Business entities in South Korea

Business entities in South Korea

South Korea different business entity setup requirementsSouth Korean business setup is an interesting option for multinationals willing to tap into the dynamism or North Asian markets, but unwilling to face complex procedures they would encounter in Japan and China. The most common legal entity option for South Korean business setup is a limited liability company, but our Clients willing to raise funds will prefer the setup of a joint stock company. Our corporate Clients interested in South Korea company setup may also open a branch or a representative office in the country.

Limited Liability Company (Yuhan Hoesa)

  1. This is the most common entity used for starting a business in South Korea. As always, the company is an entity, separate from owners who, consequently, enjoy limited liability;
  2. A South Korean LLC must appoint i) a minimum of one director and one shareholder and ii) a minimum used share capital of US$10,000 while setting up a company in South Korea. A South Korean LLC can be incorporated within 1 week.

Branch Office

A Branch office is allowed to operate within the boundaries set by the parent company. A South Korean branch is allowed to invoice South Korean customers, sign local sales contracts, and receive income from customers.

Representative Office (RO)

While a South Korean representative office is 100% foreign owned and controlled, it is not permitted to make direct sales with South Korea. Such an office will only engage in activities such as i) promoting business of the parent company and ii) market research.

General Partnership (Hapmyong Hoesa)

In a general partnership, members include partners with unlimited liability. Each partner is jointly liable for debts incurred by the company as well as taxes. Transfer of ownership in this kind of company is limited, as unanimous consent of all members is required before this can be achieved.

Limited Liability Partnership (Hapja Hoesa)

In this partnership, members can have both limited and unlimited liability. The role of limited members in the company is limited to capital investment, while unlimited members bear the rights and responsibilities stemming from the company’s business. Limited members cannot carry out business on behalf of the company nor can they represent it in any way.

Joint Stock Company (Chusik Hoesa)

Stockholders in a joint stock company have liabilities limited to the extent of their capital investment in the company. Stocks are freely transferrable, though this can be subject to approval of the board of directors. These companies are required to hold shareholder meetings at least annually to discuss financial statement and dividends.

Detail
LLC
Branch Office
Rep Office
Total company set up costsUS$8,343USD12,310USD11,540
Subsequent annual costs (excl accounting and tax fee)US$0US$0US$0
How long to set the company up?2 weeks2 weeks2 weeks
How long to open company bank account?2 weeks2 weeks2 weeks
Issued share capital requiredUSD10,000NoNo
Allowed to sign sales contracts with South Korean clientsYesYesNo
Allowed to invoice South Korean clientsYesYesNo
Corporate tax payable in South Korea22%22%22%
Corporate bank accountSCB or HSBCSCB or HSBCSCB or HSBC
Can rent office premises in South KoreaYesYesYes
Allowed to import raw materials?YesYesNo
Allowed to export goods?YesYesNo
Can the entity hire expatriate staff?YesYesYes
Do you need to visit South Korea?NoNoNo
Resident director required?NoNoNo
Resident shareholder required?NoNoNo
Minimum number of directors111
Minimum number of shareholders111
South Korean resident company secretaryYesYesYes
Tax registration certificate requiredYesYesYes
Individual shareholders allowedYesYesYes
Corporate shareholders allowedYesYesYes
Public register of shareholders and directorsYesYesYes
How long to get work permit approved6 weeks6 weeks6 weeks
Statutory audit requiredYesYesYes
Annual tax return to be submittedYesYesYes
Access to South Korean double tax treatiesYesYesYes
Draft invoice

Contact us

For additional information on our business setup services in South Korea, you can email us at email@healyconsultants.com or phone us at +65 6735 0120. Address: 7F Taewha Building, 996-15 Daechi-dong, Gangnam-gu, Seoul, 135-502 South Korea. Alternatively contact our in-house country expert whose details are below: