Good to know
Good to Know
- No Korean co-founder, nominee, or local sponsor is legally required — solo foreign founders can hold 100% ownership and be the sole director in most industries.
- There's a real gap between the official '2-week' government estimate and the 3–6 week (sometimes up to 8-week) timeline most foreign founders actually experience — the difference is almost always apostille/translation delays and bank KYC, not the government filing steps themselves.
- If you don't need FDI status or a D-8 investor visa, there's no statutory minimum capital — the KRW 100 million threshold only matters if you want FIPA 'foreign-invested company' recognition or investor-visa eligibility.
- Corporate bank account opening is frequently the slowest single step; Korean banks often require an in-person meeting with the legal representative, so plan travel or a trusted proxy around this early.
- All incorporation documents ultimately need to satisfy Korean-language legal drafting and Korean Commercial Code standards — articles of incorporation drafted abroad without Korean-law review are a common cause of rejection.
- The headline corporate tax rate isn't the full story: a roughly 10% local income surtax is added on top of the national CIT bracket rate, so budget for a noticeably higher effective rate than the headline number suggests.
- Freelancers doing B2B work with Korean companies will often see 3.3% withheld from each invoice automatically — this is a prepayment against your annual tax bill, not a separate tax, and gets reconciled (often refunded in part) when you file your comprehensive income tax return in May.
- Which visa you hold matters as much as which structure you pick: several common visa types cannot legally support sole-proprietor registration without extra Immigration authorization, whereas incorporating a company is generally more visa-flexible for founders.
- Sole proprietorship is fast and cheap to set up but gives zero separation between your personal assets and business debts — for anything beyond small-scale freelancing, most foreign founders in Seoul move to an LLC (Yuhan Hoesa) or Stock Company (Chusik Hoesa) fairly quickly.
Corporate Income Tax
- Rate Change Note
- National CIT bracket rates each rose by 1 percentage point for fiscal years starting on/after 1 January 2026 (previously 9/19/21/24%, now 10/20/22/25%).
- Structure
- Progressive national Corporate Income Tax (CIT), plus a separate local income surtax on top.
- Local Surtax
- A local income tax surtax of roughly 10% of the national CIT liability is added on top, so the effective combined rate is higher than the headline national bracket rate.
Brackets 2026
- National Rate Percent
- 10
- Taxable Income Up To
- ₩200,000,000
- National Rate Percent
- 20
- Taxable Income Up To
- ₩20,000,000,000
Next bracket up to KRW 300 billion
- National Rate Percent
- 22
Above KRW 300 billion (top bracket)
- National Rate Percent
- 25
Residency And Scope
- Non Resident With Pe
- A foreign company operating through a Korean branch/permanent establishment is taxed only on Korea-source profits, and branch profit remittances to a foreign head office can attract an additional branch profit tax (around 20%, or a reduced treaty rate) on top of regular CIT.
- Resident Corporations
- Korean-incorporated companies (including foreign-owned subsidiaries) are taxed on worldwide income.
- Non Resident Without Pe
- Korea-source income is instead taxed via withholding at the time of payment (dividends, interest, royalties, service fees), with rates often reduced under one of Korea's roughly 90-98 bilateral tax treaties if beneficial-ownership and documentation requirements are met.
Operating As A Company
- Taxation
- Taxed at the corporate level under the CIT brackets above (entity-level tax), separate from any personal tax the owner later pays on dividends drawn from the company.
- Liability
- Both stock companies and LLCs create a legal entity distinct from the owners, limiting financial exposure to the capital actually invested.
- Visa Link
- Incorporating a company is generally the path that supports business/investor visas (e.g. D-8 corporate investment visa) and typically doesn't require the founder to already hold a prior residency or business visa before incorporation — though a lawyer/notary and a registered local address are needed for the incorporation process itself.
- Foreign Ownership
- Stock companies and LLCs permit full (100%) foreign ownership in most sectors; a limited number of sectors (e.g. media, defense) impose foreign-ownership restrictions or require prior government approval.
Common Structures For Foreigners
- Stock Company / Chusik Hoesa (주식회사) — the most widely used corporate form, suited to raising capital, hiring at scale, or eventual public listing; allows 100% foreign ownership.
- Limited Liability Company / Yuhan Hoesa (유한회사) — simpler governance and compliance than a stock company, also allows 100% foreign ownership, popular with closely-held foreign-owned entities.
- Branch office — an extension of the foreign parent (not a separate Korean legal entity), taxed only on Korea-source income, but less flexible for long-term local operations and can trigger branch profit tax on remittances.
Core Incorporation Steps
Document Authentication (Home Country)
- Step
- 1
- Detail
- Parent company / individual documents (certificate of incorporation, passport, articles) must be apostilled (Hague Convention countries) or consular-legalized (non-signatory countries) before use in Korea.
Foreign Direct Investment (FDI) Notification
- Step
- 2
- Detail
- Required only if the investment meets FDI thresholds. Filed with Invest Korea / KOTRA's Foreign Investor Support Center or a designated foreign exchange bank before or immediately after capital transfer.
- Estimated Time
- About 1–5 business days for the notification itself
Remittance of Investment Capital
- Step
- 3
- Detail
- Funds are wired from overseas into a temporary/capital account at a Korean bank, or hand-carried and declared at customs.
Registration of Incorporation (District Court Registry, 지방법원 등기소)
- Step
- 4
- Detail
- This is the step that legally creates the company; articles of incorporation, shareholder list, office lease, and director ID documents are filed. Produces the 법인등기부등본 (Corporate Registration Certificate).
- Estimated Time
- Roughly 3–7 business days after complete submission
Typically 3–7 business days
- Name
- Notification of incorporation & business registration (tax office / National Tax Service)
- Step
- 5
- Detail
- Filed at any local tax office regardless of jurisdiction, using Form 73 under the Corporate Tax Act, to obtain the Business Registration Certificate and Business Registration Number.
Registration of Foreign-Invested Company (If FDI)
- Step
- 6
- Detail
- Filed with the same delegated agency (KOTRA/bank) where the original FDI notification was made.
Corporate Bank Account Opening
- Step
- 7
- Detail
- Requires full KYC review; Korean banks often require an in-person meeting with the legal representative or an authorized proxy. Frequently the longest and most time-sensitive step for foreign founders.
Entity Types Available To Foreigners
Jusik Hoesa / Chusik Hoesa (주식회사) - Stock Company
- Description
- The most common vehicle for foreign subsidiaries; suited to larger operations or those planning to raise capital via shares. A statutory auditor is required if registered capital exceeds KRW 1 billion.
Yuhan Hoesa (유한회사) - Limited Liability Company
- Description
- Simpler structure with a lower compliance burden; often preferred for smaller operations or holding structures.
Branch Office
- Description
- A legal extension of the overseas parent company, not a separate legal entity; the parent retains full liability for Korean operations. Used for market testing before full incorporation.
Liaison Office
- Description
- Non-revenue-generating presence used only for market research and business development; cannot conduct commercial transactions.
Filing Obligations
- Annual Corporate Return
- Corporate tax returns must be filed, and final tax paid, within 3 months after the fiscal year end (commonly a 1 Jan–31 Dec fiscal year).
- VAT
- Standard VAT is 10%. VAT-registered businesses generally file quarterly (companies) via the Hometax electronic system, with zero-rating available for exported goods/services and certain services billed to non-residents in foreign currency.
- Penalties
- Late filing can trigger penalties of up to roughly 20% of unpaid tax, plus daily late-payment interest.
- Interim Return
- A mandatory interim tax filing and payment is due within 2 months after the first 6 months of the fiscal year.
- Transfer Pricing
- Foreign-owned companies with related-party (intercompany) transactions face transfer-pricing documentation requirements, with thresholds and master-file expectations aligned to OECD BEPS standards.
- Business Registration
- Register the entity with the National Tax Service (NTS) district tax office; a business/company registration number is issued and doubles as the tax ID.
Practical Choice Freelancer Vs Company
- Incorporation Makes Sense When
- You want liability protection, plan to raise capital or bring on investors/employees, need a cleaner structure for a business/investor visa, or expect revenue/complexity that benefits from entity-level tax planning and treaty-based structuring.
- Sole Proprietorship Makes Sense When
- Small-scale, lower-liability-risk work such as individual consulting or freelance services, minimal startup capital, and no near-term need to raise investment, hire staff at scale, or sponsor your own investor visa.
Operating As Freelancer Sole Proprietor
- Taxation
- Business profits are taxed as personal income under Korea's progressive income tax brackets (6%–45%, plus roughly 10% local surtax on the income tax due), rather than at corporate rates.
- Korean Term
- 사업자 (sa-eob-ja)
- Annual Filing
- Sole proprietors/freelancers file a comprehensive personal income tax return (종합소득세) annually between 1–31 May for the prior tax year.
- Legal Liability
- No legal separation between the individual and the business — the owner carries full personal (unlimited) liability for business debts.
- Social Insurance
- Registered sole proprietors must generally contribute to the National Pension Service and National Health Insurance unless exempted under a bilateral social security agreement with their home country.
- VAT Registration
- VAT registration is generally required once trading; a simplified taxpayer regime with reduced compliance/rates applies below a revenue threshold that sources place at either roughly KRW 48 million or KRW 104 million depending on the specific business-type rules in effect — worth confirming current thresholds directly with the NTS or an accountant at registration time.
- Who Can Register
- Foreign nationals need an appropriate work-permitting visa (commonly F-2, F-4, F-5, F-6, D-8-4 startup, or D-8 corporate-investment) plus an Alien Registration Card (ARC) to register directly; without a qualifying visa, registration usually requires a lawyer or authorized agent acting on your behalf.
- Visa Restricted Groups
- Holders of certain visa types (e.g. D-2 student, E-2 language instructor, D-10 job-seeking) are generally not permitted to run sole-proprietor business activity without separate authorization from Immigration.
- Withholding On Domestic Clients
- Korean B2B clients paying a registered freelancer for certain service types commonly withhold 3.3% of the invoice at source; this is a prepayment reconciled against actual tax liability at annual filing, not an extra tax — foreign clients based outside Korea typically do not apply this withholding.
Foreigners can incorporate a company in Seoul with largely the same court/tax-office process as Korean nationals, plus two extra steps tied to the Foreign Investment Promotion Act (FIPA) if the investment qualifies as Foreign Direct Investment (FDI). There is no requirement for a Korean co-founder, local partner, or local sponsor — a foreign individual or foreign corporation can be sole shareholder and sole director.
Typical Cost
- Court Registration Fee
- ₩25,000
Basic incorporation registration cost cited around this range; some sources cite a percentage-of-capital fee (~0.4% of registered capital) with a higher practical minimum.
- All In Cost With Professional Services
- ₩5,000,000
Realistic all-in figure (government fees + notarization/translation + local lawyer/accountant fees) commonly cited by Korea-based incorporation specialists; ranges roughly KRW 3,000,000–8,000,000 depending on complexity.
- Government And Administrative Fees Total
- ₩1,000,000
Rough midpoint of commonly cited KRW 500,000–2,000,000 range for court/admin fees on a standard foreign-invested subsidiary, excluding capital and professional fees.
- FDI Minimum Capital If Seeking FDI Status Or D8 Visa
- ₩100,000,000
Not a fee — this is capital that must be paid in and remains in the company; required to be recognized as an FDI company and for D-8 investor visa eligibility.
Realistic Timeline
- Biggest Delay Factors
- Notarization/apostille or consular legalization of home-country documents, non-certified translations, articles of incorporation not meeting Korean Commercial Code drafting standards, and corporate bank account KYC (which alone can take 1–2+ weeks for foreign-invested companies).
- Typical Real World Range
- 3 to 6 weeks for most foreign founders once document authentication (apostille/consular legalization), Korean translation, and bank KYC delays are factored in; some sources cite up to 8 weeks for less-prepared applicants.
- Official Government Estimate
- Around 2 weeks for the full procedure per Invest Korea (FDI notification through business registration), assuming documents are ready and apostilled.
Capital Requirements
- FDI Status Threshold
- ₩100,000,000
To be recognized as a Foreign-Invested Company under FIPA (and to qualify for a D-8 investor visa), a foreign investor generally needs to contribute at least this amount and hold 10%+ of voting shares.
- Statutory Minimum For Standard Local Company
- None — South Korean law sets no general minimum capital for a standard local corporation.
Office Address Requirement
A registered office address in South Korea (physical or virtual) is mandatory and must be documented with a lease agreement before filing.
Documents Typically Required
Documents Typically Required
- Articles of incorporation (notarized, Korean-language or certified translation)
- Lease agreement for a registered office address in South Korea (physical or virtual office accepted)
- Shareholder list
- Passport or Alien Registration Card (ARC) of legal representative/director
- FDI notification/registration certificate and capital deposit certificate (FDI companies only)
- Power of Attorney if filing via a representative
Official Government Resources
- Invest Korea FDI Procedures
- https://www.investkorea.org/ik-en/cntnts/i-2557/web.do
- Invest Korea Incorporation Guide
- https://www.investkorea.org/ik-en/cntnts/i-351/web.do
- Note
- Invest Korea (run by KOTRA, the state trade-investment promotion agency) is the official one-stop FDI notification and support channel; the actual incorporation registration itself is filed at the competent district court registry and finalized at the local tax office / National Tax Service.
Local Partner Or Sponsor Requirement
- Details
- No Korean local partner, nominee shareholder, or sponsor is legally required to incorporate. Foreigners can own 100% of a Korean company in most industries; only a small number of restricted sectors (e.g. defense, broadcasting/media, certain agriculture) limit or condition foreign ownership.
- Required
- No
AI-generated estimateData refreshed July 2026
Sources cited for this category
These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.
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Data last updated July 2026 · Verify anything important.