Skip to content
South Korea

Steps to Set Up a Company:

South Korea

Choose a Business Structure

  1. Sole Proprietorship (개인사업자): Single owner, full liability.
  2. General Partnership (합명회사 - Hapmyeong Hoesa): Two or more partners, shared liability.
  3. Limited Partnership (합자회사 - Hapja Hoesa): General and limited partners.
  4. Limited Liability Company (유한책임회사 - Yuhan Chaegeum Hoesa): Separate legal entity, limited liability.
  5. Corporation (주식회사 - Jusik Hoesa): Separate legal entity, limited liability, suitable for larger businesses.
  6. Branch (지점): A branch of a foreign company operating in South Korea.
  7. Representative Office (대표사무소): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Prepare the Articles of Incorporation: Outlining the company’s structure and rules.
  3. Open a Bank Account: Deposit the initial capital required for the company type.
  4. Notarize the Articles of Incorporation: Required for corporations.
  5. Register with the Court Registry Office: Submit the incorporation documents and pay the registration fee.
  6. Obtain a Business Registration Certificate from the Tax Office: For tax purposes.
  7. Register for Value Added Tax (VAT) with the National Tax Service (NTS): If applicable.

Open a South Korean Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with South Korean Employment Laws

  1. Employment Contracts: Draft contracts that comply with South Korean labor laws.
  2. Register for Payroll Taxes with the National Tax Service (NTS): For tax withholding purposes.
  3. Register with the National Pension Service (NPS) and National Health Insurance Service (NHIS): For social security and health insurance purposes.
  4. Health and Safety Regulations: Follow guidelines from the Ministry of Employment and Labor (MOEL).

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the NTS.

Laws and Regulations to Consider

Corporate Law

  1. Commercial Act: Governs the formation and operation of companies.
  2. Civil Act: Governs contracts and obligations.

Tax Law

  1. Corporate Tax Act: Governs corporate income taxation.
  2. Value Added Tax Act: Governs VAT regulations.
  3. Income Tax Act: Governs income tax for individuals and sole traders.

Employment Law

  1. Labor Standards Act: Governs the terms and conditions of employment contracts.
  2. Minimum Wage Act: Sets minimum wage standards.
  3. Occupational Safety and Health Act: Sets health and safety standards for workplaces.

Data Protection Law

  1. Personal Information Protection Act (PIPA): Governs data protection and privacy.

Environmental Law

  1. Framework Act on Environmental Policy: Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Patent Act: Governs the protection of patents.
  2. Trademark Act: Governs the protection of trademarks.
  3. Copyright Act: Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in South Korea. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

When to Consider Setting Up a Company in South Korea:

  1. Strategic Geographic Location: South Korea’s location provides access to markets in East Asia and the broader Asia-Pacific region.
  2. Advanced Technology Infrastructure: South Korea is known for its advanced technology infrastructure, making it an attractive location for tech companies.
  3. Highly Skilled Workforce: Access to a highly educated and skilled labor pool, particularly in technology, engineering, and manufacturing.
  4. Strong Innovation Ecosystem: South Korea has a strong focus on innovation and technology, with numerous research institutions and tech hubs.
  5. Favorable Business Environment: South Korea offers various incentives for foreign investment and a supportive regulatory environment.
  6. Developed Infrastructure: South Korea has a well-developed infrastructure, including transportation, telecommunications, and energy.
  7. Stable Economic Environment: South Korea offers a stable macroeconomic environment with opportunities for growth.
  8. High Quality of Life: South Korea offers a high standard of living, excellent healthcare, and a vibrant cultural scene, making it attractive for expatriates and international employees.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in South Korea is the right move for your organization. 

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.