Step-by-Step Guide to Korea Company Incorporation for Restaurant Owners

Embarking on the journey of starting a restaurant in South Korea opens doors to an exciting culinary experience in a country celebrated for its dynamic and diverse food culture. With South Korea’s dining landscape blending traditional Korean flavors with international influences, it provides a promising market for food entrepreneurs. This guide outlines the essential steps and insights for opening your restaurant, covering everything from understanding local tastes to securing required permits.

1. Selecting the Right Business Structure

Choosing an appropriate business structure is crucial. In South Korea, most restaurant owners opt for either a Limited Liability Company (LLC) or a Joint Stock Company (JSC).

• LLC (Yuhan Hoesa): Suitable for small to medium enterprises, an LLC offers a flexible legal structure with limited personal liability for company debts. Managing an LLC is straightforward as it does not require a board of directors, though at least one investor is necessary.
• JSC (Chusik Hoesa): More suitable for larger businesses, a JSC requires at least three investors and includes a board of directors, allowing share transfers and attracting external investment.

Your decision will depend on your business objectives, the scale of your venture, and whether you require external funding. Sole proprietorships or partnerships may be less attractive to foreign investors due to their liability and ownership limitations.

2. Securing a Company Name

The business name must be unique, written in Korean characters, and adhere to local regulations. Once selected, submit it to the Korean Intellectual Property Office (KIPO) for approval to reserve it for incorporation. Choose a name that aligns with your brand and resonates with your target audience.

3. Notifying Foreign Investment

Foreign investors are required to report their investment through KOTRA or designated banks. Documentation includes proof of nationality (such as a passport or corporate certificate) and a power of attorney if a representative will be handling the process.

4. Transferring Investment Capital

Investment capital can be transferred to a local bank or brought in via customs. Once in South Korea, the funds should be converted into Korean won and deposited in a designated account. Banks issue a securities subscription deposit certificate, which is necessary for registration.

5. Registering Incorporation and Business

Incorporation registration is mandatory. Submit required documents, including articles of incorporation, to the local court registry or through the online i-One system. Following incorporation, register the business at the tax office within 20 days, providing additional information about your restaurant.

6. Registering as a Foreign-Invested Company

Within 30 days of transferring investment capital, complete this step by submitting documents, such as the foreign currency purchase certificate and shareholder ledger, to obtain a foreign-invested company registration certificate. This certificate is essential for remitting profits and visa applications.

7. Opening a Bank Account

A business bank account is needed to manage transactions. Banks generally require a business registration certificate and proof of identity; confirm requirements beforehand to make an informed choice.

8. Registering with the Korea Tax Authority

To comply with South Korean tax regulations, register your restaurant with the Korea Tax Authority. Required documents include your business registration certificate, seal impression, and other identifiers.

9. Launching Your Business

Once everything is in place, you’re ready to serve customers with exceptional food and service. Continuously monitor customer feedback and performance to ensure sustained success.

Conclusion

Starting a restaurant in South Korea involves detailed planning, from selecting a business structure and securing a company name to notifying foreign investment and ensuring tax compliance. With South Korea’s lively food culture, the potential for success is significant.

At Pearson & Partners Korea, we provide comprehensive support, guiding you through each step—from legal compliance to strategic planning—so you can concentrate on the essence of your business: bringing your culinary vision to life in Korea.