South Korea company registration

DOING BUSINESS IN SOUTH KOREA IN 2022

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	LLP
Entity locally known as	Yuhan Hoesa	Free Economic Zone Company	Branch office	RO	Hapja Hoesa
Best use of company?	SMEs	International Trading	Bank branches	Marketing	Professional Services
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	Woori Bank
Client must travel to Korea?	No	No	No	No	No
Can secure trade finance?	Yes	Yes	Yes	No	No
Limited liability entity?	Yes	Yes	No	No	Yes
GST payable on sales to local customers	10%	10%	10%	No	10%
Withholding tax on payments to overseas shareholders?	22%	No	No	No	22%
Average total engagement costs?	US$13,343	US$13,943	US$13,693	US$12,333	US$9,953
Average total engagement period?	4 weeks	4 weeks	5 weeks	5 weeks	4 weeks

See full table

Accounting and tax considerations	LLC	FTZ company	Branch Office	Rep Office	LLP
Statutory corporation tax payable?	20%	0% (for 3 years)	20%	0%	0%
Must file an annual Korea tax return?	Yes	Yes	Yes	No	No
Effective corporation tax rate on net profits of US$250,000	13%	0% (for 3 years)	13%	0%	0%
Must file annual financial statements?	Yes	Yes	Yes	No	No
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	No
This entity enjoys Government incentives?	Yes	Yes	Yes	No	No
Monthly GST reporting to the Government?	No	No	No	No	No
Legally tax exempt entity?	No	Yes (for 3 years)	No	Yes	Yes (if no services are provided in Korea)
Dividends received are legally tax exempt?	No	No	No	No	No
Company registration	LLC	FTZ company	Branch Office	Rep Office	LLP
Korea resident director\partner\manager required?	No	No	Yes	Yes	No
Minimum number of shareholders\partners?	1	1	Parent Company	Parent Company	2
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	No
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	No
Can have preference shareholders?	No	No	No	No	No
Business considerations	LLC	FTZ company	Branch Office	Rep Office	LLP
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	No
Good entity for trademark registration?	Yes	Yes	Yes	No	No

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	LLP
Government foreign investment approval is required?	No	Yes	No	No	No

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
Public register of shareholders and directors?	Yes
Banking considerations
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

Case study
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.
- Engagement planning
  - 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.
- Company incorporation
  - 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;

Tell us what you need - we’ll send you a customised proposal in 5 hours!

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Company purpose?
Will the LLC be a trading company or a holding company?
Will the entity be a subsidiary of a foreign company?
The LLC will be tax resident? Having local customers and local staff and local suppliers?
The entity will receive investment income or professional services fees or sales from trading with multi-national customers?
Is double taxation treaty access important?
Do you need our help to legally minimize your international tax obligations?
Do you need our help to increase e-commerce sales (click link)?
Company structure?
Will the shareholders be individuals or corporate?

In what country do you require a corporate bank account? Refer to this web page (click link) for ideas

Do you need multi-currency corporate visa debit cards?

Do you need a resident director?

Nationality of shareholders and directors?
Expected annual sales and net profits?
Does the entity need a special regulatory license or import or export license?
Additional comments?
Tell us about your existing business?
Name of your existing company?
Your business web site address?
What products and services does your company supply?
How many years are you operating this business?
Is your Firm regulated by a Government agency?
In what country are the majority of your customers?

In what country are the majority of your suppliers?
Tell us about you?
Your name?
Your email address?
What country are you based in?

Specifically, what deliverables (click link) do you need?
What is your US$ budget for the services you need?
What does quality customer service mean to you?
How do we contact you?
For now, do you prefer Healy Consultants PLC staff to phone you, or just email reply you with some corporate solutions?
If a phone call, on what number can our senior Consultant call you?
If an email, what email address can our Consultant email you at?
What alternative email address can our Consultant email you at?
What is your preferred date and time for a phone call?
In what language do you prefer we communicate with you?
What matters would you like to discuss during the call; the agenda?

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