Practically anyone, whether an individual or a foreign entity, can initiate a business venture or incorporate a company within South Korea. The establishment of various business entities hinges upon the nature of operations and adherence to pertinent legal frameworks and regulations. To uphold the excellence of our services, the procedure for initiating, registering, and incorporating businesses in Korea is conducted under the supervision of certified Korean legal professionals.
This category of registration pertains to a Korean-owned company, representing the prevalent form of incorporation in South Korea. It is accessible to both foreign nationals and Korean citizens. Unlike the Foreign Direct Investment Company (refer to below), no minimum capital is mandated for its registration. A domestic Korean company may be established for any of the following types of businesses:
Joint Stock Company (Chusik Hoesa) is the most popular business entity for foreign investors to establish subsidiaries in South Korea. Currently, it is the only business entity that publicly issues shares in South Korea.
As such, stockholders only have limited liabilities in the company, based on their initial capital investment. In addition to that, stocks can also be freely transferable, with approval from the board of directors Hence, general shareholder meetings are required to be held at least once annually. Not only that, but a Joint Stock Company also has to appoint a statutory auditor to supervise the company’s management and accounts.
Limited Liability Company (Yuhan Hosea) is the most preferred type of business in South Korea. It is a closely held company that allows for a maximum of 50 shareholders. These shareholders are not liable for any debts or obligations incurred by the company and their liability is limited to their share capital. The requirements to open a Limited Liability Company in South Korea are minimal. This includes at least one director and one shareholder of any nationality, no minimum paid-up capital for a South Korean LLC, and a legal registered office address. Under the
Foreign Investment Promotion Law (FIPL), a foreign-owned local corporation is recognised as a foreign investor and is required to invest at least 100 million won.
Foreign individuals and companies can choose to establish a local corporation as a Foreign Direct Investment Company (FDI). This option applies to the various types of businesses listed earlier. A minimum capital of 100 million KRW is necessary. FDI companies, unlike standard local Korean corporations, may receive certain advantages under Korean law based on their specific activities.
While an FDI Company is viewed as a local corporation, a Branch Office is seen as a foreign corporation, where the foreign headquarters and the Korean branch are legally one entity. Branch offices can engage in profit-generating activities in Korea and are subject to the same tax laws and rates as domestic Korean companies.
Similar to a Branch Office, this business form is also considered a foreign corporation. A representative office primarily serves foreign investors who have no immediate plans to conduct business in South Korea. Therefore, its activities are restricted to non-commercial tasks like market research and marketing on behalf of the parent company. Despite this limited scope, registering with the appropriate tax office is mandatory for a representative office. Nevertheless, it remains a favored option for foreign investors aiming to establish their presence and evaluate the market landscape before formally entering the South Korean business scene.
Pearson & Partners Korea offers specialized services focused on facilitating the establishment and incorporation of foreign enterprises and corporations within South Korea. From the initial consultation onward, we provide comprehensive support, aiding in the selection of the optimal company registration structure and furnishing essential documentation, pertinent certifications, authenticated translations, power of attorney services, assistance in bank account setup, VAT registration, and facilitation of visa applications for foreign managerial personnel.