Setting Up a Foreign Investment Company in Korea: Steps and Timeline

1. Overview of Foreign Investment Companies in Korea

Korea provides a welcoming environment for foreign investors, and establishing a foreign investment company is an effective way to enter the Korean market. A foreign investment company operates based on foreign capital, and the Korean government promotes this to drive economic growth and job creation.

2. Overview of the Establishment Process

Setting up a foreign investment company involves several steps. Here’s a general overview of the process:

1. Develop a business plan
2. Apply for corporation registration
3. Report foreign investment
4. Complete tax registration
5. Start operations

Each step is significant, and it is essential to follow the correct procedures.

3. Choosing a Corporate Structure

In Korea, foreign investment companies can be registered as either stock companies or limited liability companies. Stock companies are generally preferred by foreign investors due to their larger capital and limited liability for investors. In contrast, limited liability companies are easier to establish and manage.

4. Required Documents and Conditions

To establish a foreign investment company, the following documents are required:

• Business plan
• Corporation establishment agreement
• Investor’s identification and proof of address
• Capital verification document
• Other necessary documents

These documents may vary based on the requirements at each stage.

5. Foreign Investment Reporting Procedure

Foreign investment reporting must be conducted according to Korea's Foreign Investment Promotion Act, and investors should follow these steps:

1. Prepare the foreign investment report
2. Submit relevant documents
3. Confirm completion of the report

Once the report is completed, foreign investors can legally operate their business in Korea.

6. Tax Registration Procedure

After corporation registration, tax registration is required and is a critical step for business operations. The tax registration process includes:

1. Applying for corporation registration at the tax office
2. Obtaining a tax number
3. Preparing for VAT and income tax filings

Once tax registration is completed, regular tax filings must be submitted.

How Long Does Company Setup Take? The Steps Involved

This page does not state a fixed duration. Setup involves the steps below, and the time each takes depends on the competent authority and on whether documents need to be supplemented.

• Foreign investment report and issuance of the report certificate (KOTRA or a foreign exchange bank)
• Remittance and confirmation of the investment funds
• Incorporation registration at the court registry
• Business registration at the tax office
• FIE registration (the legal deadline is 60 days from the date the triggering event occurred; this is a filing deadline, not a processing time)
• D-8 visa review (visa issuance certificate application or direct application at immigration)
• Alien registration after entry (within 90 days)

Processing time at each step varies with the competent authority.

7. Post-Establishment Obligations

Foreign investment companies must comply with several obligations after establishment. These include:

• Accounting audits where required by law
• Tax filings and payments
• Maintaining foreign investor registration
• Compliance with business-related regulations

Diligently fulfilling these obligations contributes to the stability and credibility of the business.

8. Frequently Asked Questions

9. Support Services from Vision Administrative Office

Vision Administrative Office offers professional consulting and support for establishing foreign investment companies. We provide customized services tailored to our clients' needs and are committed to assisting in the successful operation of businesses in Korea.

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