Korea Business Registration: Comprehensive Guide for Foreign Entrepreneurs

How to Start a Business in South Korea: A Detailed Guide

Foreign individuals and companies alike can establish a business in South Korea. The type of business entity you choose will depend on your operational needs and compliance with local regulations. Certified Korean legal professionals typically manage the company formation and registration process to ensure accuracy and efficiency.

For foreigners without South Korean residency, there are four main business structure options:

1. Local Corporation

This is the most common business structure in South Korea and is available to both foreign and Korean investors. It does not have a minimum capital requirement and supports various business formats, including:

Joint Stock Company (주식회사 or Chusik Hoesa):

A preferred choice for foreign investors establishing subsidiaries, this structure allows for public share issuance. Shareholder liability is limited to their investment amount, and shares can be transferred with board approval. Companies under this structure must hold annual shareholder meetings and appoint a statutory auditor to oversee financial and managerial practices.

Limited Liability Company (유한회사 or Yuhan Hoesa):

A great option for smaller businesses, this structure can have up to 50 shareholders, with liability limited to their respective capital contributions. To establish a Limited Liability Company, you need at least one director, one shareholder (of any nationality), a registered office, and no minimum paid-up capital.

2. Foreign Direct Investment (FDI) Company

Foreign businesses and individuals can establish an FDI company, which is a local corporation that requires a minimum capital investment of 100 million KRW. FDI companies enjoy specific legal advantages depending on their business activities, differentiating them from standard domestic corporations.

3. Branch Office

A Branch Office operates as an extension of its foreign parent company and is legally considered part of the headquarters. Unlike Liaison Offices, Branch Offices can engage in profit-generating activities in South Korea and are subject to local tax regulations.

4. Liaison Office

Linked to a foreign parent company, a Liaison Office is restricted to non-commercial activities such as conducting market research or promotional efforts. While it cannot generate revenue, it must still register with the tax authorities. This setup is ideal for businesses seeking to establish a foothold in South Korea before launching full-scale operations.

Conclusion

Pearson & Partners Korea offers end-to-end support for foreign businesses looking to incorporate in South Korea. From selecting the right business entity to completing the setup process, we provide tailored services to meet your needs. Our expertise includes:

• Document preparation and notarization
• Certified translations
• Power of attorney services
• Assistance with bank account setup
• VAT registration
• Visa support for foreign executives

Whether you’re planning to expand your operations or launch a new venture, Pearson & Partners Korea is here to help you succeed in South Korea’s vibrant market. Contact us today to get started!