Step-by-Step Guide to Korea Business Setup for Foreign Investors
A Guide to Starting a Business in South Korea
South Korea boasts one of the most educated workforces in the world, with a strong emphasis on STEM (science, technology, engineering, and mathematics) education. This has cultivated a pool of multilingual and highly skilled professionals, making it easier for international businesses to recruit talent and scale operations seamlessly. Known for their work ethic, adaptability, and dedication, South Korean professionals are a vital asset for companies seeking sustainable growth.
Business Registration Process in South Korea
1. Select the Right Business Structure
Determine the business structure that suits your needs, as it affects liability, management, and operational scope.
2. Choose a Company Name
Pick a unique and memorable name that aligns with your brand and meets South Korean naming regulations.
3. Register the Company Name
Secure your chosen name by registering it with the South Korean company registry.
4. Prepare Articles of Association
Draft and notarize a document detailing the company’s purpose, governance, and shareholder rights.
5. Submit Incorporation Documents
Submit all required documentation, including the certificate of incorporation, to the relevant authorities.
6. Obtain a Business License
Acquire the necessary license to operate legally in South Korea.
7. Register for Taxes and Social Security
Complete registrations with the National Tax Service and National Pension Service to meet tax and social security requirements.
8. Ensure Ongoing Compliance
Maintain compliance by filing annual reports, holding shareholder meetings, and adhering to local regulations.
Establishing a Limited Liability Company (LLC) in Korea
Foreign investors can follow these steps to form an LLC in South Korea:
1. Notify the Foreign Exchange Bank (FEB)
Inform an FEB branch of your investment intent and provide identity verification documents.
2. Transfer Initial Capital
Send initial capital from an overseas account or deposit it locally. Obtain a bank certificate confirming the transfer.
3. Register the Company
Submit incorporation documents to the Korean court, including details about directors, auditors, and shareholders.
4. Complete Tax Registration
Register the company with the appropriate tax authorities.
5. Open a Corporate Bank Account
Transfer the initial capital from the temporary account into the company’s official corporate account.
6. Register as an FDI Company
Apply for Foreign Direct Investment (FDI) registration within 30 days of the capital transfer.
Final Thoughts
Setting up a business in South Korea requires a strategic approach, thorough knowledge of local regulations, and selection of a suitable business structure. By adhering to all registration and compliance requirements, foreign investors can establish a strong presence in South Korea’s dynamic economy.
At Pearson & Partners Korea, we provide comprehensive support for company formation, guiding you through each step of the process to ensure a seamless experience. Contact us today for personalized assistance tailored to your business goals.
