of its Enforcement Decree, and Article 4 of the Enforcement Decree of the Act on Special Measures for the Promotion of Venture Businesses

Transfer of Investment Funds

• Methods: Transfer funds to a temporary account at a domestic foreign exchange bank or bring cash directly to customs.
• Required Documents: Declare the foreign currency at customs and obtain a "Certificate of Foreign Exchange Transactions."
• Fund Management: After transferring the investment funds, submit a certificate of deposit to the court.

Opening a Temporary Account

• Required Documents: Proof of nationality (certificate of entity or passport)
• Notes: The required documents may vary by financial institution. Funds must be transferred in foreign currency, and the transfer purpose should be stated as an investment.

Corporate Registration

• Registration Office: District Court Registry Office
• Processing Time: 2-3 business days
• Required Documents: Refer to the application forms and list of required documents on the Supreme Court Internet Registry.

Obtaining Necessary Permits

• Permits Required: Obtain necessary permits from relevant institutions (e.g., district office, public health center, Ministry of Food and Drug Safety) depending on the type and nature of the business.
• Processing Time: Varies based on the type and nature of the permit.

Corporate Registration and Business License

• Registration Office: Any tax office nationwide
• Processing Time: 3 days

Opening a Corporate Bank Account

• Bank: Foreign Exchange Bank
• Processing Time: Immediate
• Notes: Once an account is opened, new accounts at other banks cannot be opened for 20 business days.

Foreign-Invested Company Registration

• Registration Office: Initial Notification Agency (KOTRA or Foreign Exchange Bank)
• Required Documents:
  • One copy of the application form
  • Certificate of full registration details
  • Proof of purchase of foreign exchange
  • List of shareholders
  • Copy of business registration certificate
  • Authorization and identification of the agent (if applicable)

Conclusion

Expanding a business into South Korea presents a range of opportunities but requires a detailed understanding of the regulatory framework and procedural steps. The process involves several stages, from foreign investment notification and transfer of investment funds to corporate registration and obtaining necessary permits. Adherence to the relevant regulations and proper documentation is crucial for a smooth setup. This guide outlines the essential steps and requirements to assist foreign investors in navigating the complexities of establishing a company in South Korea.

Pearson & Partners, a consulting firm specializing in aiding expansion into Korea, provides incorporation and tax accounting services. With expertise in navigating South Korea's business landscape, they ensure compliance with all legal requirements and facilitate a seamless incorporation process. Whether you need assistance with investment notifications, fund transfers, or corporate registration, Pearson & Partners can provide the necessary support. Contact us.