Register company in South Korea
To register company in South Korea is hassle-free if you know how to go about it. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important business channels.
With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process to register company in South Korea. Our ultimate goal is for your South Korean company to be operationally ready within the stipulated time frame.
Our service package includes everything you will require to set up business in South Korea:
- Register company in South Korea with South Korea Registry of Companies
- The local company secretary and registered address
- Opening a local or international corporate bank account
- Apply for a business license in Korea (if required)
- Annual accounting and tax services
- Staying compliant with the laws
Can a foreigner register company in South Korea?
- The government provides foreign investors with the opportunity to register company in South Korea. Tetra Consultants will ensure your compliance with the government policies and advise you on the steps you need to take to register company in South Korea.
- According to the government policies, businesses registered by foreigners can be wholly-owned which means that you can have complete ownership of your business.
- For example: a South Korean Limited Liability company can be incorporated by foreigners. Registering such a company has minimal requirements, including:
- One director of any nationality
- One shareholder of any nationality
- A legal registered office address
- Under the Foreign Investment Promotion Law (FIPL), you will also be required to invest KRW 100 million (approximately USD $90,000) into the company they wish to start. Moreover, you will also be required to apply for the entrepreneur visa by completing the D-8 form.
- Additionally, if you do not wish to carry out business activities in the country, you can also take advantage of the fiscal benefits of setting up business in a South Korean Free Zone, which include complete exemption from income tax and tariffs on commodities in this zone. You can find additional information in a later section.
How long does it take to register company in South Korea?
- Tetra Consultants will complete your foreign company registration in South Korea, through a fuss-free process.
- On receiving the required due diligence documents of the directors and shareholders, our team of experts will proceed to reserve your preferred company name and prepare the incorporation documents.
- Tetra Consultants ensures to undertake the process to register company in South Korea without the need for owners and incorporators to physically move to the country. Accordingly, throughout the South Korea company formation process, you will not be required to travel overseas.
- The process to register company in South Korea should approximately be completed within 14 days of engagement. We will then proceed to send you all the required documents to register company in South Korea..
- Within 4 weeks after you have registered company in Korea, Tetra Consultants will open a corporate bank account with a local or international reputable bank.
- Consequently, you can expect your South Korea international business corporation to be fully operational and be able to issue invoices within 6 weeks upon engaging Tetra Consultants.
How to register company in South Korea?
Step 1: Planning and Strategy
- Tetra Consultants will learn more about the company you wish to set up: intended business activities, capital as well as nationalities of directors and shareholders. Based on this information, we will recommend the most suitable type of business entity and whether any licenses are required to legally conduct business in South Korea.
Step 2: Pre-registration requirements
- Tetra Consultants will then ensure all the due diligence documents of the directors and shareholders have been received.
Step 3: Reserve preferred company name
- Tetra Consultants will then check for the availability of the preferred company name and reserve the same.
Step 4: Preparing and submitting relevant documents
- Our team of experts will begin preparing all the relevant documents including the Certificate of Incorporation, Articles of Association, and more.
- We will then proceed to submit all the relevant documents, on your behalf, for the company formation.
Step 5: Post-registration
- After Tetra Consultants has set up your South Korean company, you can expect to receive the documents of your new company including the South Korea business registration certificate, memorandum & articles of association as well as a register of directors and shareholders. These documents will include South Korea company registration number, which you will require for conducting business in the country and in opening a corporate bank account.
- These documents will be in Korean. If you wish, Tetra Consultants will provide you with the translated versions in your preferred language.
Step 6: Tax Registration
- Tetra Consultants will assist you in registering your business and receiving a tax identification number.
Step 7: Opening a bank account
- Tetra Consultants will proceed to open a corporate bank account for your newly incorporated company.
- We will take advantage of our existing banking network to help you open a bank account with a local or international reputable bank.
- To know more about how to open a bank account in South Korea, refer to this webpage.
Step 8: Compliant with the laws
- Once company formation is complete, Tetra Consultants will continue to support you in staying compliant with the laws of the government.
- We will provide assistance in every way you require – preparing financial statements, filing annual returns, and more.
- If you are keen to know about how to register a company in Korea, Tetra Consultants has prepared a step-by-step explanation of all steps required.
What are the types of entity structures available to register company in South Korea?
Before the start of the engagement, Tetra Consultants will fully understand our client’s business model before recommending the most suitable business entity. Some considerations we consider include the type of business activity, tax obligations as well as potential personal liability.
Limited Liability Company (Yuhan Hoesa)
- Limited Liability Company (Yuhan Hoesa) is the most common entity structure to register company in South Korea specifically for foreign investors who are planning to set up business in Korea. It is a closely held company that allows up to 50 shareholders who are not liable for any debts or obligations incurred by the company and liability is limited to share capital.
- However, under the Korean Commercial Code, Limited Liability Company (Yuhan Hoesa) is prohibited from securitizing shares and releasing company bonds.
Joint Stock Company (Chusik Hoesa)
- 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.
- A partnership is a business structure that consists of two or more business partners working together and distributing profits and losses amongst themselves. There are three types of partnership, namely General (Hapmyeong Hoesa), Limited (Hapja Hoesa), and Limited Liability (Hapja Johap).
- Under the General Partnership (Hapmyeong Hoesa), partners hold unlimited liability for the business, and unanimous consent by all partners is required for the transfer of ownership. In addition, Hapmyeong Hoesa is not considered to be a separate legal entity and is accountable for corporate taxes.
- Whereas for Limited Partnership (Hapja Hoesa) and Limited Liability Partnership (Hapja Johap), both require at least one of the partners to hold the unlimited liability for the business while the other holds limited liability. As such, limited members do not have the discretion to interfere with a company’s decision.
- The only difference between these two types of partnership is that while Limited Partnership (Hapja Hoesa) is not considered as a separate legal entity and is accountable for corporate taxes, Limited Liability Partnership (Hapja Johap) is considered as a separate legal entity and therefore not held accountable for corporate taxes.
- If you are looking to set up a business in South Korea with other businessmen or to gain access to more capital through partnership loans, Tetra Consultants will recommend you choose a partnership entity.
- A branch office is an extension of the parent company that is planning to establish a presence in South Korea. As such, the parent company is fully accountable for all liabilities incurred by the South Korea branch office.
- In addition, a branch office setup does not impose any limit on the amount of investment or ownership.
- Your South Korea branch office will not have full entitlement to government support or tax incentives as compared to those business entities mentioned above.
- A representative office is often meant for foreign investors who do not intend to carry out business in South Korea. As such, they are only allowed to conduct limited and non-commercial activities such as market research and marketing activities for their parent company.
- However, a representative office is still required to register and report to the jurisdictional tax office. Nonetheless, a representative office is a popular choice for foreign investors who are planning to promote their presence, as well as seeking to explore the potential market before setting up business in South Korea.
South Korea Free Economic Zones:
- Your business can also wish to set up in one of the eight South Korea free economic zones spread across the country, providing high technology and industry support services to businesses.
- The business must meet one of the following qualifications:
- Business must be in the manufacturing industry, with more than 30% of total sales generated from exporting.
- Business must be in the trading industry – export and import
- Business must be in the logistics industry – warehousing, loading, transportation, and more.
- Businesses must support the other companies in the Free zone with their finance, data processing, and more.
- In such a zone, the government does not levy corporate and income tax in South Korea for foreigners and local businesses. Businesses do not need to pay any tariff on foreign commodities and commodities traded in this zone.
The Free Economic Zones (FEZ) include:
- The government is looking to turn this zone into the business hub of Northeast Asia. Thus, this zone does not primarily cater to a small number of industries but a variety of them.
- Owing to its connectivity to China, this zone will be well-suited for firms looking to enter the East Asia market.
- Additionally, the airport and seaport allow it to have a huge transportation network that can be advantageous for the business.
- This zone will be best suited for a logistics firm as it is connected to major ports around the world. Moreover, it has a high storage capacity and is apt for transshipment.
- Besides logistics, this zone also cates to the shipbuilding, auto, and machinery industry and has multiple leading businesses competing with each other in this zone.
Gwangyang Bay Area FEZ:
- This zone is strategically located on the main sea route of the Pacific Ocean. It is also well-connected to various ports and airports in China, United States, and Northeast Asia.
- There is a well-developed infrastructure that businesses can take advantage of. This infrastructure includes airports, railways, and expressways. Besides this, this zone also has a stable industrial infrastructure and strong labour force that can serve as a benefit for the business.
- It consists of five districts namely Gwangyang, Hadon, Yulchon, Sindeok, and Hwayang catering to different industries- logistics, manufacturing, advanced materials, residential, and tourism respectively. With these well-established districts, the quality of life is also higher.
Yellow Sea FEZ:
- This zone is located on the east coast of Gyeonggi-do and is also referred to as the Gyeonggi Free Economic Zones.
- It is divided into three districts namely, Pyeongtaek-Poseung (BIX) District which caters primarily to the logistics industry, and the Hyeongdeok and Siheung Baegot District which caters to the unmanned vehicles industry by providing R&D.
- In this zone, there is a focus on four major industries- IT Convergence, Transportation Components, Green Energy, and Medical services.
- There are multiple Research and Development institutions in this zone, allowing the establishment and growth of industries.
East Coast FEZ:
- This zone caters to the green materials, logistics, and tourism industry.
- It has created the largest non-ferrous metal cluster in the country and has the world’s leading companies establish themselves here.
- It is connected to Japan, Russia, and China, and therefore, serves as a strong logistics hub.
- This zone is located in the centre of the country, allowing firms to cater to the inland markets and transport to multiple places in all directions, thus not restricting the firm to cater to one region alone.
- This is a prime zone for the aviation industry, with a large workforce suited for this role.
- The focus of this zone is to develop future-oriented new industries and tourism and leisure industries.
- This zone is known as the Korea-China economic cooperation zone because of the free trade agreement signed by both countries. Here, any tariff on the export and import of the commodities is exempted.
Depending on your business needs and activities, our team of experts will advise you on the best suited Economic Zone for your firm.
Is South Korea good for business?
There are advantages and disadvantages of doing business in South Korea. Besides being recognized as one of Asia’s most developed economies (Four Asian Tigers). South Korea is also strategically located between two of the largest GDP- China and Japan. Thus, it may serve as advantageous for investors looking to enter the Asian market. However, the labor cost is relatively high. Besides this, the corporate tax rate and income tax rate in South Korea is 22% on capital gains and flat 19% on income.
Before you begin opening a business in South Korea, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established entity will be able to conduct business safely and legally while striving towards your long-term business goals.
- According to Transparency International, South Korea Corruption Perceptions Index was ranked 39 out of 180 countries in 2019.
- South Korea is a member of multiple global organizations such as the United Nations, World Trade Organization, OECD, and G-20, as well as a founding member of APEC and East Asia Summit.
- Currently, there are a total of eight Free Trade Zones that allow businesses to be exempted from paying corporate tax for five years.
- Export-driven, leading production mainly in electronics, telecommunications, automobile, machinery, ships, petrochemicals, and robotics.
- According to the Global Competitiveness Report published by the World Economic Forum, South Korea was awarded a score of 79.62%.
- The 1998 Foreign Investment Promotion Act passed by the government provided foreign investors with not only security but also tax benefits and cash benefits.
- Highly skilled labour force with a high level of literacy. 80% of adults have a university education. Moreover, the national IQ is considered to be the best, according to the OECD.
- However, only less than 20% of the workforce is fluent in English. This may result in some inconvenience when you are dealing with the local government and banks.
- In March 2020, Korea government passed one of the world’s first comprehensive cryptocurrency laws. This new framework allows for the regulation and legalization of cryptocurrency exchanges and cryptocurrency wallets in South Korea.
- Known for its high technology innovation with fast commercialization. There are many high technologies and commercialized IT companies in South Korea. Some of these companies include Samsung Electronics, LG Electronics, and Hyundai Motor.
- As Korean is the official language in South Korea, most legal corporate documents are in Korean. As such, you are most likely required to have the documents translated by a certified translator if you are opening a corporate bank account outside of South Korea.
- According to the latest annual ratings given by the World Bank, South Korea is globally ranked 5th in terms of ease of doing business, due to minimal legal requirements needed.
- South Korea is one of the largest producers of carbon dioxide in the world.
- According to the Environment Performance Index, South Korea is globally ranked 60th.
- The South Korean government introduced the Green Start Movement in an attempt to reduce food wastage and increase eco-friendly consumption in the country. The Movement includes introducing incentives such as a carbon point system and legislating necessary laws for green life.
Find out more!
Contact us to find out more about how to do business in Korea. Our team of experts will revert within the next 24 hours.
How can I verify a company in Korea?
- In order to verify a company in Korea, you can search with the tax authority, using the South Korea company registration number. Alternatively, you can refer to the DART Korea website to verify the company.
Can a foreigner start a company in South Korea?
- Yes, a foreigner can start a company in South Korea. However, there are certain requirements and procedures that need to be followed.
- To set up a company, the foreigner must first register the company with the Korean Commercial Registry and obtain a business license. The company must have a local agent/representative and a local address and must comply with Korean labor laws and tax regulations. Depending on the type of company structure, you may also be required to have a local director. Tetra Consultants can assist with the provision of nominee director services in South Korea.
- In addition, foreigners must obtain a visa to reside and work in South Korea if they plan to manage the company themselves. The visa type will depend on the purpose of the visit and the length of stay. Overall, while there are specific requirements and procedures that must be followed, foreigners can start a company in South Korea and benefit from the country’s vibrant economy and skilled workforce.
Is it hard to start a company in South Korea?
- Starting a business in South Korea can be a difficult task, particularly for foreign individuals who are not familiar with the country’s legal and regulatory framework. Some of the main obstacles include language barriers, understanding local business customs and practices, and meeting legal and regulatory requirements. However, the South Korean government has made efforts to simplify the registration process and provide support to foreign entrepreneurs.
- To overcome these challenges, foreign entrepreneurs may consider enlisting the services of a local agent or a consulting firm specializing in company registration. It is also important to establish relationships with local partners and customers, seek guidance from local experts, and ensure that legal and regulatory requirements are met. Despite the challenges, with the right guidance and preparation, foreign individuals can successfully establish and operate a business in South Korea.
How much does it cost to register a company in Korea?
- The total engagement fee depends on the services you require from us. Our service package includes planning and strategizing, assisting you through the incorporation process, ensuring your compliance with the law, and more.
- This total fee also includes the cost of incorporating the business and the government fees. We believe in complete transparency and have, therefore, uploaded the estimated cost on our website. We will discuss with you the total fee in detail before starting the incorporation process.
How much money do you need to start a business in Korea?
- As per the World Bank’s report “Doing Business 2020”, an individual requires approximately KRW 4.9 million (approximately USD $4,300) to register a business in South Korea. For a foreigner, an additional KRW 100 million needs to be invested in the company.
How do I start a start-up in Korea?
- In order to start a start-up in Korea, you must research the industry you are interested in. Thereafter, you should choose your business activity and select your preferred business name. You can then follow the steps found on our website.
- You can contact us for more information as well. Our team of experts will revert to you within 24 hours.
What business should I start in Korea?
- The business that you should start in Korea depends on your interest, capabilities, capital, and more. There are multiple opportunities to choose from. One such business opportunity is to take advantage of the growing e-commerce industry and potentially start a dropshipping business. In such a business, the company purchases the products directly from a third party and sends them to the customer. Another business opportunity is to start a financial consulting firm, provided you have the necessary accounting skills. This could potentially be a good business idea because many small and medium businesses do not have the account skills needed to file the returns of the business.
Is it easy to do business in South Korea?
- Yes, according to the Ease of Doing Business index, South Korea has a ranking of five out of 190 countries. This is because of the factors including enforcement of contracts and insolvency resolution.
When setting up business in South Korea you should?
- When setting up a business in South Korea, you must keep in mind that you are compliant with government regulations. Tetra Consultants can provide you with services assisting you in preparing your Korean company financial statements, completing your annual filings and tax returns, and more.
Can foreigners buy stocks in Korea?
- Yes, foreigners can buy stocks in Korea. Foreigners who wish to invest in the market are required to register with the Financial Supervisory Service (FSS) to obtain the investment registration certificate. Resident foreigners who work in Korea do not need to complete the registration process.
How can I get a business visa for South Korea?
- To get a business visa for South Korea, you must submit a visa application along with other relevant documents including a passport, invitation letter, business registration certificate, and more.
Is setting up foreign companies in Seoul a good idea?
- Yes, Seoul is the capital of South Korea and is strategically located. It is the largest trade, business, and finance hub. Moreover, many IT companies in South Korea such as LG and Samsung, have been established in this region.