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  • Writer's pictureJ&J Korea

How to Register a Company in Korea

Updated: Oct 4, 2023


Company registry

Embarking on a business venture in a foreign country can be both exciting and challenging. South Korea, with its dynamic economy and global opportunities. It is a desirable location for business owners and entrepreneurs seeking to increase their clientele.


This blog will discuss answer to your query.' How to Register a Company in Korea '. Also, we will highlight the essential steps and factors to consider when registering a company in Korea.


Company Registry in South Korea


Let us have a deeper understanding of the critical factors involved in setting up a company in South Korea:


Business Factors:


1. Formation of a New Korea Company:


  • Choosing the right type of company structure is a pivotal decision. In South Korea, two common options are a Joint Stock Company (Chusik Hoesa) and a Private Limited Company (Yuhan Hoesa).

  • Joint Stock Companies rely on a board of directors for daily operations, while Private Limited Companies depend on general meetings of members to make vital decisions.

  • One additional option to consider when setting up a company in South Korea is the Limited Liability Company (LLC). An LLC is a popular choice for entrepreneurs and businesses due to its flexibility and liability protection. Unlike Joint Stock Companies, where a board of directors handles daily operations, and Private Limited Companies, which rely on general meetings of members for decision-making, an LLC offers a middle ground. It allows for a simpler management structure while still providing limited liability protection to its members.


2. Composition of Shareholders and Directors:


  • Identifying the individuals or entities that will hold shares and manage the company is a fundamental step. Directors play a pivotal role in the decision-making process.


3. The Location to Register Your Company:


  • Selecting the right location within South Korea for your business is crucial. Factors such as proximity to suppliers, accessibility to customers, and proximity to transportation hubs must be taken into consideration.


4. HR Plan:


  • Deciding whether to hire local employees or apply for business visas for non-Korean managers is a critical aspect. An effective HR plan is essential for the long-term success of your business.


License and Product Approval:


  • Depending on your industry, you may require licenses and permits for importing, exporting, and selling products and services. It is imperative to comply with customs and import laws to avoid legal complications.


Cultural and Language Factors:


  • Understanding and adapting to Korean culture and language are paramount. Respect for age and hierarchy is a significant aspect of Korean business etiquette. Official and legal documents are primarily in Korean, although English documents may be accepted in some cases.


Types of Companies


In South Korea, there are several types of companies that foreign individuals or entities can establish:


  • A local company is one that has 100% of its ownership in foreign people or businesses. When the foreign investment reaches at least KRW 100 million (approximately USD 85,000) and constitutes 10% or more of the total investment, it can be registered as a Foreign Direct Investment (FDI) company. FDI companies meeting specific requirements may be eligible for special benefits provided by the Korean government.


A. Joint Stock Company (Chusik Hoesa):


  • This type of company has a board of directors and a representative director who implements decisions made at shareholders' meetings. A statutory auditor supervises business operations and audits the company's accounts.


B. Private Limited Company (Yuhan Hoesa) / Limited Liability Company (Yuhan Chaekim Hoesa):


  • The final deciding body for these corporations is the general meeting of members. Directors, elected at these meetings, manage daily business operations. Companies with more than two directors can register representative directors.


2. Branch Office / Liaison (Representative Office):


A. Branch Office:


  • A branch office is classified as a foreign corporation, with the foreign headquarters and the Korean branch constituting a single legal entity. It can conduct profitable business in Korea and is subject to the same tax laws as local Korean corporations.


B. Liaison Office:


  • A liaison office, also known as a representative office, is also considered a foreign corporation. However, it cannot generate sales. Its activities may include networking, research and development, market research, and advertising.


How to Register a Company in Korea : Steps to Register a Company in South Korea


The process of registering a company in South Korea involves several key steps:


1. Planning:


  • Consult with experts, such as those at J&J Korea, to discuss your business plan, including activities, paid-up capital, and the composition of directors and shareholders. They will assist you in determining the best business structure in South Korea..


2. Document Requirements:


  • After deciding on the company's formation, prepare the necessary documents for directors and shareholders. Some documents may require notarization and apostilling..


3. Court Registration:


  • Once you've gathered the required documents, J&J Korea can submit the application on your behalf to the appropriate authorities.


4. Tax Registration:


  • Using their expertise, the specialists at J&J Korea will register your company with the tax authority and acquire a tax identification number.


5. Bank Account Opening:


  • Finally, J&J Korea can assist in opening a corporate bank account, streamlining your financial operations in South Korea.


Conclusions


Starting a business in Korea is not only a smart move strategically, but it also presents an opportunity for expansion in a fast-paced and cutthroat market. However, it necessitates painstaking preparation, observance of legal requirements, and a profound familiarity with the regional culture and language. J&J Korea, with its expertise and experience, can be your trusted partner in navigating the complexities of company registration in Korea. Their services encompass every step of the process. Thus, ensuring a smooth and successful establishment of your business in the Republic of Korea.


The knowledgeable consultants at J&J Korea can point you in the direction of the best choice for your business goals. With their assistance, you can unlock the doors to the thriving Korean market and embark on a journey of growth and success.


Congratulations, now you better know How to Register a Company in Korea.

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