Company Registration in Korea for Foreign Investors

How Foreigners Can Start a Business in Korea

South Korea is one of Asia’s major economic hubs and an attractive destination for foreign investors and international companies. Foreign individuals and overseas companies often enter the Korean market by establishing a local subsidiary, registering a branch office in Korea, or opening a representative office in Korea.

Choosing the appropriate business structure is an important legal decision because it affects taxation, liability, and operational flexibility.

Foreign investors typically choose one of the following three structures.

1. Company Registration in Korea (Foreign-Invested Company)

Local Subsidiary in Korea

A foreign-invested company is a Korean company established by a foreign individual or foreign corporation.

This structure allows foreign investors to:

• conduct full commercial activities in Korea

• sign contracts under a Korean legal entity

• hire employees locally

• open corporate bank accounts

• establish long-term operations in Korea

Most foreign investors establish either a Joint Stock Company or a Limited Liability Company under Korean corporate law.

2. Branch Office in Korea

Branch of a Foreign Company

A branch office in Korea is an extension of the foreign parent company rather than a separate legal entity.

A branch office may conduct business activities in Korea but remains legally part of the foreign headquarters.

Foreign companies often choose a branch office when they want:

• direct control of Korean operations

• to conduct business without forming a local subsidiary

• to operate Korean activities under the foreign headquarters

3. Representative Office in Korea

Representative Office or Liaison Office

A representative office in Korea (also called a liaison office) is typically used for non-commercial activities.

A representative office cannot conduct revenue-generating business operations in Korea.

Typical activities include:

• market research

• communication with local partners

• marketing or promotional activities

• coordination with headquarters

This structure is often used when a foreign company wants to explore the Korean market before making a full investment.

Subsidiary vs Branch Office vs Representative Office

Subsidiary (Foreign-Invested Company)

• Separate Korean legal entity

• Can conduct full commercial activities

• Suitable for long-term operations

Branch Office

• Part of the foreign company

• Can conduct business in Korea

• Not a separate legal entity

Representative Office

• Non-commercial presence

• Cannot generate revenue

• Used mainly for research and coordination

Minimum Capital and Foreign Investment Threshold

Minimum Capital Requirement

There is no general statutory minimum capital requirement for incorporating a company in Korea under the Korean Commercial Act.

In practice, when foreign investors initially establish a company in Korea to start business operations, it is common to incorporate the company with approximately KRW 10 million (roughly equivalent in USD) and later increase the capital through additional investment when the business expands.

Foreign Direct Investment Threshold

Under the Foreign Investment Promotion Act, a foreign investment is generally recognized as foreign direct investment (FDI) when the foreign investor contributes at least KRW 100 million and satisfies certain equity requirements.

Accordingly, KRW 100 million is not the minimum capital required to establish a company, but rather the threshold for recognition as a foreign-invested company under the FDI framework.

Practical Meaning of the KRW 100 Million Investment

An investment of KRW 100 million or more is commonly associated with:

• recognition as a foreign-invested company

• eligibility for certain foreign investment support systems

• practical review in connection with the D-8 business investment visa

However, a foreign investor may still establish a Korean company with less capital if the investment does not seek recognition as FDI.

General Procedure for Company Registration in Korea

1. Determine the business structure

Foreign investors decide whether to establish a subsidiary, branch office, or representative office.

2. Foreign investment notification

If the investment qualifies as FDI, the investor submits foreign investment notification through a designated foreign exchange bank.

3. Investment remittance

Investment funds are transferred to Korea.

4. Corporate registration

The company or branch office is registered through the Korean court registry.

5. Business registration

The entity must obtain tax registration and begin operations.

Frequently Asked Questions

Can a foreigner start a company in Korea?

Yes. Foreign individuals and foreign companies may establish a Korean company, branch office, or representative office.

How long does company registration take?

The incorporation process generally takes about 2–4 weeks depending on documentation and administrative procedures.

Is there a minimum capital requirement in Korea?

There is no general statutory minimum capital requirement, although the amount of capital should be appropriate for the planned business activities.

What is the KRW 100 million investment rule?

The KRW 100 million threshold generally applies to recognition as foreign direct investment (FDI) under Korean law.

Legal Basis and Relevant Laws

The establishment of companies and foreign business presence in Korea is mainly governed by the following laws:

Foreign Investment Promotion Act

Regulates foreign direct investment and foreign-invested companies.

Commercial Act

Governs incorporation and corporate structure in Korea.

Foreign Exchange Transactions Act

Regulates foreign exchange transactions and branch establishment by foreign companies.