How to Start a Restaurant in South Korea: Korea Business Setup Guide for Food Entrepreneurs

Embarking on a restaurant venture in South Korea is the beginning of a thrilling culinary journey in a country celebrated for its rich and diverse food culture. With a dining landscape that embraces both traditional Korean tastes and international cuisines, South Korea presents an exciting market for food entrepreneurs. This guide outlines the key steps and insights essential for launching your restaurant, from understanding local tastes to managing the necessary permits.

1. Choosing the Right Business Structure

Selecting the right business structure is crucial. Most restaurant owners in South Korea opt for either a Limited Liability Company (LLC) or a Joint Stock Company (JSC).

• LLC (Yuhan Hoesa): Best suited for small to medium-sized businesses, an LLC offers a flexible legal framework while limiting personal liability for company debts. It’s easier to manage as it doesn’t require a board of directors, though it does require at least one investor.
• JSC (Chusik Hoesa): More appropriate for larger ventures, a JSC requires at least three investors and includes a board of directors, facilitating share transfers and attracting external investments.

Your choice between these structures will depend on your long-term goals, business scale, and need for external funding. Sole proprietorships or partnerships may be less appealing for foreign investors due to limitations on liability and ownership.

2. Securing a Company Name

Your business name must be unique, written in Korean characters, and comply with local regulations. Once chosen, submit the name to the Korean Intellectual Property Office (KIPO) for approval to reserve it during the incorporation process. Select a name that aligns with your brand and resonates with your target market.

3. Notifying Foreign Investment

Foreign investors must notify their investment through KOTRA or designated banks. Required documents include proof of nationality (such as a passport or corporate certificate) and a power-of-attorney if a proxy is used.

4. Transferring Investment Capital

Investment capital can be transferred to a local bank or brought in through customs. After transferring, it must be converted to Korean won and deposited in a designated account, with banks issuing a securities subscription deposit certificate necessary for registration.

5. Registering Incorporation and Business

Incorporation registration is required. Submit documents, like the articles of incorporation, to the local court registry or through the online i-one system. After incorporation, register your business at the tax office within 20 days, providing additional information about your restaurant.

6. Registering as a Foreign-Invested Company

Complete this step within 30 days of transferring investment capital by submitting documents like the foreign currency purchase certificate and shareholder ledger to obtain a foreign-invested company registration certificate. This certificate is essential for remittance of profits and visa applications.

7. Opening a Bank Account

Opening a business bank account is essential for managing transactions. Banks typically request your business registration certificate and proof of identity, so confirm their requirements in advance to make informed choices.

8. Registering with the Korea Tax Authority

To comply with South Korean tax laws, register your restaurant with the Korea Tax Authority by submitting details such as your business registration certificate, seal impression, and other identifying information.

9. Launching Your Business

Finally, you’re ready to welcome customers with high-quality food and excellent service. Continuously monitor customer feedback and business performance to foster long-term success.

Conclusion

Starting a restaurant in South Korea requires careful planning, from selecting a business structure and securing your company name to notifying foreign investment and fulfilling tax obligations. With South Korea’s dynamic food scene, the potential for success is substantial.

At Pearson & Partners Korea, we provide comprehensive support to help you navigate each step, from legal compliance to strategic planning, so you can focus on what truly matters—bringing your culinary vision to life in Korea.