Set up a company in South Korea.
An OECD member, top-12 global economy, and home to Samsung, LG, Hyundai, SK and POSCO. CIT rates increased by 1% in each bracket from 1 January 2026, ranging from 10% to 25% — with the Pillar Two QDMTT now operational for multinational enterprises. Foreign-friendly under the Foreign Investment Promotion Act, with a 19% flat tax option available for foreign employees up to 20 years.
The standard structure for foreign investors is a Jusik Hoesa (주식회사) — a Korean joint-stock corporation registered under the Commercial Act. You file an FDI notification under the Foreign Investment Promotion Act (typically via KOTRA or a designated FX bank), prepare and notarise the Articles of Incorporation, deposit the registered capital, register with the Court Registry, obtain the Business Registration Certificate from the National Tax Service (NTS), register for VAT, and complete registrations with the four social insurances.
Standard formation takes 4 to 8 weeks end-to-end. From 1 January 2026, Korea’s corporate income tax brackets each increased by 1 percentage point: 10% / 20% / 22% / 25% on a progressive basis, with the top bracket applying to taxable income above KRW 300 billion. A 10% local income tax surtax applies on top of CIT. The Pillar Two Qualified Domestic Minimum Top-up Tax (QDMTT) is now operational for multinational groups with €750m+ consolidated revenue. VAT is 10%.
Grant & Graham coordinates Korean formations through senior local counsel in Seoul, working alongside our Singapore office for broader APAC structuring. FIPA filing, KOTRA liaison, court registration, NTS Hometax, FX banking, social insurances, and ongoing tax, payroll and statutory compliance — coordinated end-to-end.
Progressive 10–25% CIT. QDMTT 15% from 2026. 10% VAT.
Korea operates a four-band progressive corporate income tax. The 2 December 2025 National Assembly increased every bracket by 1 percentage point from 1 January 2026. Most early-stage WFOEs benefit from the 10% rate on the first KRW 200 million of taxable income. Korea was an early adopter of Pillar Two — the Qualified Domestic Minimum Top-up Tax is now live for the 2026 fiscal year, ensuring 15% effective for in-scope MNEs. The local income tax surtax (10% of CIT) sits on top of every bracket. VAT is a simple 10% across the board with no reduced rates.
Other notable items: Pillar Two QDMTT 15% operational for MNEs with €750m+ consolidated revenue. 19% flat tax elective for foreign employees on Korean employment income (up to 20 years). WHT 22% on Korean-source other income for foreign corporations (treaty rates apply). VAT 10% standard; zero-rated on exports. Acquisition tax and property tax exemptions for qualifying foreign-invested enterprises (FIEs) for up to 15 years. ~95 double taxation treaties. K-IFRS accounting required for listed entities.
Nine reasons businesses choose South Korea.
An OECD economy with global brands, a deep technology base, and a sophisticated regulatory environment. For semiconductors, batteries, biotech, K-content, advanced manufacturing, and East Asia coverage, Korea is structurally hard to ignore.
5th globally for ease of doing business
Korea ranks 5th in the World Bank Ease of Doing Business index. Online tax administration via NTS Hometax (24/7). Court Registry processes digitised. Foreign Investment Promotion Act provides national treatment to qualifying FIEs. KOTRA acts as a single-window foreign investment agency.
Global tech and industrial brands
Samsung, LG, Hyundai-Kia, SK Hynix, POSCO, Naver, Kakao — Korea’s chaebol structure has built world leaders in memory semiconductors, OLED displays, EV batteries, shipbuilding, and steel. Strong domestic supplier ecosystems for foreign companies entering these supply chains.
Semiconductors & advanced manufacturing
Samsung and SK Hynix together produce ~70% of global DRAM memory. Yongin and Pyeongtaek host massive fab clusters. K-Chips Act provides 15% R&D tax credits for SMEs and 5% for large companies. National Strategic Technology designation unlocks enhanced credits. Critical positioning amid US-China semiconductor decoupling.
EV batteries & clean tech
Three of the world’s top six EV battery makers are Korean (LG Energy Solution, Samsung SDI, SK On). Korea is a critical node in global EV supply chains. Strong cathode/anode chemistry IP. Domestic auto industry (Hyundai-Kia) accelerating EV transition. Hydrogen economy roadmap actively funded.
FTAs & market access
Bilateral FTAs with the EU, US, UK, China, Singapore, Vietnam and many more — ~60% of Korean trade covered by FTAs. RCEP member. KORUS FTA gives tariff-free access to the world’s largest consumer market. KOREU FTA continues to provide preferential access to Europe.
K-content & cultural exports
From K-pop and K-dramas to webtoons and gaming, Korean cultural exports generate ~USD 14bn annually and continue to grow. Strong opportunities in entertainment, music, fashion, beauty, mobile gaming and digital content production with global distribution.
R&D intensity
Korea consistently ranks 1st or 2nd in OECD R&D intensity (~4.9% of GDP). National Strategic Technology tax credits provide up to 30–50% deductions for qualifying R&D. Strong patent output. Public/private collaboration ecosystem through KIST, ETRI, KAIST and major universities.
Free Economic Zones
Eight designated Free Economic Zones (Incheon Songdo/Cheongna/Yeongjong, Busan-Jinhae, Gwangyang, Daegu-Gyeongbuk, Saemangeum and others). Provide acquisition tax and property tax exemptions for up to 15 years for qualifying FIEs, plus rental subsidies and one-stop administration.
Digital infrastructure
World-leading fixed broadband, 5G penetration and digital government services. Highest fibre-to-the-premises rates of any major economy. NTS Hometax, Korea Online E-Procurement System (KONEPS), and government APIs make digital business operations meaningfully smoother than peers.
Six legal structures — one usually fits.
For most foreign investors, the Jusik Hoesa (KK) joint-stock corporation is the practical default. Yuhan Hoesa is a simpler LLC suited to small subsidiaries. Branch and Liaison/Representative Offices have specific narrow use cases. The Foreign Investment Promotion Act provides national treatment and FIE benefits to qualifying foreign-invested entities regardless of form.
Jusik Hoesa (KK)
The standard structure for foreign investors. No statutory minimum capital (operational reality KRW 100m+). At least 1 director (3 for companies with paid-in capital over KRW 1 billion). Statutory auditor required for KRW 1bn+ capital. Suited to operating companies, manufacturers, traders and IPO candidates.
Yuhan Hoesa
German-style LLC. Simpler governance than a Jusik Hoesa. No statutory minimum capital. Members rather than shareholders. Suited to small foreign-invested subsidiaries that don’t need stock issuance flexibility. Common for asset-holding and intra-group service entities.
Yuhan Chaegeum Hoesa
American-style LLC introduced under the 2011 Commercial Act revision. More partnership-like governance flexibility than Yuhan Hoesa. Less commonly used by foreign investors due to bank and counterparty familiarity preferences. Useful for specific JV or fund-related structuring.
Hapmyeong / Hapja Hoesa
General Partnership (Hapmyeong Hoesa) and Limited Partnership (Hapja Hoesa). Rarely used by foreign investors. General partners face unlimited personal liability. Suited only to specific professional services or family-business contexts. Not recommended as a primary FDI structure.
Branch Office
Branch of a foreign company conducting business in Korea. FX bank notification required. Taxed on Korean-source income at the same progressive rates as a Korean corporation. Branch profit tax (BPT) may apply where the foreign parent jurisdiction’s law allows. Generally consider a Jusik Hoesa subsidiary instead.
Liaison Office
Foreign company representation only. Cannot generate revenue or sign binding contracts. Limited to market research, parent liaison, networking. Notified through a designated FX bank rather than registered. From 2026, non-submission of operational reports triggers penalties up to KRW 10 million. Useful for initial market exploration.
FEZ-Registered Entity
Jusik Hoesa or Yuhan Hoesa registered in a designated FEZ (Incheon, Busan-Jinhae, Gwangyang, Saemangeum and others). Provides up to 15-year acquisition tax and property tax exemptions for qualifying FIEs, plus rental subsidies and one-stop FIE administration. Sector-specific FEZ alignment matters.
Talk to us first
Jusik Hoesa for 80% of cases. Yuhan Hoesa for small subsidiaries. Liaison Office for early market exploration. Branch only where parent-level booking is structurally necessary. FEZ where the 15-year tax exemption regime applies to your sector. Pillar Two scoping if you’re a €750m+ MNE.
Book a call →From decision to live entity.
The end-to-end registration sequence for a Korean Jusik Hoesa, coordinated by Grant & Graham and senior Korean counsel in Seoul. Standard timeline: 4 to 8 weeks end-to-end.
Structure & location
Jusik Hoesa (KK), Yuhan Hoesa, Yuhan Chaegeum Hoesa, branch or liaison office. Operating city — Seoul (head office for ~50% of national output), Incheon (FEZ + airport + Songdo), Busan (port + logistics), Daegu, Pyeongtaek (semiconductors), Suwon (Samsung). FIE qualification scoping under the Foreign Investment Promotion Act for tax/incentive eligibility.
FDI notification (FIPA)
Foreign Direct Investment notification under the Foreign Investment Promotion Act. Filed at a designated foreign exchange bank (FX bank) or via KOTRA. The minimum FDI threshold to qualify as an FIE is KRW 100 million. FIE status unlocks the acquisition tax / property tax exemptions and other indirect incentives. Confirmation typically issued within 3–5 business days.
Capital remittance
The foreign shareholder remits the registered capital to the temporary FX bank account in Korea (Won or USD/EUR converted on receipt). The bank issues the FX Remittance Certificate (외환매입증명서) confirming the inward capital flow — required documentation for subsequent court registration.
Articles of Incorporation & notarisation
Draft the Articles of Incorporation (정관) in Korean under the Commercial Act. Define purpose, share structure, directors, statutory auditor (if capital ≥ KRW 1bn), authorised capital, dividend rules, board governance. Articles must be notarised at a Korean notary public. Founders/promoters sign before the notary.
Court Registry registration
File the incorporation package with the competent Registry Office (관할 등기소) at the local district court. Articles of Incorporation, capital remittance certificate, director appointments and acceptance letters, address proof, payment of registration tax (incorporation tax of 0.4% on capital, with a 3x surtax in Seoul Metro). Certificate of Registration issued in 3–7 business days.
Business Registration Certificate (NTS)
Register with the National Tax Service to obtain the Business Registration Certificate (사업자등록증) and the Business Registration Number — the company’s tax identity. Filed via NTS Hometax. VAT registration completed at the same time. Typically issued within 1–3 business days from filing.
NTS Hometax →Convert temporary FX account to corporate account
Visit the FX bank with the Certificate of Registration and Business Registration Certificate to convert the temporary capital account into the company’s permanent corporate bank account. Online banking activated. Corporate credit card, payroll services, and FX services can be set up at this stage.
Four social insurances registration
Mandatory before hiring local employees: (1) National Pension (국민연금), (2) National Health Insurance (건강보험), (3) Employment Insurance (고용보험), (4) Industrial Accident Compensation Insurance (산재보험). Combined employer contribution typically 9–11% of gross salary in Seoul. Foreign employees may have specific exemptions under bilateral social security agreements.
NPS →Sector licences & permits
Sector-specific licensing as required: financial services (FSC), telecoms (MSIT), pharmaceuticals (MFDS), food safety, defence, electricity, broadcasting, education. Industries on the Foreign Investment Negative List (limited) require pre-approval. Most commercial activities are open to 100% foreign ownership.
KOTRA Invest Korea →Ongoing tax & statutory compliance
Monthly VAT returns. Quarterly withholding tax filings. Interim CIT return within 2 months of half-year-end. Annual CIT return within 3 months of fiscal year-end (4 months for consolidated). Mandatory external audit for companies above statutory thresholds. From 2026, MNEs in scope of Pillar Two must submit QDMTT notification to NTS by 30 June following the relevant fiscal year. Tax treaty benefit applications must now be formally submitted to the tax office (mandatory filing from 2026, not just record-keeping).
What it costs to incorporate & run.
All figures are indicative for a standard Jusik Hoesa in Seoul with one foreign corporate shareholder and KRW 100–500 million registered capital. Korea is mid-complexity by global standards. Registration tax scales with capital. Seoul Metro carries a 3x surtax on certain registration taxes.
One-time setup
Yuhan Hoesa typically €4,000–7,000 (simpler governance). Liaison office €2,000–3,500 (FX bank notification only). FEZ-registered FIE adds approximately €1,500–3,000 (FEZ administration + tax holiday qualification). Statutory auditor required for paid-in capital ≥ KRW 1 billion adds annual cost.
Ongoing monthly / annual
External audit mandatory for companies with assets ≥ KRW 50 billion, revenue ≥ KRW 50bn, employees ≥ 300, or for all listed companies. Transfer pricing documentation required for related-party transactions above thresholds. K-IFRS required for listed entities.
Get an estimate in 30 seconds.
Three quick questions. We will give you a realistic cost range and timeline for your situation, and route the answers straight into a fixed-price quote request.
Which company structure are you considering?
How is the shareholding structured?
What do you need from us?
The legal framework to know.
A summary of the core legislation governing companies in South Korea. Substantive work delivered through Grant & Graham and senior Korean legal, tax and accounting counsel in Seoul.
Corporate Law
- Commercial Act (상법)
- Civil Act (민법)
- Foreign Investment Promotion Act (FIPA)
Tax Law
- Corporate Tax Act (2026 amendments)
- Value Added Tax Act
- Income Tax Act
- Adjustment of International Taxes Act (Pillar Two)
Employment Law
- Labour Standards Act
- Minimum Wage Act
- Occupational Safety and Health Act
- Equal Employment Opportunity Act
Data Protection
- Personal Information Protection Act (PIPA)
- Network Act (information & communications)
- Credit Information Use & Protection Act
Foreign Exchange & FEZ
- Foreign Exchange Transactions Act
- Designation & Management of Free Economic Zones Act
- Special Tax Treatment Control Act
Intellectual Property
- Patent Act
- Trademark Act
- Copyright Act
- Unfair Competition Prevention Act
South Korea, answered.
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, sector, FIE qualification, structure preference, FEZ relevance, Pillar Two scoping, and tax position. Honest assessment of fit.
Recommendation
Senior advisory on the right structure (Jusik Hoesa, Yuhan Hoesa, branch, FEZ), city, capital level, FIPA notification, banking partner. Fixed quote in EUR or KRW.
End-to-end formation
FIPA filing, capital remittance, Articles drafting and notarisation, court registration, NTS Business Registration, VAT, 4 social insurances, sector licences. Seoul-coordinated through senior local counsel.
Ongoing support
Retained accounting, monthly VAT, quarterly WHT, payroll, social insurances, annual CIT return, statutory audit if applicable, Pillar Two QDMTT for in-scope MNEs, transfer pricing, PIPA compliance.
Ready to incorporate in South Korea?
Tell us in 25 minutes what you need. We will tell you honestly whether Korea is the right fit, which structure makes sense (Jusik Hoesa, Yuhan Hoesa, branch, FEZ), and how the 2026 tax changes affect your business — then handle the setup end-to-end through senior local counsel.