DOING BUSINESS IN SOUTH KOREA IN 2023
Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) South Korea business registration ii) business licensing iii) South Korea business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.
|Compare different South Korea entities||LLC||FTZ company||Branch Office||Rep Office||Cryptocurrency LLC|
|Entity locally known as||Yuhan Hoesa||Free Economic Zone Company||Branch office||RO||Yuhan Hoesa|
|Best use of company?||SMEs||International Trading||Bank branches||Marketing||Cryptocurrency trading|
|Legally tax exempt if properly structured?||No||Yes (for 3 years)||No||Yes||No|
|Corporate bank account location?||Woori Bank||Citibank||KEB Hana Bank||SCB Korea||NH Bank|
|Client must travel to Korea?||No||No||No||No||No|
|Can secure trade finance?||Yes||Yes||Yes||No||Yes|
|Limited liability entity?||Yes||Yes||No||No||Yes|
|GST payable on sales to local customers||10%||10%||10%||No||N/A|
|Withholding tax on payments to overseas shareholders?||22%||No||No||No||22%|
|Average total engagement costs?||US$13,093||US$13,943||US$13,693||US$12,333||US$29,560|
|Average total engagement period?||4 weeks||4 weeks||5 weeks||5 weeks||3 months|
|Accounting and tax considerations||LLC||FTZ company||Branch Office||Rep Office||Cryptocurrency LLC|
|Statutory corporation tax payable?||20%||0% (for 3 years)||20%||0%||20%|
|Must file an annual Korea tax return?||Yes||Yes||Yes||No||Yes|
|Effective corporation tax rate on net profits of US$250,000||13%||0% (for 3 years)||13%||0%||13%|
|Must file annual financial statements?||Yes||Yes||Yes||No||Yes|
|Investment income is legally tax exempt in Korea?||No||Yes (for 3 years)||No||No||No|
|Access to double taxation treaties?||Yes||Yes||Yes||No||Yes|
|This entity enjoys Government incentives?||Yes||Yes||Yes||No||Yes|
|Monthly GST reporting to the Government?||No||No||No||No||No|
|Legally tax exempt entity?||No||Yes (for 3 years)||No||Yes||No|
|Dividends received are legally tax exempt?||No||No||No||No||No|
|Company registration||LLC||FTZ company||Branch Office||Rep Office||Cryptocurrency LLC|
|Korea resident director\partner\manager required?||No||No||Yes||Yes||No|
|Minimum number of shareholders\partners?||1||1||Parent Company||Parent Company||1|
|Minimum number of directors/managers?||1||1||1||1||1|
|Minimum paid up share capital?||US$1||US$90,000||US$1||US$1||US$1|
|Shelf companies available?||Yes||No||No||No||Yes|
|Time to incorporate a new entity?||2 weeks||2 weeks||3 weeks||3 weeks||2 weeks|
|Can easily convert to a local PLC?||Yes||Yes||No||No||Yes|
|Can have preference shareholders?||No||No||No||No||No|
|Business considerations||LLC||FTZ company||Branch Office||Rep Office||Cryptocurrency LLC|
|Can invoice local customers?||Yes||Yes||Yes||No||Yes|
|Can hire local staff?||Yes||Yes||Yes||Yes||Yes|
|Can rent local office space?||Yes||Yes||Yes||Yes||Yes|
|This entity can secure a residence visa for business owner?||Yes||Yes||Yes||No||Yes|
|Good entity for trademark registration?||Yes||Yes||Yes||No||Yes|
|Korea has signed free trade agreements?||Yes|
|This country is a member of WIPO and TRIPS?||Yes|
|The country is a member of the ICSID?||Yes|
|Average customs duties suffered?||8%|
|LLC||FTZ company||Branch Office||Rep Office||Cryptocurrency LLC|
|Government foreign investment approval is required?||No||Yes||No||No||Yes, if share capital is more than US$100,000|
|Average monthly office rental? (US$ per sq m)||US$24|
|Minimum statutory annual salary?||US$11,294|
|Average monthly US$ salary for local employees?||US$3,180|
|Korea Won deposit interest rate? (1 year average)||2%|
|US$ deposit interest rate? (1 year average)||0.34%|
|Overseas remittance currency controls?||No||No||No||No||Yes|
|Public register of shareholders and directors?||Yes|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Good|
|Crowd funding available in this country?||Yes|
Setting up a South Korean LLC for crypto trading
In April 2021, our Client, a USA based company approached Healy Consultants Group PLC to assist with setting up a South Korean LLC for crypto trading.
Our Client provided all the due diligence documents required for company registration, signed the engagement letter and paid the first installment of our fees.
- Our Client travelled to South Korea and was in quarantine for 2 weeks.
- Meanwhile, Healy Consultants Group PLC reserved our Client’s preferred business name with the Ministry of Strategy and Finance.
- Healy Consultants Group PLC simultaneously prepared the registration forms to be signed by the Client
- Following completion of quarantine, we arranged for our client to meet with our Korean partner for signature of the registration documents.
- Our Client met with our Korean partner at his office and signed all the registration documents.
- Thereafter, we submitted them to the Ministry of Strategy and Finance to proceed with company registration.
- Two weeks thereafter, Healy Consultants Group PLC obtained the Certificate of Incorporation and Certificate of Business Tax registration documents.
Post company incorporation
- Healy Consultants Group then translated the company documents collated all corporate documents including certificate of incorporation, Certificate of Business Tax registration and company seal and handed them over to the Client at our Korea partner’s office.
- Our Client could now proceed with bank account opening sign contracts, issue invoices, receive funds and pay suppliers through their newly-opened corporate bank account;
- Our Client asked Healy Consultants Group PLC to timely accurately and completely discharge their monthly and quarterly and annual legal, accounting, audit and tax obligations;
- Healy Consultants Group PLC asked our Client for a professional reference;
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Useful links for South Korea
Government and public authority websites:
- Tax Authority
- Ministry of Finance
- Central Bank
- Stock Exchange
- Investment Authority
- Chamber of Commerce
- South Korea airports
- Visiting South Korea
- Doing business – Korea Economy Profile 2020
- Doing Business in South Korea
- South Korea – KPMG – Doing Business in South Korea
- South Korea – PwC South Korea flat income tax rate foreign workers
- Invest in Korea
- Korea Free Trade Zone
- Korea country profile
- 2019 Worldwide Corporate Tax Guide – South Korea
- PWC – South Korea Tax Summary
- Investment Global Forum – OECD