South Korea has a thriving economy and a business-friendly environment. If you wish to set up a business in the country, please find below more details…
South Korea, known as the "Asian Dragon" is deemed to be a global economic power. Its economy is very prosperous and open to foreign investment. If you want to set up a business there or invest in an existing company, South Korea is the right place for you. Opportunities exist in various fields. First of all, you should undergo a market study in order to determine the best formula. Seek information on the required formalities.
Good to know:
The South Korean government has taken a series of measures over the past few years in order to encourage more investment and entrepreneurship. The country specializes in various sectors, namely processing, electronics, food processing, engineering, etc.
You will need a business or partnership visa to set up or manage a business in South Korea as an expat. The application must be submitted to the Korean embassy or consulate in your country (see Visas section). You must also obtain a residence permit from the South Korea immigration services.
Types of businesses
You can choose among different types of businesses: the liaison office, the branch or the creation of a business entity. Your business will largely depend on your goals, tax implications and regulations in force in the country. Most expatriates begin with a liaison office which does not require registration formalities. However, you must register it with the national bank and to the tax authorities.
You can also open a branch with the help of the national bank. You can then register your business with the tax authorities and local government. As for commercial entities and limited liability companies, you will need a minimum capital of 50 million Korean wons (about 36,000 euros).
Moreover, the company status must be certified by a notary and a founder shall be appointed for registration. The Board of Directors of the company will then be responsible of its management.
Foreign companies operating in Korea are taxed only on income from domestic sources. The total amount of tax is deducted at source and paid to the government. Moreover, companies subject to value added tax (VAT) must register with the tax authorities within twenty days following the start of their activities. VAT will be levied on the supply of goods and services at the rate of 10%. Check with Korean taxation authorities before your start.