Korea Business Structures Compared: 주식회사, 유한회사, Branch or Liaison Office

Last updated: October 2026

Short answer: Most foreign companies use a subsidiary, either a 주식회사 (stock company) or a 유한회사 (limited company). Both keep liability inside Korea and can support a D-8 investor visa. A branch office can trade, but the parent carries full liability. A liaison office cannot earn revenue at all.

Your structure decides who carries liability, how you are taxed, how much governance you maintain each year, and whether you can sponsor a founder's visa. Changing it later means registering a new entity, so settle it before you start Korea company registration.

Korea's Business Structures at a Glance

The Three Laws Behind Every Structure

• The Commercial Act sets out company types, directors' duties and shareholder rights.
• The Foreign Investment Promotion Act covers foreign investment into Korean companies, the notification process and foreign-invested company status.
• The Foreign Exchange Transactions Act covers cross-border money movement. Liaison offices sit under this law.

Which law matters most depends on the structure. That is why the structure decision comes first.

Stock Company (주식회사, Jusik Hoesa)

The default choice for foreign subsidiaries, and the only Korean form that can list shares publicly.

• Liability: limited to each shareholder's investment.
• Shares: freely transferable unless the articles require board approval.
• Governance: an annual shareholders' meeting is required. A 주식회사 with capital under KRW 1 billion can run with one or two directors and no board, and does not need a statutory auditor. That keeps small subsidiaries simple.
• Best for: companies expecting outside investors, several shareholders or a future share issue, or that want the profile Korean partners recognise most.

Limited Company (유한회사, Yuhan Hoesa)

Often called an "LLC" in English. Popular with wholly owned subsidiaries.

• Liability: limited to each member's contribution.
• Ownership: no public share issue and no bonds. The old 50-member cap was removed in the 2011 Commercial Act reform.
• Governance: lighter than a 주식회사, with fewer formalities. Larger 유한회사 now face external audit and disclosure rules much like stock companies, so the gap narrows as you grow.
• Best for: a single foreign parent that has no plan to raise money in Korea.

A newer form, the 유한책임회사 (Yuhan Chaegim Hoesa, limited liability company), adds partnership-style flexibility. Few foreign investors use it. Two partnership forms also exist (합명회사 and 합자회사), but unlimited liability makes them unsuitable for most inbound investment.

Branch Office (지점)

• Legal status: not a separate entity. It is the foreign parent operating in Korea.
• Liability: the parent is liable for everything the branch does.
• Commercial use: can sell, invoice and earn revenue.
• Tax: pays Korean corporate tax on Korean-source income. Depending on your country's tax treaty, profits sent home can face an extra branch tax.
• Best for: extending an existing business where the parent accepts the liability and wants to avoid a separate company.

Liaison Office (연락사무소)

• Legal status: part of the foreign parent, reported under the Foreign Exchange Transactions Act.
• Commercial use: none. No sales, no invoices, no revenue.
• Allowed: market research, liaison, promotion, quality checks.
• Risk: if staff negotiate or sign contracts in practice, the tax office can treat the office as a permanent establishment and tax it.
• Best for: research before entry, with no Korean revenue.

How Tax Differs by Structure

Subsidiaries and branches both pay Korean corporate tax on Korean income. From fiscal years starting on or after 1 January 2026, the rates are:

Local income tax adds 10% of the corporate tax. Dividends a subsidiary pays to its foreign parent face withholding tax, which a tax treaty often reduces. A liaison office has no taxable income as long as it stays non-commercial.

Foreign-Invested Company Status

This is a status, not a separate structure. A Korean company qualifies when each foreign investor puts in at least KRW 100 million and the investment is notified under the Foreign Investment Promotion Act. The notification must come before the money is sent.

The status underpins the D-8 visa, protects your right to send profits home, and opens access to incentives. Our guide to foreign investment reporting in Korea explains the filing order.

How Structure Affects Visas

Most structure guides skip this. A D-8 investor visa depends on registered foreign investment in a Korean company you own. A subsidiary with foreign-invested status supports it cleanly. A branch or liaison office does not support a D-8, although staff sent from the parent may qualify for other visa types.

If anyone is relocating to Korea, choose the structure around that first.

Company Names Are Not Trademarks

Name availability is checked against the commercial register through the Internet Registry Office. Clearing the registry gives you no trademark rights. If your brand matters, run a separate search with the Korean Intellectual Property Office.

Still Deciding?

If you know your plans but not the structure, our decision guide to choosing a Korea entity matches common situations to the right structure.

How Pearson & Partners Korea Helps

Since 2017, Pearson & Partners Korea has helped more than 800 global businesses enter Korea. Our team includes certified public accountants, certified judicial scriveners (법무사), certified tax accountants (세무사) and certified labor attorneys (노무사). We work with you in English and Korean.

We handle the whole process remotely, including the corporate bank account, so you never need to travel to Korea. Our services cover entity setup and branch registration, foreign investment reporting, Employer of Record (EOR), tax and accounting, payroll and social insurance, and visa support including the D-8.

Not sure which structure fits? Talk to our team before you file.

Contact us
Web: pearsonkorea.com/contactus
Phone: +82-2-6952-7579
Office: 30F Trade Tower, World Trade Center Seoul, 511 Yeongdong-daero, Gangnam-gu, Seoul 06164

Official sources: Invest KOREA and KOTRA for inbound investors, and the National Tax Service for tax.

Frequently Asked Questions

What is the difference between a 주식회사 and a 유한회사?
Both are separate Korean companies with limited liability. A 주식회사 can list shares and issue bonds, and has more formal governance. A 유한회사 cannot list or issue bonds, and has lighter formalities, which suits a wholly owned subsidiary.

Which structure do most foreign companies choose in Korea?
A subsidiary, as a 주식회사 or 유한회사. It keeps liability in Korea and supports the D-8 visa.

Can a liaison office earn revenue in Korea?
No. It is limited to non-commercial work. Acting commercially risks being taxed as a permanent establishment.

Does a branch office pay Korean tax?
Yes. A branch pays Korean corporate tax on Korean-source income at the same rates as a company, and profits sent home may face extra tax depending on your treaty.

Does my structure affect visa eligibility?
Yes. The D-8 investor visa needs registered foreign investment in a company you own. Branches and liaison offices cannot support it.

What are Korea's corporate tax rates in 2026?
10%, 20%, 22% and 25% across four income brackets, plus local income tax of 10% of the corporate tax. The rates rose by one point for fiscal years starting on or after 1 January 2026.

Do I need to travel to Korea to set up any of these structures?
Not with Pearson. We handle registration and the corporate bank account remotely for our clients.