Korea Company Incorporation: A Guide for Foreign Businesses in South Korea

For foreign individuals or entities without South Korean residency, there are four main options for establishing and registering a business in the country:

1. Local Corporation

This structure is available to both Korean citizens and foreign nationals, with no minimum capital requirement (unlike Foreign Direct Investment Companies). Local corporations can be set up under the following types:

• Joint Stock Company (주식회사)

  The Joint Stock Company (Chusik Hoesa) is a preferred choice for foreign investors, as it is the only Korean entity that can issue public shares. Shareholders have limited liability, and shares can be freely transferred with board approval. Annual general meetings are required, and a statutory auditor oversees the company’s management and finances.

• Limited Liability Company (유한회사)

  A Limited Liability Company (Yuhan Hoesa) is also popular and can have up to 50 shareholders, each with liability limited to their capital investment. Minimal setup requirements include at least one director, one shareholder of any nationality, no minimum paid-up capital, and a registered office address.

2. Foreign Direct Investment (FDI) Company

Foreign individuals or companies can register a local corporation as an FDI Company, with a minimum capital requirement of 100 million KRW. This setup offers certain benefits under Korean law based on the company's activities, which may not be available to standard local companies.

3. Branch Office

A Branch Office operates as an extension of its foreign parent company, treated legally as the same entity. It can engage in profit-generating activities and is subject to the same tax laws and rates as domestic Korean companies.

4. Liaison Office

A Liaison Office, classified as a foreign corporation, performs non-commercial functions such as market research and promotional activities. Although it cannot generate profits, it must register with the local tax office. It’s a practical option for foreign investors aiming to assess the South Korean market before launching full business operations.

Conclusion

Pearson & Partners Korea offers specialized assistance for establishing and incorporating foreign businesses in South Korea. Our end-to-end services help you choose the ideal registration structure and include document preparation, certification, translations, power of attorney, bank account setup, VAT registration, and visa application support for foreign managers.