Korea Business Set Up: Optimize Expansion with LLC Structure

Considering the expansion of your business into South Korea, opting for the Limited Liability Company (LLC) structure provides an appealing pathway for market entry. The process of forming an LLC in Korea allows for establishing a presence without the complications of a local head office, offering a strategic means to navigate the intricacies of the South Korean jurisdiction. This approach empowers companies to ensure compliance and facilitate property development seamlessly. It's worth noting that the registration fees associated with setting up an LLC in Korea are intricately tied to the authorized share capital, adding a nuanced dimension to the establishment process.

Steps in Korea Business Set Up

1. Business Registration Declaration at the Bank (5 working days):

Initiating the formation of an LLC begins with declaring business registration at the bank. During this phase, companies inject the paid-up capital into the escrow account, laying a strong financial foundation for the LLC. This initial step, completed within five working days, marks the start of the intricate process of Korea business set up.

2. Compilation of Registration Documents (Ongoing):

With the financial groundwork laid, the subsequent crucial step involves compiling comprehensive registration documents. This multifaceted process includes gathering essential details about the company, its activities, and legal requirements. The ongoing nature of this phase highlights its complexity, necessitating meticulous attention to detail.

3. Submission to the Registry Office:

Once the registration documents are meticulously prepared, they are submitted to the Registry Office. This step stands as a critical juncture in the LLC formation process, serving as the interface between the company and regulatory authorities. The scrutiny of these documents ensures compliance with Korean business regulations.

4. Corporate Bank Account Opening and Online Business Banking (5 working days):

Following the capital injection, the subsequent phase involves opening a corporate bank account and engaging in online business banking. Concurrently, the Foreign-Invested company is registered with the Korea Bank. This dual process, concluded within five working days, establishes the LLC's financial infrastructure and aligns it with Korean banking regulations in the Korea business set up.

5. Acquisition of Tax Registration Number (2 working days):

Following the submission to the Registry Office, the final phase involves acquiring a tax registration number. Notably efficient, this step takes just two working days, showcasing the streamlined nature of South Korea's regulatory framework. The tax registration number stands as a crucial component for the LLC, facilitating its legal and financial operations in the Korea business set up.

Foreign Direct Investment (FDI) with 100 Million KRW Paid-Up Capital:

Foreign Direct Investment (FDI) pertains to the creation of a new corporation or the purchase of shares in an existing domestic company by a foreign corporation or individual, intending to establish and maintain continuous economic relations with domestic businesses. FDI involves establishing a new entity or acquiring shares in a domestic company by foreign entities or individuals, aiming to foster ongoing economic engagement.

Direct foreign investment is characterized by an investment amount exceeding 100 million KRW, with a foreign investment ratio surpassing 10%. In instances where foreign direct investment surpasses this threshold, foreign entities generally encounter fewer restrictions in pursuing business activities in the domestic market, unless specific regulations apply. This flexibility allows foreign investors to conduct business operations in South Korea with minimal limitations, fostering economic collaboration and growth.

Vital Paperwork for Korea Business Set Up

Application Form

• Business Name
• Paid-Up Capital
• Nature of Business Activities
• Lease Agreement for Business Location in Korea

The documentation essential for establishing an LLC in Korea is thorough, showcasing a commitment to regulatory compliance and transparency. The application form serves as a foundational document, capturing crucial information like the business name, paid-up capital, nature of business activities, and the lease agreement for the business location in Korea.

Director's Details

• Passport
• Address Verification
• Letter of Acceptance (provided by Pearson)
• Seal Impression (provided by Pearson)
• Board Resolution for Korea Company Registration (provided by Pearson)

Details of the director, including passport information, address verification, and documents supplied by Pearson & Partners, such as the Letter of Acceptance and Seal Impression, play a crucial role in the registration process. The Board Resolution, meticulously prepared by Pearson & Partners, further solidifies the intent to register the company in Korea.

Shareholder's Information

• Passport
• Address Verification
• Shareholders' Resolution for Korea Company Registration (provided by Pearson)

If Shareholder is a corporate entity:

• Certificate of Business Registration
• Memorandum of Articles and Association
• Shareholder List
• Passport of Corporate Shareholder's Representative

Shareholder information, encompassing passport details, address verification, and shareholder resolutions, emphasizes the collaborative aspect of the LLC formation. In scenarios where the shareholder is a corporate entity, additional documentation, including the Certificate of Business Registration, Memorandum of Articles and Association, and a list of shareholders, is crucial for a comprehensive Korea business set up process.

Conclusion

In summary, opting for the Limited Liability Company (LLC) structure proves to be a strategic choice for businesses contemplating expansion into South Korea. This approach provides a means for companies to establish a robust business presence in the Korean market without the intricacies of maintaining a local head office. The LLC formation process empowers businesses to navigate the complexities of South Korean jurisdiction, ensuring compliance with regulations while facilitating property development. The intricate relationship between registration fees and authorized share capital adds a layer of complexity to the establishment process, emphasizing the importance of meticulous financial planning.

Pearson & Partners, a consultancy specializing in facilitating expansions into Korea, offers comprehensive support throughout the Korea business set up journey. Beyond providing guidance, our services cover critical aspects such as incorporation and tax accounting. Navigating the intricacies of foreign business establishment is our forte. For expert advice on legal requirements, regulatory compliance, and strategic decision-making in South Korea, reach out to us.