South Korea is a high-tech economy jurisdiction. It is a world leader in the manufacture of electronics (mobile phones, semiconductor chips). Favorable business conditions attract the attention of foreign investors, who want to register a company in South Korea, to open a branch in South Korea. The EU-South Korea Free Trade Agreement (FTA), which entered into force in July 2011, further strengthened the position of the state as one of the leading business and investment strategists in the Asian region.
To register a company in South Korea. Benefits
- It is possible to register a company in South Korea remotely (without a personal visit to South Korea);
- 100% foreign ownership;
- In order to open a business in South Korea, 1 director is enough;
- A combined tax system, that allows a tax rate of 6% to 38% depending on the amount of income, as well as the absence of tax rates for income received abroad or domestically for representative offices of foreign companies;
To start a business in South Korea is possible by registering one of four legal forms:
- A corporation (to register a Local Corporation in South Korea);
- A private business;
- A branch;
- A representative office (to register a Liaison Office in South Korea);
Depending on the type of legal form of registration, it is possible to get different benefits for specific business tasks. As part of the support for a company registration in South Korea, YB Case specialists will provide legal advice on obtaining various advantages for specific business tasks, as well as legal support services in business registration in South Korea.
To establish a corporation in South Korea
In order to register a corporation in South Korea, you must understand, that this structure is the most serious of the possible for the establishment of foreign persons. Key points, when registering a corporation are:
- The most suitable form of company for working with investments;
- A responsibility is limited to investment capital;
- It is possible to authorize a person(s) separate from the founders to manage the company;
- A required capital from 79 thousand EUR ;
- A taxation for the corporation is from 10 to 22% depending on the amount of profit and applies to income received both within South Korea and abroad;
- With a profit of 1 million EUR, a tax rate of 20%;
Registering a private business in South Korea
It is possible to register a private business in South Korea, provided, that the founder is fully responsible for such a company. Key points of this type of registration:
- All profits of the company are distributed by the founder;
- Less demanding registration process;
- A taxation occurs at the level of personal taxation of the founder (for residents of South Korea also applies to income received abroad). The tax rates for Private Business in South Korea are from 6 to 38% depending on the volume of turnover;
- When applying income tax of 1 million EUR - the tax rate of 38%;
To open a branch in South Korea
- A simplified registration;
- Only profits made in South Korea are taxable;
- No requirements for an authorized capital;
- Tax rates are from 10 to 22%;
- When applying income tax of 1 million EUR - a tax rate of 20%;
- This type of business is suitable for investors, who plan to make a profit outside of South Korea and already have companies in other jurisdictions with more favorable taxation.
Registering a representative office in South Korea
Liaison Office in South Korea is a representative office of a foreign company, that is not allowed to conduct trading activities for profit. Such representative offices are allowed to conduct research, market research, quality control, advertising and other supporting activities. Also, such communication units cannot be used to store goods for sale.
- The most simplified registration process;
- The fastest registration deadlines;
- Not subject to income tax;
Depending on the goals of the business, it is possible to register a company in South Korea on more favorable terms, when choosing the right type of legal form for the company. On average, taking into account the requirements of the regulator and the process of considering applications for registration, the deadlines usually range from 2 to 8 weeks, depending on the type of company. It is possible to open a business in South Korea remotely. Find out more by contacting the company YB Case.