What Is a Branch Office in Korea?
A branch office (지사, 지점) is a commercially active extension of a foreign company in Korea. Unlike a liaison office which can only perform non-commercial activities, a branch office can sign contracts, earn revenue, invoice Korean clients, and hire local staff for all types of work.
A branch office is not a separate Korean legal entity — it remains part of the foreign parent company. This means the parent company bears direct liability for the branch's obligations, and profits/losses flow to the parent's accounting. The branch pays Korean corporate income tax on profits attributable to Korean operations.
Branch Office vs Liaison Office vs Subsidiary
| Feature | Liaison Office | Branch Office | Subsidiary (법인) |
|---|---|---|---|
| Revenue allowed | No | Yes | Yes |
| Legal entity | No | No | Yes |
| Parent liability | Full | Full | Limited (to investment) |
| Registration authority | KOTRA | Commercial Registry (Court) | Court + KOTRA (FDI) |
| Corporate tax | None | Yes (Korean-source profits) | Yes (worldwide profits on Korean entity) |
| Manager visa | D-7-2 | D-7-1 | D-8 (investor) or E-7 |
| Setup cost | Low | Medium | Higher |
Step-by-Step Registration Process
- Prepare and apostille parent company documents — Business registration certificate, articles of incorporation, and recent financial statements from the home country. These must be apostilled for Hague Convention countries or consular-notarized for others.
- Translate all documents to Korean — All non-Korean documents require certified Korean translations.
- Register with the Commercial Registry (Court) — File the branch registration application at the local District Court Commercial Registry (등기소). This is the primary registration for a branch office and is legally required. Processing takes 5–10 business days.
- Receive the Corporate Registration Certificate (법인등기부등본) — This is the official proof of branch existence in Korea. Required for all subsequent steps.
- Register with the Tax Office (세무서) — Submit the business registration application to the local National Tax Service office within 20 days of commencing business. Receive a Business Registration Certificate (사업자등록증). Required for VAT registration and invoicing.
- Register for social insurance — Enroll the branch and its employees in Korea's four mandatory social insurances: national health insurance, national pension, employment insurance, and industrial accident compensation insurance.
- Open a Korean corporate bank account — Use the corporate registration certificate and business registration certificate to open accounts with a Korean bank. Takes 1–2 weeks.
- Apply for D-7-1 visa for dispatched managers — Once the branch is registered, dispatched foreign managers can apply for D-7-1 status.
Required Documents
For Commercial Registry (Court) Registration
| Document | Notes |
|---|---|
| Parent company business registration certificate | Apostille + Korean translation |
| Parent company articles of incorporation | Apostille + Korean translation |
| Board resolution authorizing Korean branch | Notarized; specifying branch address, name, representative |
| Appointment letter for Korean branch representative | Specifying the name, nationality, and authority of the branch head |
| Latest financial statements (audited) | 1–2 most recent fiscal years |
| Branch representative's passport copy | |
| Korean office lease agreement | Physical address required for registration |
| Court registration application form | Standard form available at the registry |
| Court registration fee | Approximately KRW 100,000–300,000 depending on capital |
For Tax Office Registration (Business Registration Certificate)
- Court registration certificate (법인등기부등본)
- Office lease agreement
- Representative's identification
- Business registration application form (사업자등록신청서)
D-7-1 Visa for Branch Managers
Foreign nationals sent by the parent company to manage a Korean branch office apply for the D-7-1 visa (주재, intra-company transferee). This is a specialized visa for employees of foreign companies transferred to manage their Korean branch or subsidiary.
D-7-1 Key Requirements
- Must have been employed by the dispatching foreign company for at least 1 year
- The Korean branch must be registered at the Commercial Registry
- Position must be managerial, executive, or requiring specialized expertise
- Salary paid by the foreign parent (dispatch arrangement); or a local Korean salary at or above the industry standard
D-7-1 Required Documents (Visa Application)
| Document | Notes |
|---|---|
| Passport (6+ months validity) | |
| Korean branch corporate registration certificate | Certified copy from court registry |
| Business registration certificate (사업자등록증) | From tax office |
| Dispatch letter from parent company | Role, salary, dispatch period; company letterhead |
| Employment certificate (1+ year) | Issued by parent company HR |
| Parent company registration certificate | Apostilled copy |
| Parent company financial statements | Most recent year; Korean translation |
| Visa application form + photos |
D-7-1 is typically issued for 1–3 years and is renewable for as long as the dispatch continues. There is no statutory maximum stay for D-7-1 status.
Tax & Compliance Obligations
Corporate Income Tax
A branch office is a permanent establishment and must file Korean corporate income tax returns. Tax is assessed at the applicable corporate rate (10% on the first KRW 200M; 20% on KRW 200M–20B; 22% above KRW 20B) on profits attributable to the Korean branch. The filing deadline is 3 months after the fiscal year end.
VAT (Value Added Tax)
If the branch sells taxable goods or services in Korea, it must register for VAT (부가가치세) and file quarterly returns. The standard VAT rate is 10%. Branches are entitled to claim input VAT credits on business purchases.
Withholding Tax on Dividends / Royalties
When the Korean branch remits profits to the foreign parent as "branch profits," Korea generally does not impose a separate branch profits tax. However, if the branch pays royalties or service fees to the parent, withholding tax (typically 10–22% depending on the applicable tax treaty) applies.
Payroll Taxes
Korean employees (and foreign employees hired locally) are subject to Korean individual income tax (근로소득세). The branch must register as a withholding agent, remit monthly withholdings, and complete year-end tax reconciliation (연말정산).
Frequently Asked Questions
Can a branch office in Korea earn revenue?
Yes. Unlike a liaison office, a branch office is authorized to conduct commercial activities, sign contracts, and invoice Korean clients. It is a permanent establishment subject to Korean corporate income tax on profits attributable to Korean operations.
What visa does a branch office manager get?
A foreign national dispatched to manage a Korean branch office applies for a D-7-1 visa. Requirements include at least 1 year of employment with the parent company and a court-registered Korean branch.
How long does branch office registration take in Korea?
Court registration takes 5–10 business days. Tax office registration takes 1–2 additional days. Total setup including banking is approximately 4–8 weeks from document preparation.
Does a branch office need to file a Korean corporate tax return?
Yes. A branch office is a permanent establishment and must file Korean corporate income tax returns annually. It must also register for VAT if it sells goods or services, and handle payroll withholding for all employees.
What is the minimum capital required to open a branch office in Korea?
There is no minimum capital requirement for a branch office. However, the parent company must have been in business for at least one year and have documented financial health. Branches are funded by remittances from the parent as needed.
What is the difference between a branch office and a subsidiary in Korea?
A branch office is not a separate legal entity — the parent company bears unlimited liability. A subsidiary is a separate Korean legal entity with its own capital and limited liability. Subsidiaries use KOTRA FDI registration; branches register at the Commercial Registry court.
