in South Korea
Opening a company or starting a business in South Korea is possible for almost any foreign individual or company. Korea is one of the promising countries in Asia and foreign business and investment are highly welcomed in Korea. There are several types of businesses and companies you can establish, depending on your business activities and relevant laws and regulations.
Factors you need to consider when setting up company:
A formation(type) of new Korea company
Compose of shareholders and directors
The location to register your company
HR plan to hire local employee(s) or to apply for business visa(s) for non-Korean manager(s)
License and Product Approval
You may need licenses and permits to import/export and buy/sell some products and services. Ensure that all requirements of customs and import laws are legally satisfied.
Cultural and Language Factors
Understanding and adopting culture and language are important when you conduct business in foreign countries. Respect for age and seniority is important in Korean culture, with hierarchy affecting all aspects of social interactions. All official/legal documents will be in Korean and banks accepts English documents for some cases.
Types of company
The most common type of company in South Korea for foreigners or foreign companies are a subsidiary company, branch office, or liaison company. A foreign-owned local corporation is recognized as a ‘foreign investment’ under the Foreign Investment Promotion Act in South Korea.
1. Local Company / FDI Company
This type of company is considered a local Korea company. As 100% owned by foreign individual(s) or company(s), it’s also called a foreign investment company. If an investment threshold contributed by a foreigner or foreign company amounting to at least KRW 100 million (USD 85,000 appxl.) and being 10% or more of the total amount, you can register your company as a Foreign Direct Investment company (FDI company). The FDI company can apply for a business investment (D-8) visa. The Korea government provides some special benefits for FDI companies who meet the requirements.
A. Joint Stock Company (주식회사, Chusik Hoesa) - The Board of director, consisting of directors elected at shareholder’s general meeting, decide important matters related to daily operations of the company. Representative director is responsible for implementing the decisions of the general meeting of shareholders and board of directors with the authority to bind the company. Statutory auditor supervises the management of the company's business and audits the company's accounts.
B. Private Limited Company (유한회사, Yuhan Hoesa) / Limited Liability Company (유한책임회사, Yuhan Chaekim Hoesa) - General meeting of member is the ultimate decision-making body and determines company's structure and management matters. Directors elected at the general meeting of members manages daily business operations. A company that has more than 2 directors can register representative director(s).
2. Branch Office / Liaison (Representative Office)
A. Branch Office – The branch office is considered a foreign corporation unlike as above type of company. The foreign headquarter (parents company) and the Korean branch are a single legal entity. The branch office can conduct profit-making activities in Korea and is obligated to the same tax laws as local Korean companies.
B. Liaison Office – The liaison office, also called representative office, is considered as foreign corporation. It cannot generate any sales. Non-sales activities can be networking, R&D, market research, and advertisement, etc.
Steps to register company in South Korea
Our consultant would love to hear about your business and future plans including business activities, amount of paid-up capital, composition and nationalities of directors and shareholders. Based on your business plan, our consultant finds the most suitable type of business form in South korea.
2. Document requirements
After deciding the company’s formation, we list and prepare documents of the directors and shareholders. Some documents need to be notarized and apostilled.
3. Court registration
After receiving the required documents from your side, we will submit the application on the behalf of you.
4. Tax registration
Our specialist registers your business with the tax office and receives a tax identification number.
5. Bank account opening
Our specialist will open a corporate bank account.
J&J Korea is specialized in the registration and establishment of foreign companies’ business in the Republic of Korea. We assist from the consultation stage to choosing the right type of company formation, required documents and certificates, power of attorney, tax registration, bank account opening for Korea Won and foreign currency, and business visa application for the foreign employee (non-Korean).
If your company wants to set up an office easily and quickly / to work within a defined budget and time / to limit its initial commitment to South Korea / and needs help with tax/accounting, employment, immigration, and payroll service in South Korea, Contact our specialist today!