Forms of Corporation in Korea, Which One to Choose?
Updated: Sep 5
Types of Companies in Korea
There are two types of companies you can choose; Foreign-invested companies and Foreign company’s Korea branch offices. Foreign-invested companies are considered as domestic corporations, while Korea branch offices are considered as foreign corporations.
Stock Company Shareholders who have invested in a company hold limited liability of their investment amount. Transfer of stocks is easy. Corporate bonds can be issued, and stocks can be listed.
Limited Company (Ltd) Employees hold the limited liability of their investment amount only, thus, do not hold the responsibility to creditors. Transfer of shares may be restricted under the articles of association. As limited companies were previously exempted from external audits, many foreign-invested companies, that were reluctant to disclose company information, chose this type. Limited companies, however, are now subject to audits according to an amendment of the Enforcement Decree of the Act on External Audit of Stock Companies.
Limited Liability Company (LLC) LLC is a newly introduced type of form for venture companies or start-ups. it is the most common form of company when starting a business in Korea because it has an easy incorporation process and limited liability only.
Branch Office & Liaison Office A branch office or a liaison office of a foreign corporation are divided depending on whether the office conducts business activities or not. A branch office is a foreign corporation that carries out business activities of the head office, hence the business activities are limited to its parent’s company. On the other hand, a liaison office is a foreign corporation that cannot carry out any revenue-generating activities, but market research, marketing activities, client relationships, etc. are allowed.
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