Registration of a Limited Company (“Yuhan Hoesa”) in South Korea. Service offer

The establishment of a South Korean company by a foreigner is governed by the Foreign Investment Promotion Act and the Trade Act. For a company to qualify for the regimes under the Foreign Direct Investments (FDI) legislation and to be considered a foreign-invested company, it must meet two key conditions:

The minimum investment per foreign investor is KRW 100 000 000 (~ USD 68 680). If several foreign investors are planning to invest jointly, this minimum investment requirement will apply to each of them.

The minimum number of voting shares to be acquired by a foreign investor is 10% of all voting shares in a company.

These requirements must be met at all stages of the company’s life. If a company is registered as a foreign-invested company but later ceases to meet either of the above requirements, the previously held investment will continue to be considered as FDI, but the company will not be eligible for a full range of FDI incentives. For example, the company’s management and technical staff may be denied an extension of their stay in the country.

Before proceeding to company registration and remitting investment capital, the investor must notify KOTRA (Foreign Investor Support Centre of the Korea Trade-Investment Promotion Agency – KOTRA) or a specialized bank. The notice must be accompanied by the investor’s proof of identity and a document certifying the value of the object of investment.

The investment capital can be remitted either by wire transfer to a temporary account at a specialized South Korean bank or be paid in cash, with cash funds to be declared at the South Korean customs office.

The application for incorporation of a company together with supporting documents (in particular, a certificate of deposit of payment for shares or, for companies with a share capital of less than KRW 1 billion, a bank account statement) must be submitted to the court office.

For certain types of activities, once registered, a company will need to apply to the competent authority for authorization to carry on that activity. The application processing time may vary significantly depending on the type of activity.

Examples of business activities that require authorization:

• Cosmetics manufacturing,
• sales and import of cosmetics,
• food manufacturing,
• sales of medical equipment,
• medical equipment manufacturing,
• sales and import of medical equipment,
• mail-order sales (including e-commerce),
• restaurant business,
• accommodation business,
• sales of health food,
• sales and import of health food,
• travel business,
• attraction of international patients,
• import of liquor,
• job placement, etc.

The technical requirements for the premises will vary depending on the company’s activity and the size of business.

If the office is to be purchased, it will be necessary to file a notice of acquisition of property with the municipality of the city/county/district where the property is located within 30 days from the purchase date.

Notice of company incorporation filed with the tax authorities must be accompanied by supporting documents:

• Articles of association of the company
• Office lease or office purchase agreement
• Certificate of incorporation of the company
• List of shareholders
• Foreign currency purchase certificate
• Authorization from the competent authority (if required for a specific type of activity)
• Passport of the company representative

Once the company has been incorporated and notification has been filed with the tax authorities, an account at a specialized bank must be opened. In doing so, it is important to choose a bank carefully since opening an additional account at another bank is restricted for 20 business days from the first corporate account opening.

Depending on where the original notification of investment was made, the application for registration as a foreign-invested company will need to be filed either with KOTRA or with a specialized bank. The registration as a foreign-invested company must be completed within 60 days of payment for the object of investment (i.e. payment for the company’s shares).

The application should be accompanied by supporting documents:

• Certificate of incorporation of the company
• List of shareholders
• Certificate of business registration
• Foreign currency purchase certificate

Minimum wages for employees*:

*Based on 209 hours per month, for 2025.

To proceed with company registration in South Korea, you will need to:

1) tell us:

• proposed company name to be checked for availability for registration (preferably at least three names);
• company structure (director, shareholder);
• share capital and distribution of shares between the shareholders (taking into account the minimum investment requirements);
• proposed activity and geography of business.

2) pay fees for services.

3) provide documents for the directors*/shareholders.

*A company must have at least 1 director. There are no requirements as to the citizenship or residency of the director.

The list of required documents will be provided separately (it will not be an exhaustive one as authorities may at their discretion request additional documents at any stage of company registration).

The approximate timeframe for registering a foreign-invested company in Korea is from 1 month.

South Korean foreign-invested companies enjoy a unified tax deduction system. This system provides that the amount of a company’s investment in tangible assets for business purposes is multiplied by the tax rate, and the resulting amount is deducted from the company’s corporate income tax.

The corporate income tax rate is progressive:

• 9% - for taxable base equal to or less than KRW 200 million (~ USD 137 350);
• 19% - for taxable base from KRW 200 million to KRW 20 000 million (~ USD 13 735 320); 21% - from KRW 20 000 million to KRW 300 000 million (~ USD 206 029 830);
• 21% - from KRW 20 000 million to KRW 300 000 million (~ USD 206 029 830);
• 24% - over KRW 300 000 million.

There are also tax incentives for small and medium-sized foreign-invested companies (SME).

A foreign-invested company is required to keep accounting records.

The following limited companies must also have their financial statements audited by an external auditor if they meet certain conditions:

• Total assets are at least KRW 12 000 000 000 (~ USD 8 241 190)
• Total debt is at least KRW 7 000 000 000 (~ USD 4 807 360)
• Total sales are at least KRW 10 000 000 000 (~ USD 6 867 660)
• More than 100 employees
• More than 50 members (investors)

*The fees are valid as of March 2025.

*For reference only. The list is not exhaustive.

*For reference only. The list is not exhaustive.