Foreign Company Branch Office Registration in Korea: Commercial Act and FX Rules

Overview

Under Article 614 of the Commercial Act, a foreign company that wants to do business in Korea must appoint a representative and set up a business office in Korea (or have at least one representative with a Korean address), and must register at the office's location within 3 weeks of setting it up. Separately, Article 9-32 of the Foreign Exchange Transactions Regulation makes Chapter 9, Section 3 govern a non-resident that transfers funds to set up or run a branch or office in Korea, and Article 9-33 sets the establishment report.

This article follows the route for setting up a business office strictly by statutory provision. It centers on how the Regulation distinguishes a branch that carries out business activity from an office (liaison office) with a non-business function. General guides to liaison office setup and branch setup are in separate articles. What must be reported and which documents apply to your case should be confirmed with the receiving institution.

At a Glance

Scope of Activity

• Articles 614, 616 and 621 of the Commercial Act, Articles 3(1)(15), 3(1)(19)(ma) and 18 of the Foreign Exchange Transactions Act, and Articles 9-32 and 9-33 of the Regulation as they apply to a foreign company's Korean business office
• The test that separates a branch carrying out business activity from an office (liaison office) with a non-business function
• Out of scope: processing time, fees and service prices, investment by incorporating a company (Foreign Investment Promotion Act), and provisions whose text could not be checked

Who Qualifies

• Foreign companies considering a Korean business office (branch) to carry out business activity directly, such as signing contracts and generating sales
• Head-office staff who want to know the dividing line between starting with a liaison office and going straight to a branch
• Practitioners who need the Commercial Act registration duty and the Regulation's establishment report in order
• Executives wondering how the law treats a branch, including whether it is deemed a resident

Required Documents

• Establishment report form: Form 9-8 under Regulation Art. 9-33 (Form 9-9 for later changes)
• Head-office evidence: documents proving the name, location and main business of the foreign head-office entity (Art. 9-33(3)(1); confirm the specific documents with the receiving institution)
• Proof of permits under other laws: where another law requires a permit or the like for the setup, a copy of the document proving it (Art. 9-33(3)(2))
• Statement of business: a statement of the content and scope of the business to be carried on in Korea (Art. 9-33(3)(3))
• Where to file: in principle the designated foreign exchange bank; for non-banking financial, securities, insurance or businesses barred under other laws, the Minister of Finance and Economy
• Commercial Act registration prep: the registrable particulars in Article 614(2) and (3) (purpose, trade name, representative's name and address, head-office and office locations, governing law and so on) and the setup date (registration is due within 3 weeks of setup, so fix the reference date)

Application Process

1. Check eligibility — confirm your current status, career, degree and contract type match the requirements.
2. Prepare documents — foreign public documents need a translator's certification plus an apostille (or consular confirmation for non-member states).
3. Book a visit — reserve a slot at your Immigration Office via HiKorea (www.hikorea.go.kr), or file online where e-Application is available.
4. File and pay — submit the Integrated Application Form (Form No. 34) and pay the screening fee.
5. Review — respond to any request for supplementary documents within the deadline.
6. Result — on approval, the period of stay and status are granted; reissue your ARC if required.

Key Points

• Beware of dealing before registration: Article 616 of the Commercial Act bars continuing transactions before registration at the office location and makes anyone who deals in breach jointly liable with the company. Line up the signing schedule with the registration schedule.
• A branch is treated as a resident: Article 3(1)(15) of the Foreign Exchange Transactions Act deems a non-resident's Korean branch, field office or other office a resident, whether or not it has authority to act. Funds moving between head office and branch fall under the foreign exchange rules.
• Capital transaction report: Article 3(1)(19)(ma) defines acts and fund transfers relating to setting up, expanding or operating an office between a corporation's domestic head office, branch, field office or office and its overseas office as capital transactions (excluding fund transfers for upkeep expenses or routine transactions that the Presidential Decree specifies), and Article 18 requires such transactions to be reported to the Minister of Finance and Economy under the Presidential Decree, with provisos for post-reporting or exemption. Confirm with the receiving institution which applies.
• Status: Article 621 of the Commercial Act treats a foreign company as a Korean company of the same or a similar kind when other laws are applied.
• Documents issued in Korea must normally be dated within 3 months unless another validity period applies.
• Documents already on file in your alien registration record need not be resubmitted.
• Health certificates, drug test results and pre-employment medical reports must be submitted sealed by the issuing hospital (do not open).
• You must be in Korea when applying; leaving the country after filing may result in refusal.
• Screening fees are non-refundable once the application is accepted.
• The head of the Immigration Office may add or waive documents where necessary for review.

Frequently Asked Questions

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