Korea entity setup guide
Setting up a company in Korea
A practical guide for foreign businesses: which structure to choose, what to decide before the paperwork starts, the usual incorporation sequence and what the first year of compliance looks like.
Step 1
Choose how you will be present in Korea
The right form depends on what the Korean operation will do, who will pay it, and how your group wants to account for it.
Liaison office
For research and liaison
A base for market research and communication with headquarters. It cannot carry out revenue-generating business in Korea.
- Revenue in Korea
- Not permitted
- Separate entity
- No
Branch office
The parent, operating locally
An extension of the foreign company that can do business in Korea. The parent remains directly responsible for the branch's obligations.
- Revenue in Korea
- Permitted
- Separate entity
- No
Subsidiary
A Korean company of your own
A separate Korean legal entity, usually a stock company (chusik hoesa) or a limited liability company (yuhan hoesa).
- Revenue in Korea
- Permitted
- Separate entity
- Yes
Step 2
Decide these before the paperwork starts
Each of these is cheap to get right at the start and slow to change once documents have been notarised, apostilled and filed.
Business activities
What will the Korean entity actually do?
The industry code follows the Korean entity's real activities, not the parent's. It affects licences, how the tax office benchmarks you and which incentives apply.
Read the article →Registered address
Where will the company be registered?
The address appears in documents prepared abroad, so it has to be fixed early. Shared offices can work, but the tax office may look closely at them.
Read the article →Banking
Global bank, Korean bank, or both?
Foreign-bank-only setups often struggle with social insurance debits, tax payments and tax refunds in Korea.
Read the article →Intercompany fees and VAT
Will your service fee qualify for 0% VAT?
A sales support entity paid on a cost-plus basis must meet four conditions for zero-rating, including reciprocity.
Read the article →Step 3
The usual incorporation sequence for a subsidiary
Every case differs in detail, but most foreign-owned subsidiaries follow this order. The registered office comes first because later documents refer to it.
We coordinate the sequence, prepare the Korean filings and tell your headquarters exactly which documents to sign, notarise or apostille, and when.
- Sign the lease for the registered officeThe address must be final before the parent prepares its documents.
- Prepare parent company and director documentsOften notarised and apostilled in the parent's or directors' home country.
- File the Foreign Investment ReportSubmitted to a designated foreign exchange bank under the Foreign Investment Promotion Act.
- Remit the investment capitalIn line with the Foreign Investment Report.
- Register the companyCorporate registration under the Korean Commercial Code.
- Obtain business registrationIssued by the tax office, which may check that the address supports the business.
- Open the corporate bank accountIn the new company's name.
- Move the capital into the new accountCompletes the capital flow started before incorporation.
Step 4
The compliance calendar after incorporation
From the first payroll onwards, Korean deadlines arrive every month. These are the main ones for a company with a December year-end.
| When | What is due | Who it concerns |
|---|---|---|
| Every 10th | Withholding tax return and payment for the previous month's payments | Any company paying salaries or certain fees |
| Every 10th | Social insurance contributions for the previous month, as billed | Companies with employees |
| 25 Jan · 25 Jul | VAT final returns for each half-year | VAT-registered companies |
| 25 Apr · 25 Oct | VAT preliminary returns or payments | VAT-registered companies |
| February payroll | Year-end tax settlement for employees, with statements filed by 10 March | Companies with employees |
| 31 March | Corporate income tax return for the previous year | December year-end companies |
Dates move to the next business day when they fall on a weekend or public holiday. Some small companies are notified of VAT preliminary amounts instead of filing. We keep the calendar for you and send what needs approval in advance.
Common questions
Questions foreign companies ask before setting up
How much capital does a Korean subsidiary need?
The Korean Commercial Code no longer sets a general minimum capital for a stock company. To be registered as a foreign-invested company under the Foreign Investment Promotion Act, however, the foreign investment generally needs to be at least KRW 100 million, and some licensed industries set their own capital requirements. The right amount also depends on how the entity will fund its first months of costs.
Can we use a serviced or virtual office as the registered address?
Often yes, and many new subsidiaries start that way. The tax office may still check whether real business is carried on at the address when it reviews the business registration, and some regulated industries have their own premises requirements. More on address selection.
Our group banks globally. Do we also need a Korean bank account?
Many foreign banks operate in Korea through Seoul branches, and in practice that can complicate automatic social insurance payments, tax payments and tax refunds. Many groups keep a global account for treasury and add a local account for Korean administration. More on banking.
Our Korean entity will only support the parent. Does it charge VAT?
A service fee charged to a foreign parent can qualify for 0% VAT, but only when all the statutory conditions are met, including reciprocity with the parent's country. It is worth confirming before the first tax invoice is issued. More on cost-plus fees and VAT.
Which industry code should we register?
The one that matches what the Korean entity will actually do. A sales support subsidiary of a software group, for example, is usually not a software developer itself. More on industry classification.
Can you keep the books in our group ERP and report in our format?
Yes. We can record transactions in your company's ERP system and prepare monthly, quarterly and annual reporting under K-IFRS or K-GAAP for your group reporting.
Tell us what you are planning
A short description of your business and timing is enough to start. Matt will reply with the steps that apply to you.