International food export business enters South Korea
Mr Sweeney is a UK citizen. He wishes to expand his business to South Korea and approached Healy Consultants to meet his goal. He plans to incorporate a company that primarily engages in buying and selling of soft commodities (such as food products) to and from global companies located in Dubai and Austria primarily. When Mr Sweeney first call in, he emphasized his urgency to obtain this company because the company need to sign an important contract with his Client. Immediately after the call, Healy Consultants emailed Mr Sweeney with the list of documents needed to proceed with company formation.
Knowing Mr Sweeney needs the company urgently, Healy Consultants made several calls to the Korean Government and Korean banks immediate after receiving Mr Sweeney’s phone call, to confirm Mr Sweeney’ proposed business is allowed in Korea and is acceptable for bank account opening. Thereafter, Healy Consultants sent Mr Sweeney a detailed cost proposal to set up the South Korea Company. Following receipt of Mr Sweeney’ due diligence documents and fund transfer, Healy Consultants started to incorporate the company. At this point, our South Korean team, in consultation with our Singapore office, prepared a detailed Engagement Project Plan, outlining the project steps and deliverables from Healy Consultants, as well as likely timeframe to finish the whole engagements.
Healy Consultants began the incorporation process after the corporate structure is agreed by Mr Sweeney. For Global Commodities, Healy Consultants recommended a limited liability company (Yuhan Hoesa), which requires a minimum of two shareholders and one director. Yuhan Hosea is ideal for a small to medium-sized business as it has a simple corporate structure.
Healy Consultants started the incorporation procedure by checking the availability of Mr Sweeney’s preferred company name and within a day obtained a certificate of name availability for Global Commodities. Healy Consultants then filed the application package for incorporation and complete the court registration within three days.
Thereafter Healy Consultants completed the company tax registration in another three days. The whole incorporation process only takes around one week to complete.
Corporate bank account
After company formation, Healy Consultants proceed with the corporate bank account opening for the new company. Healy Consultants approached CitiBank Korea to apply for a corporate bank account for Global Commodities. Healy Consultants prepared a detailed business plan for Mr Sweeney’s company, providing comprehensive information on its activities, products and services, as well as its Clients and suppliers. Along with a completed corporate bank account application form, Healy Consultants visited CitiBank Korea Seoul branch and within the day, the bank approved and issued the bank account numbers together with the passbook and ATM card and internet banking token.
Other support services
To further support Mr Sweeney’s business engagement in Korea, Healy Consultants aids Mr Sweeney in many other related tasks. For example, Healy Consultants provided: i) full recruitment support, including hiring of local staff, advertising, interviews, shortlists, etc. ii) Sourcing for contractors to furnish Mr Sweeney’s office iii) contacts in Korea, e.g. suppliers, export agents iv) an introduction to existing Clients who operate in the same industry. Last but not least, to enable Mr Sweeney to work legally in Korea, Healy Consultants also assists Mr Sweeney and his family to obtain residency and working visa in Korea.
The whole company incorporation and bank account opening process takes approximately three months to complete from start to finish. Mr Sweeney’ timely response and co-operation was highly appreciated during the engagement.
Healy Consultants provides Mr Sweeney with a complete company kit including i) Original certificate of incorporation ii) Original Certificates of Business registration and bank kits (incl internet banking token, ATM card and passbook). For our continuous improvement, Healy Consultants also emailed Mr Sweeney an Engagement Feedback Survey for his completion.
Australian CEO potential in South Korea
Our Client Malcolm Davies is the CEO of a Sydney-based robotics technology firm. His Australian company has been carrying out research and development (R&D) of robotic and security systems for Australian firms for more than 20 years, and has an excellent reputation in its field. A strategic review of the company’s operations identified a need for the company to diversify its revenue sources in an increasingly competitive domestic market, and an executive decision was therefore taken to set up an overseas R&D facility.
Preliminary research by the company revealed strong potential in South Korea. Recent media reports have highlighted plans to build ‘Robot Land’, a US$530 million industrial city built specifically for the robotics industry, and which will include facilities for R&D and robot production. This long-term commitment to the industry, as well as the availability of grants and incentives to attract foreign investment in specific Free Economic Zones (FEZs), prompted Mr Davies to look for a corporate service provider who could assist his company effectively and transparently in a potentially ‘alien’ market. He contacted Healy Consultants, having found our website following a Google search, and was impressed with our capabilities. However, from the outset Healy Consultants warned him of complex and expensive South Korean setup procedures, as well as possible language difficulties in business in general.
However, Healy Consultants’ core strength is to provide workaround solutions to any obstacles during an engagement, and with this in mind Mr Davies agreed to commission Healy Consultants to conduct initial research into the ideal company type and location for any new company in South Korea. Mr Davies agreed to settle a retainer fee of US$2,000 for us to carry out the research. Healy Consultants employ qualified accountants with extensive knowledge of corporate and tax law in South Korea.
The focus of the initial research was on the three FEZs in South Korea, at Busan, Incheon and Gwangyang Bay, with the objective being to establish the advantages and disadvantages of each. Healy Consultants contacted the authorities of each FEZ by telephone to describe the intended business of Mr Davies’ company, and to find out if the company would qualify for tax exemptions and grants under South Korea’s foreign investment regulations. Healy Consultants prepared a comparison table of the three FEZs, which was sent by e-mail to Mr Davies in Australia for his perusal. It was quickly apparent that the Incheon FEZ would be an attractive location for Mr Davies’ company, from both a logistical and economic point of view. Located adjacent to Seoul’s Incheon international airport, it offers excellent communications infrastructure, and the Techno Park at the Songdo Intelligent City (within the Incheon FEZ) is being developed into a fully-fledged R&D community.
Having established the location of the company, the next step was to identify the optimum corporate structure. Foreign investment in South Korea is closely monitored by the government, which prefers foreign investment to take the form of a Stock Company (Chusik Hoesa). However, in our Client’s case, Healy Consultants recommended a limited liability company (Yuhan Hoesa), which requires a minimum of two shareholders and which, unlike a Chusik Hoesa, requires no board of directors. The Yuhan Hoesa is ideal for a small to medium-sized business such as Mr Davies’ company, because it is a more simple corporate structure. Having presented a proposal for a Yuhan Hoesa to Mr Davies, he signed our Client Engagement Letter and remitted the required funds (minus the US$2,000 retainer fee) to Healy Consultants’ corporate bank account to begin the process of company incorporation.
With this, Healy Consultants began preparations to form the Yuhan Hoesa in the Incheon FEZ. The first step was to apply for foreign investment approval for the project at the Ministry of Finance and Economy in Seoul. In addition to completing an application form, Healy Consultants prepared a detailed business plan (in the intended name of the company), highlighting its intended activities, information on its Clients and suppliers, as well as financial projections and information on the shareholders and directors. Healy Consultants also arranged translation of the business plan into Korean, a process which took 10 days. Approval was granted within 10 more days, following which Healy Consultants started preparing the memorandum and articles of association, as well as a statement on the amount and form of the proposed initial share capital. These documents were couriered to Mr Davies in Sydney for his signature and return to us. At the same time, Healy Consultants arranged to lodge the minimum capital of US$53,000 (which our Client had included in the engagement fees) at the Korea Exchange Bank, who issued a Certificate of Full Payment, which was immediately e-mailed to Mr Davies.
Meanwhile, Healy Consultants received the signed corporate documents from Australia within one week, and filed them at the Commercial Registrar’s Office in the Seoul District Court, who advised that the Certificate of Incorporation would be issued within one month. In practice, Healy Consultants received an e-mailed copy of the Certificate of Incorporation within two weeks. With company incorporation complete, Healy Consultants visited the Incheon FEZ Authority with a view to locating a suitable site for Mr Davies’ R&D facility. Since this was a critical phase, we had recommended that the Client now visit Seoul to meet with the FEZ authority, find a suitable facility and sign a lease/purchase agreement for an R&D centre.
According to a feasibility study commissioned by Mr Davies’ Australian company, as well as in-depth independent market research, it was decided to build a US$5 million R&D facility in the FEZ, and a letter of intent was signed by Mr Davies and the FEZ to this effect. With a suitable site identified, Mr Davies is currently seeking bank finance for the project.
Accounting and tax support
The next phase of the engagement was to register the company for tax at the District Tax Office in Seoul and obtain a tax identification number and business registration certificate. To achieve this, an application was submitted by Healy Consultants by mail, along with a copy of the lease agreement from Incheon FEZ. The certificate and tax identification number were received by Healy Consultants after 10 days.
To complete the current phase of the engagement, Healy Consultants provides a full virtual office for Mr Davies’ Korean operation, and will continue to do so until the R&D facility is completed. As well as a comfortable working base for Mr Davies when he is in the city, the office fields telephone calls and receives mail, forwarding phone messages to Mr Davies on the same day. When the R&D facility is complete, it is likely Mr Davies will require assistance with obtaining visas for foreign employees.
Import/export vehicles and vehicles part firm sets up business in South Korea
Our client is a company specialized in import and export of vehicles (buses, trucks, cars, tractors…), vehicle parts and accessories in Latin America. They contacted Healy Consultants for company incorporation and bank account opening in South Korea.
As usual, the engagement process started with the signing of the engagement letter and the completion of the standard due diligence. The engagement letter contained an attached strategy document in which Healy Consultants states i) our Client expectations, ii) Healy Consultants expectations.
The process of incorporation started lasted for 4 weeks counting from the moment Healy Consultants had all the due diligence from our client.
Incorporation in South Korea is a time consuming task so Healy Consultants sheltered our Client of travelling to South Korea for engagement completion. Healy Consultants prepared incorporation forms that were reviewed and signed by the Client, found suitable office premises and obtained a lease agreement necessary before incorporation. Only after these steps were complete, we could start with company incorporation process and registering the company with all the necessary Public bodies.
For our Client, confidentiality is very important so Healy Consultants acts as the director and shareholder of the company. A specific agreement was signed to ensure our client’s assets are fully protected.
Corporate bank account
Our Client was in a hurry to operate with the bank account. He was expecting a payment from one of his most important clients. Citibank was the entity chosen by the Client. Healy Consultants approached our contact in this bank. In general, banks continue to tighten corporate bank account opening procedures and in this case, Citibank required our Client to travel for successful corporate bank account opening. Despite the fact that Healy Consultants offered the Client US$500 discount for him to travel, the Client decided, as a short term solution, to open a corporate bank account with a local bank.
Healy Consultants recommended to open a corporate bank account with KEB, a local bank. The corporate bank account was opened within three days and the bank package containing the user name, passwords and general instructions were sent directly to the client.
After these weeks, Healy Consultants successfully finalized the engagement by sending the company kit to the Client through courier which contained all the originals documentation of the incorporation process.