Korea Company Incorporation: A Complete Guide to Starting Your Business in South Korea

South Korea’s extensive network of free trade agreements (FTAs) offers businesses exceptional access to major global markets. Spanning countries across Asia, Europe, and the Americas, these agreements provide reduced tariffs and simplified trade procedures for companies operating in South Korea. This comprehensive trade connectivity enables businesses to scale efficiently and compete on the global stage.

Taxation Overview

Businesses in South Korea are required to comply with local tax regulations. Domestic companies are taxed on their worldwide income, while foreign entities, such as branch offices, are taxed solely on income generated within South Korea. All companies must submit annual audited tax returns.

Corporate tax rates vary based on company profits, starting at 10% for earnings up to KRW 200 million and reaching 25% for profits exceeding KRW 300 billion. To encourage foreign investment, the South Korean government provides a variety of incentives, including financial support, tax exemptions, and streamlined immigration processes, simplifying the process of establishing a business.

Employment and Visa Options

Foreign workers in South Korea generally fall into two categories: migrant workers holding E-9 visas, typically employed in sectors like manufacturing and construction, and skilled professionals with E1–E7 visas, working in areas such as education, research, and specialized industries.

The E-9 visa facilitates the hiring of non-professional workers under the Employment Permit System, while the H-2 visa allows overseas Koreans similar employment opportunities. This system supports a balanced labor market while safeguarding local jobs.

Key visa options for foreign investors and skilled professionals include:

• D-7 (Intra-company Transfer) Visa: For employees transferring to a Korean branch after at least one year with a foreign company.
• D-8 (Corporate Investor) Visa: Issued to individuals investing a minimum of KRW 100 million in a South Korean company. Establishing a local corporation, which typically takes two weeks, is required.
• E-7 (Special Ability) Visa: For professionals with specialized skills. Applicants must possess either a relevant bachelor’s degree with professional experience or a minimum of five years of field-specific work experience. For E-7 visa holders, companies are generally required to employ at least five Korean nationals, though exceptions may apply in industries such as IT.

Key Considerations for Business Incorporation

When establishing a business in South Korea, selecting the appropriate corporate structure is essential, including determining the number of shareholders and directors. While there is no mandatory minimum capital requirement, entrepreneurs should account for registration fees and initial capital deposits in a local bank. The incorporation process typically takes approximately two weeks to complete.

Despite challenges such as limited natural resources and high population density, South Korea stands as one of the world’s leading economies, ranking 15th by nominal GDP and 12th by purchasing power parity (PPP). As a prominent exporter and importer, the country provides an attractive environment for international investors.

Conclusion

South Korea offers significant opportunities for foreign investors, supported by its stable and vibrant economy. A thorough understanding of corporate tax and employment regulations is crucial for success. The government’s pro-investment policies, including tax incentives and simplified processes, further enhance South Korea’s appeal as a global business hub.

Contact us today for expert assistance in establishing your business in South Korea. From initial consultations to ensuring compliance and registration, our team is here to make your business setup seamless and efficient.