How To Register a Company in South Korea

Register a Company in South Korea

According to World Bank, Korea is one of the few countries that have successfully transformed itself from a low-income to a high income economy and is the 10^th largest economy in the world. It is considered one of the most innovative nations in the worlds as it is one of the most technologically advanced countries when it comes to day to day products and lifestyle of its citizens.

South Korea allows for the registration of not only local businesses established in the country, but also international businesses from various parts of the world. Here are the types of businesses that can be established in South Korea.

This is put in place by the government to allow foreigners to hold in business activities in Korea. And there are four ways through which this can be put in place.

1. Local Corporation: A Local Corporation is a local company with a foreign owner. The Foreign Investment Promotion Act in South Korea considers such company a foreign investment company. This allows such business to be a separate legal entity from its parent organization.
   1. Private Business: this kind of company is treated equally as a Local Corporation is, although starting this kind of business is less complex compared to a local corporation. The owner of a Private Business under the FDI takes all the profit and holds unlimited liability.
2. 1. Foreign Branch: This is a branch of a foreign company established in South Korea. It is not a separate entity from its parents company. In other words, the foreign company is liable for the debts of the branch without limitation. The company is not established locally, therefore, it is not considered a foreign investment company.
   1. Liaison Office: A Liaison office is like a branch office but established for non-profit purposes. They do not handle businesses in Korea but roles such as market research, business contacts etc. it is quite simple and less expensive to set up.

Once you have decided on the type of business you want to run in Korea, you can then apply for a certificate of Business registration.

The procedure to register a local corporation can be organized into four steps;

This is when a foreigner files a notification to the appropriate office on its intention to start a business in Korea. This can be done by proxy, on behalf of the real investor, but a power of attorney is needed in this case. The notification should be submitted to Invest KOREA, KOTRA’s overseas KBCs, designated head offices or branches of domestic banks and domestic branches of foreign banks.

The following documents are required for registration;

• Foreign investment notification form for acquisition of newly-issued shares or capital contribution (2 copies)
• Private investor – Documents verifying the nationality of the investor (copy of passport, etc.)
• Corporate investor – Certificate of incorporation (certificate issued by a foreign administrative agency, such as the Commerce Department)
• A power-of-attorney (when notification is made by a proxy)

• Incorporation Registration (Private Business Registration): This also can be done by proxy, on behalf of the business owner, but a power of attorney is needed in this case. The notification should be submitted to Invest KOREA, KOTRA’s overseas KBCs, designated head offices or branches of domestic banks and domestic branches of foreign banks.

The Incorporation Registration is divided into two which are –

• Incorporation by subscription: The promoter only acquires a portion of the stocks issued at the time of incorporation and offers the rest for subscription by shareholders.
• Incorporation by promotion: Promoters acquire all of the stocks issued at the time of incorporation.
• Business registration: The next step after notifying the concerned offices and incorporating your business is to register it.

Are you an entrepreneur looking to start a company in South Korea. Here are ways for how to register a company in South Korea.

•  Foreign investor or his/her proxy is required to file for a notification. if a proxy is used, the IDs of the applicant and the proxy, and the applicant’s seal should be presented along with the required documents.
•  Foreign investor or his/her proxy is then required to notify Invest KOREA or the qualified tax office which has jurisdiction over the business office (if the business office is in Seoul)
• Foreign investor or his/her proxy is expected to complete the registration within the registration period which is within 20 days from business commencement date
• Foreign investor or his/her proxy is expected to submit the required document for registration.  The required documents are:
  • Application for business registration (provided by Invest KOREA or the jurisdictional tax office).
  • Copies of business permits (in cases in which the concerned business requires permission, approval, or notification)
  • Copy of lease contract (if applicable)
  • Other Documents;
    • Notification of designation of a tax manager (when an investor is normally not present in the business establishment or resides in a foreign country for more than six months.
    • Joint venture agreement (notarization required), if such agreement was made.
    • Certificate of completion of foreign investment notification
    • Copy of certificate of foreign exchange purchase/deposit
    • Certificate of alien registration or copy of passport (when a company representative is not a resident of Korea);
•  Foreign invested company registration: A foreign investment company registration should be done in the Institution where the foreign invested company notification was filed or Invest KOREA within 30 days from the completion date of payment of investment object. The Required documents are;
• Application for foreign company registration
• Copy of certificate of business registration
• Copy of certificate of foreign currency purchase/deposit

The Procedure to register a branch:

1. An application for registration of a foreign company shall be filed by the representative of the company in Korea on behalf of such foreign company.
2. Registration period is within 3 weeks from the date on which the branch was established.
3. A branch Office shall effect the same registration as that of a foreign company  office of a company incorporated in Korea either of the same kind or of the kind which it most closely resembles and A foreign company shall register the governing law under which it was incorporated and the name and address of its representative in Korea.

As a business man/ woman, registering your business whether in your local country or internationally is very important. This is because registering your business establishes the business as a legal entity and gives it the right amount of protection under any grievances.