How to Register an LLC in South Korea

Limited Liability Company or LLC is one of the most popular business structures in South Korea. An LLC has the characteristics of both a partnership and a corporation to provide the optimal balance of flexibility and protection to small businesses, startups, and foreign companies. 

This guide will take you through the process step-by-step — from the documents required for an LLC, the key steps, and even a breakdown of the cost. Let’s get started and know about how to register an LLC in South Korea. 

What is an LLC?

Also known as Yuhan Hoesa in South Korea, an LLC is a business structure that combines the characteristics of both a corporation and a partnership. Its most important characteristic is limited liability. 

This means that the parties (owners) are not responsible for the company’s debts and obligations. And if something were to go wrong financially, your personal assets — from your home to your savings account — are protected.

While the law allows very low capital (even ₩100), in practice banks and tax authorities expect a reasonable paid-in capital for credibility and compliance. For foreign-invested companies, a minimum of ₩100 million must be invested to qualify for foreign-invested status (D-8 visa eligibility, FDI benefits)

Depending on what makes sense, an LLC can be run directly by its members or by managers appointed by the owners. Internal policies and decision-making processes may also be tailored. In Korea, a LLC is taxed as a corporation, not a pass-through entity. Members do not report company profits on personal tax returns; the company pays corporate income tax, and dividends to members are taxed separately.

Advantages of Setting up an LLC in South Korea

1. Protection of personal assets – The limited liability protects your personal assets from company debts.

   
   

2. Adaptable management – Members may operate the company themselves or may hire others to manage.

   
   

3. No capital requirement to start – Low entry barriers make it ideal for startups. 

   
   

4. Credibility — It adds legitimacy, helping you work with banks, suppliers, and customers.

   
   

5. Longevity – Unlike partnerships that may fall apart when one of the members quits, it can last forever. 

   
   

6. Access to foreign investment – It is based on international business mechanisms as well as Korean laws.

   
   

With these advantages in mind, the LLC is one of the more popular options for entrepreneurs looking to enter the South Korean business arena.

Step by Step: How to Form an LLC in South Korea

Declare Business Registration at the Bank

The process starts when you deposit your company's paid-up capital in a designated bank's escrow account. This process also involves filing with the Foreign Exchange Bank for compliance with foreign direct investment regulations for the global investors. This process usually takes about five working days.

The funds are held in escrow until the company is fully registered, which adds transparency. There’s no set minimum capital you need to have, but it should be based on what you need to run your business.

Prepare Registration Documents

Then, you will need to organize all the necessary paperwork. That includes information such as the company name, activities, and Korean address. Notarized passports and proof of address are typically required for foreign investors.

If shareholders include corporations, additional documents are required, such as certificates of incorporation and a shareholder list. This is a key step, meaning that you should be careful with all the details to be submitted. Any mistake can lead to unnecessary delays. 

Submit to the Registry Office

Once you have all the documents ready, apply to the local Registry Office (often it is in the court). After approval, the Registry will issue a Certificate of Incorporation, which is a legal confirmation of the LLC.

At this stage, foreign-invested firms may also register with Invest Korea or other relevant institutions.

Obtain a Business Registration Certificate

After submitting the documents to the registry office, visit the tax office to get a Business Registration Certification. This typically takes approximately two business days. It is necessary for ventures looking to operate legally in South Korea. 

Open a Corporate Bank Account

Now that you have your certificate, open a corporate bank account to manage finances and transactions associated with your business. Once this account is up and running, the previously deposited escrow funds will be transferred to it. Generally, this process takes five days. 

Acquire a Tax Registration Number

The last step is to obtain a Tax Registration Number from the National Tax Service. This number must be included on all tax returns. It is normally generated within two business days.

Your LLC is now up and running, and you can start doing business in South Korea.

Documents Required

Here’s a summary of the most common documents you’ll be expected to provide:

• Application form for company details (Name of the company, business, capital, address)

• Lease agreement for the Korean office address

• Passports, proof of address, and appointment letters for directors and shareholders

• Seal impressions for directors

• Shareholder resolution confirming company formation

• For corporate shareholders: certificate of incorporation, shareholder list, and memorandum of association

The foreign-issued documents usually need to be legalized by the Notary Public and apostilled. Making these ahead of time prevents hold-ups.

Challenges and Tips for Foreign Startups

LLC registration in South Korea is quite simple once you get familiar with the process. However, there are some challenges to deal with. The biggest hurdle is the language barrier. This is because most of the documents are in Korean. That's why a foreign investor should work with a bilingual business registration expert. 

Another issue is to make sure that all documents are accurate and verified. Even a silly mistake can bring the approval process to a standstill. Therefore, stay updated on the regulatory changes through official sources like Invest Korea. 

Conclusion

Setting up an LLC in South Korea lets you tap into the thriving market of South Korea. Not only is it suitable for most businesses, but it also protects personal assets and can be started with little capital. 

While the LLC registration process may seem straightforward, there are some challenges, such as language barriers and keeping your documents accurate. That's why you need a business registration professional in South Korea who can help you throughout the journey. If you are looking for the one, look no further than J&J Korea. We help you with everything, from submitting the documents to registration.

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