How to Establish a Local Corporation in Korea

Establishing a local corporation involves four steps: ① foreign investment notification ② incorporation registration (private business registration)...
December 16, 2023

Establishing a local corporation involves four steps: ① foreign investment notification ② incorporation registration (private business registration) ③ business registration (at a jurisdictional tax office) and ④ foreign-invested company registration.

The procedure for foreign nationals is similar to that for Korean nationals, with the addition of foreign investment notification before incorporation registration and foreign-invested company registration after incorporation registration.

1. Notification of Foreign Investment

(1) Notifying Parties: Foreign investors or their proxies. A power of attorney is required when filing notification through a proxy.

(2) Where to Notify: KOTRA, KOTRA’s overseas investment KBCs, designated head offices or branches of domestic banks, and domestic branches of foreign banks.

(3) Required Documents: Notification form for foreign investment through stock acquisition (or contribution) – 2 copies. Private investors must provide a copy of their passport to verify their nationality. Corporate investors must provide a certificate of incorporation issued by a foreign administrative agency, such as the Commerce Department. If filing by proxy, a power-of-attorney is required. Processing is immediate.

2. Remittance of Foreign Investment Capital

(1) Foreign investment capital can be remitted to domestic banks from overseas or hand-carried through customs. If hand-carrying foreign investment capital through customs, file a declaration at the customs office and receive a certificate of declaration of foreign currency.

(2) Remittance account. A non-resident account in foreign currency can be opened, or a temporary account number issued by the designated foreign exchange bank can be used to remit funds. When using a temporary account number, investment capital can be remitted and received with only the name of the recipient and information on the recipient bank.

(3) The foreign investment capital that has been remitted will be converted into Korean currency and transferred to a securities subscription deposit account.

(4) Once the transaction is complete, the bank will issue a securities subscription deposit certificate, which is necessary for incorporation registration.

Banks may require notarized copies of various documents, such as the articles of incorporation, inaugural meeting minutes, minutes of the board of directors meeting, and certificate of stock receipt, in order to issue a securities subscription deposit certificate. It is important to check the list of required documents beforehand.

3. Incorporation registration

The Commercial Act recognizes five types of companies: general partnerships, limited partnerships, stock companies, limited companies, and limited liability companies.
Due to the complexity of the incorporation registration process, it is advisable to consult a lawyer or legal executive.

4. Business registration

Foreign investors or their proxies are required to file registration. If a proxy is used, the personal identification of the applicant and the proxy, along with the applicant’s seal, should be presented along with the required documents. The notification should be made to KOTRA or the tax office with jurisdiction over the business office. If the business office is in Seoul.

5. Registration of Foreign-Invested Companies

(1) Registration Location: The registration can be filed at the institution where the foreign invested company notification was filed or at KOTRA.

(2) Registration Deadline: The registration must be completed within 30 days of the payment for the investment objects.

(3) Required Documents

  • Application form for foreign-invested company registration
  • Copy of certificate of business registration
  • Copy of certificate of foreign currency purchase/deposit
  • Power of attorney (if the application is filed by a proxy).

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