Korea Company Setup: Step-by-Step Guide for Foreign Investors

Zion Shim

Government Incentives and Support for Foreign Investment

The South Korean government actively promotes foreign investment by offering a range of appealing incentives. These include tax exemptions and reductions for up to seven years, financial grants for job creation and R&D activities, and subsidized rental fees for office and industrial spaces. Additionally, the government has established Free Economic Zones (FEZs) and innovation hubs to simplify administrative processes, reduce regulatory burdens, and provide extra benefits to foreign enterprises. Programs such as KOREA INVESTMENT WEEK and Invest KOREA further demonstrate the government’s dedication to fostering a business-friendly environment.

Essential Steps for Business Incorporation in South Korea

Setting up a company in South Korea requires a structured approach and adherence to legal regulations. Below is a step-by-step guide to facilitate a seamless incorporation process:

1. Determine Capital Investment

Assess the required capital based on your business model and industry regulations. Ensuring sufficient funding or securing a well-structured financing plan is critical for long-term success.

2. Develop a Detailed Business Plan

Create a comprehensive business plan outlining your goals, market strategy, target audience, and financial projections. A solid plan not only attracts potential investors but also serves as a strategic guide for sustainable growth.

3. Prepare Legal Documentation

Gather the necessary paperwork, including identification documents (passports or ID cards) for all business participants. Foreign investors may also need additional documentation, such as visas or an Alien Registration Card (ARC), depending on their residency status.

4. Secure a Registered Business Address

All businesses in Korea must have a registered office address. This can be a physical location or a legally compliant virtual office offering essential administrative support.

Process for Establishing a Limited Liability Company (LLC) in Korea

Foreign investors looking to establish a Limited Liability Company (LLC) in Korea should follow these key steps:

1. Notify a Foreign Exchange Bank (FEB)

Submit an investment notification along with identity verification to a designated Foreign Exchange Bank branch.

2. Transfer Capital Funds

Send the required investment capital from overseas or deposit it into a temporary local account. Obtain a bank-issued certificate confirming the deposit.

3. Register the Company

File the necessary incorporation documents with the Korean court, including details about directors, auditors, and shareholders.

4. Complete Tax Registration

5. Open a Corporate Bank Account

Transfer the capital from the temporary account to the newly created corporate bank account.

6. Register as a Foreign Direct Investment (FDI) Company

Complete the FDI registration within 30 days of depositing the investment capital to obtain official recognition.

Why Choose South Korea for Your Business?

South Korea’s cutting-edge infrastructure, highly skilled workforce, and pro-business policies make it a prime destination for foreign investors. While the incorporation process requires careful attention to legal and regulatory requirements, strategic planning can ensure a smooth setup.

At Pearson & Partners, we specialize in assisting foreign businesses through every stage of company registration in South Korea. Our expert guidance ensures compliance, efficiency, and a hassle-free experience.

📩 Need professional assistance? Contact us today for expert support tailored to your business needs.