Types of Business Formation in South Korea
When setting up a business in Korea, it is important to choose the most appropriate registration vehicle.
The three most common types of corporate registration vehicles are:
Joint Stock Company /
Limited Liability company
JS Company or LLC, established as a local company or a subsidiary company (100% owned by HQ), has a close relationship with the local business community and the opportunity for incentives depending on the type of business based on the Special Tax Treatment Law.
A branch office is treated as a separate taxable entity and able to operate as a revenue generating entity. There is no minimum capital requirement at establishment. Tax incentives are not available to branch office. It may include operating funds from head office.
A liaison office, which is not a legal entity and is deemed as non-income generating entity, can only conduct preliminary or auxiliary activities such as marketing and supporting for its head office. There is no minimum capital requirement at establishment.