Korea


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Setting up a company in South Korea

When setting up a company you may want to consider these factors:

1. Business Factors

The industry and type of business Nationality of the headquarters/individual(s) and Presence of existing trade agreements or relationships

2. License and Product Approval

Ensure that your products can be lawfully imported into South Korea, that all legal requirements of customs and import laws are met, that you have all required licenses and permits to import and sell the products, and export and import documentation complies with Korean law.

3. Cultural Factors

Culture is always important. Korea is apparently one of the most homogenous countries in the world, and doing business in South Korea can be a challenge for many business visitors. Similar to Japan, 'face' is of great importance and acknowledging the business culture and etiquette will be important.

4. Language

The local language is Korean and as such local bodies and official documents will be in Korean. While international business is often done in English, getting many things done will always be easier with some local language ability.

5. Free Economic Zones

The Korean government has established a number of free economic zones that provide additional incentives and tax benefits to foreigners who are investing or starting a business in South Korea. Generally, South Korea requires the business, or the foreign investor, to be located within the free economic zone in order to receive the benefits.

Your Options

When setting up a company in South Korea you have three options:

Company
Foreign Branch
Liaison Office
This article provides a general guideline for
foreign businesses on entering South Korea for business purposes. In particular it looks at common pathways to establishing a business presence in South Korea, generally through a liaison office, branch office or subsidiary company. In addition various economic, tax and regulatory facts are provided throughout as a source of useful information to assist those who will enter the Korean economy. The guide also looks at some immigration requirements such as obtaining the appropriate visa status. Data is based on the time of writing this article, June 2015, or closest available dates. South Korea is part of the Korean Peninsula situated between China and Japan. It is formally the Republic of Korea and governed by a democratic government. According to the CIA World Factbook, over the past decades the nation has worked towards global integration and seen incredible growth, becoming a high-tech industrialized economy. South Korea will host the 2018 Winter Olympic Games.
Population
50 million
Capital
Seoul
Official language
Korean
Calling code
+82
Timezone
UTC+9
Currency
? Won (KRW)
Nominal GDP
$1.435 trillion ($28,338Per capita)
Domain
.kr
The Korean economy continues to grow with the size of the economy ranking as one of the world's largest economies. The country has a high standard of living, education and income levels and is well known for global high-tech companies such as Samsung, Hyundai-Kia and LG. There are three types of business forms available to foreign companies in South Korea. Each of these business forms has distinct advantages and disadvantages, as well as differing scope of business activities, registration requirements and minimum capital requirements. In most cases it will depend on the degree of commitment a company has to South Korea and the planned business activity.

Requirements/Restrictions

A foreign owned local corporation is recognized as a 'foreign investment' under the Foreign Investment Promotion Act in South Korea. According to InvestKorea, the company must invest at least 100 million won. If an investee corporation is a private business, the company cannot issue a business investment (D-8) visa. A trade (D-9) visa shall be issued if it invests KRW 300 million or more. Foreign investors and foreign-invested companies are of separate entities (independent accounting & settlement). Shares in Korean companies do not have to be held by Korean resident shareholders.