Checklist for Setting up a Company in South Korea

 

(e-mail) skkimlaw@naver.com

 

Checklist for Setting up a Company in South Korea

 

The following article explains the overall process of setting up a company in South Korea.

[Company Register] Setting up a Company in South Korea

 

Now, look at the checklist for setting up a company in South Korea.

 

 

1. Branches

 

1-A. Office

You must have a physical office in South Korea. When you register your business with the appropriate tax office, you will have to submit your office lease agreement.

 

1-B. Representative

You must also register an official representative with the South Korean registry office. Note that this person can be the same as the President or CEO of your company, but it does not have to be. This person’s purpose is to represent your company in business or contract signing in South Korea. Since they have to deal with business in South Korea, we recommend that you choose South Korean residents whether they are South Korean citizens or not.

 

1-C. Licenses and Permits

Check whether your branch requires any licenses or permits. As in many other countries, businesses in various industries, such as the finance, food, energy, construction, logistics, pharmaceuticals, and cosmetics industries, require such licenses and permits. Generally, they must be obtained before registering the branch at the tax office.

 

1-D. Documents

Prepare documents, such as a power of attorney, decision letter, passport copy, head office registration certificate, consent letter, proof of residence, and seal registration form. All documents must be notarized and confirmed by an apostille or consulate.

 

 

2. Liaison Offices

 

2-A. Office

You must have a physical office in South Korea. When you register your business with the appropriate tax office, you will have to submit your office lease agreement.

 

2-B. Manager

You must choose a manager who manages your liaison office in South Korea. Since they work in South Korea, we recommend that you choose South Korean residents whether they are South Korean citizens or not.

 

2-C. Documents

Prepare documents, such as a power of attorney, decision letter, passport copy, head office registration certificate, consent letter, and proof of residence. All documents must be notarized and confirmed by an apostille or consulate.

 

 

3. Company

 

3-A. Type of Company

South Korean Commercial Act (Article 170) allows for the establishment of five types of companies. The three types that limit shareholder liability are stock companies, limited companies, and limited liability companies. Please refer to section 2-A in the article below to determine which company is most suitable for your needs.

[Company Register] Setting up a Company in South Korea

 

3-B. Office

You must have a physical office in South Korea. When you register your company with the appropriate tax office, you will have to submit your office lease agreement.

 

3-C. Executives

You must appoint a representative. You may appoint additional directors and auditors. The minimum number of executives a company must have is defined as follows. 

Stock Company	Limited Company	Limited Liability Company
i) Capital ≥ KRW 1,000,000,000 1 representative director, 2 inside directors, and 1 auditor ii)  Capital < KRW 1,000,000,000 a) 1 inside director who represents your company if they own no shares b) 1 inside director who represents your company and 1 auditor who owns no shares if the director owns shares.	1 director who represents your company	1 manager who represents your company

 

3-D. Investors

Companies can be 100% owned by you or co-owned with other investors who can be both South Koreans and non-South Koreans. However, the bank reporting procedure is different depending on how much of the company is owned by non-citizens and non-residents.

 

i) Non-resident ownership  < USD 5,000: no reporting obligation

(Foreign Exchange Transactions Regulation (외국환거래규정) Article 7-2 (7))

ii) Non-citizen ownership ≥ KRW 100,000,000 AND non-citizen ownership ≥ 10% of shares: register with any major commercial bank in South Korea as a foreign-invested company

(Enforcement Decree Of The Foreign Investment Promotion Act Article 2 (2))

 

iii) All other non-resident investments: report non-resident securities acquisition to any major commercial bank in South Korea

(Foreign Exchange Transactions Regulation (외국환거래규정) Article 7-32 (2))

 

3-E. Licenses and Permits

Check whether your company requires licenses or permits. Companies in various industries, such as the finance, food, energy, construction, logistics, pharmaceuticals, and cosmetics industries, may require them. There are various possible license and permit requirements, such as having a minimum amount of capital or certain facilities, personnel, or equipment. Generally, licenses and permits must be obtained before registering the company at the tax office.

 

3-F. Documents

Prepare documents, such as a power of attorney, decision letter, passport copy, head office registration certificate, consent letter, proof of residence, and seal registration form. All documents must be notarized and confirmed by an apostille or consulate.

 

 

KIM Sang Kyoon (김상균, 金相均), Attorney at Law (Seoul Bar Association)

He specialized in corporate law and wrote a book about commercial registration. He has conducted a wide range of commercial activities, including incorporating corporations, raising capital in redeemable convertible preferred stock (RCPS), and providing corporate advice. He provides advisory and transactional services in both Korean and English to domestic and foreign clients. Please contact him to find out how he can help you achieve your business goals in South Korea.

 

Email (Korean and English): skkimlaw@naver.com 

Telephone (Korean only): +82-2-596-6720
Fax (Korean and English): +82-2-6008-6761
Address: 9th floor, 113 Seochojungang-ro, Seocho-gu, Seoul 06644, South Korea