Step-by-Step Guide to Korea Company Setup for Foreign Investors
South Korea has earned a reputation as a pro-business destination by adopting policies that promote foreign direct investment (FDI) and cultivate a competitive market environment. Businesses operating in the country can benefit from significant incentives, such as tax breaks, cash grants, and subsidies offered in strategic areas like free economic zones (FEZs) and industrial clusters. The government has simplified procedures for company registration and visa applications, providing international investors with a transparent and efficient system. Moreover, robust legal protections for intellectual property and investor rights create a secure foundation for long-term business operations.
Steps to Register a Business in South Korea
1. Selecting the Appropriate Business Structure
Choose a business structure that aligns with your liability and management preferences.
2. Choosing a Company Name
Pick a distinctive and brand-aligned name that complies with local registration requirements.
3. Registering the Company Name
Register your chosen name with South Korea’s company registry to secure its availability.
4. Preparing Articles of Association
Draft a notarized document detailing the company’s purpose, shareholder rights, and decision-making framework.
5. Submitting the Required Documentation
Provide incorporation paperwork, including a certificate of incorporation, to the appropriate authorities along with the applicable fees.
6. Securing a Business License
Obtain the necessary license to legally operate your business in South Korea.
7. Registering for Taxes and Social Security
Enroll with the National Tax Service and National Pension Service to fulfill tax and social security obligations.
8. Maintaining Compliance
Adhere to ongoing legal requirements, such as filing annual reports and holding shareholder meetings.
Establishing a Limited Liability Company (LLC) in South Korea
Foreign investors can follow these steps to set up an LLC:
1. Notify the Foreign Exchange Bank (FEB):
Submit a notification of your investment intent and identity verification documents to an FEB branch.
2. Transfer Capital:
Deposit capital into a temporary account locally or transfer it from overseas, then obtain a bank certificate confirming the deposit.
3. Register the Company:
Submit incorporation documents, including details about directors, auditors, and shareholders, to the Korean court.
4. Complete Tax Registration:
Register the business with the appropriate tax authorities.
5. Open a Corporate Bank Account:
Transfer funds from the temporary account to the company’s permanent bank account.
6. Register as an FDI Company:
File for Foreign Direct Investment (FDI) registration within 30 days of depositing the capital.
Conclusion
Incorporating a business in South Korea requires navigating regulatory processes and choosing the right structure to align with your goals. With proper planning and adherence to legal requirements, foreign investors can successfully establish operations in South Korea’s thriving economy.
At Pearson & Partners Korea, we offer end-to-end support for company incorporation in South Korea, ensuring a seamless registration process and regulatory compliance. Contact us today for expert assistance tailored to your specific business needs. Reach out to us for more information.
