What Is a Liaison Office?
A liaison office (연락사무소) is a non-commercial presence that a foreign company establishes in Korea to conduct market research, build local relationships, and coordinate non-revenue activities on behalf of the parent company. It is the simplest and lowest-cost way for a foreign company to have a physical presence in Korea.
A liaison office does not generate revenue in Korea, cannot sign commercial contracts in its own name, and is not a separate legal entity. All its operating costs are funded by remittances from the overseas parent company.
Liaison Office vs Branch vs Subsidiary
| Entity Type | Revenue Allowed | Legal Entity | Registration | Visa |
|---|---|---|---|---|
| Liaison office (연락사무소) | No | No | KOTRA | D-7-2 |
| Branch office (지사) | Yes | No (extension of parent) | Court + tax office | D-7-1 |
| Local subsidiary (법인) | Yes | Yes | Court + tax office + KOTRA (FDI) | D-8 (investor) / E-7 (employee) |
Choose a liaison office when: you want minimal setup cost and compliance burden, you are in market research / pre-entry phase, or you only need a local contact point. Choose a branch or subsidiary when you intend to sell products or services, invoice Korean clients, or hire significant local staff.
Step-by-Step Setup Process
- Prepare parent company documents — Gather certified copies of the parent company's registration certificate, articles of incorporation, and financial statements. These must be apostilled (or notarized + consularized) in the home country.
- Translate documents into Korean — All foreign-language documents require a certified Korean translation. Use a licensed Korean translation service or a sworn translator.
- Register with KOTRA (Korea Trade-Investment Promotion Agency) — Submit the application at a KOTRA regional office or online portal. KOTRA is the sole registration authority for liaison offices. Processing takes 3–5 business days.
- Receive the KOTRA registration certificate (등록증) — This certificate is the official proof of your liaison office existence. You will need it for banking, lease agreements, and visa applications.
- Open a Korean bank account — Present the KOTRA certificate to a Korean bank (Shinhan, Kookmin, Hana, or Woori are common). Foreign company representatives may need to be physically present. Takes 1–2 weeks.
- Lease office space — A registered physical address is required. Virtual offices at shared office spaces are accepted by KOTRA as long as a lease agreement exists.
- Apply for D-7-2 visa for representative(s) — Once the liaison office is registered and has a physical address, the dispatched representative(s) can apply for the D-7-2 visa at the Korean embassy in their home country, or change status in Korea.
Required Documents
Documents from the Parent Company (Home Country)
| Document | Notes |
|---|---|
| Business registration certificate | Apostille required + Korean translation |
| Articles of incorporation | Apostille required + Korean translation |
| Most recent annual financial statements | Audited preferred; translated |
| Letter of dispatch (파견명령서) | On company letterhead; names the representative being sent to Korea |
| Board resolution or authorization letter | Authorizing the establishment of a Korean liaison office |
| Representative's employment certificate | Confirms 1+ year employment with parent company |
Documents Prepared in Korea
- KOTRA liaison office registration application form
- Office lease agreement (or virtual office contract)
- Representative's passport copy
D-7-2 Visa for Representatives
Foreign nationals dispatched to manage or work at a Korean liaison office of a foreign company apply for a D-7-2 visa (해외투자기업 파견자 중 외국법인 국내연락사무소 파견자).
D-7-2 Key Requirements
- Applicant must have been employed at the dispatching foreign company for at least 1 year prior to dispatch
- The liaison office must be registered with KOTRA
- Salary is paid by the overseas parent company (funds remitted to Korea)
- No separate Korean employment contract required
D-7-2 Required Documents (for visa application)
| Document | Notes |
|---|---|
| Passport (6+ months validity) | |
| KOTRA liaison office registration certificate | Copy of Korean registration doc |
| Letter of dispatch from parent company | Specifying role, salary, duration |
| Employment certificate (1+ year) | From parent company HR |
| Parent company registration certificate | Apostilled original or certified copy |
| Parent company financial statements | Most recent year, translated |
| Visa application form + photos | Standard Korean immigration form |
Duration and Renewal
D-7-2 is typically issued for 1–2 years. Extensions are possible as long as the liaison office remains registered and the representative's dispatch continues. There is no fixed maximum stay for D-7-2, and many liaison office managers maintain D-7-2 status for 5–10 years through repeated renewals.
Tax & Compliance Obligations
Corporate Income Tax
A liaison office has no taxable income in Korea as it cannot earn revenue. No corporate income tax return is required. However, if the NTS determines that the office has been conducting commercial activities, it may impose corporate tax retroactively based on estimated attributed profits.
Payroll Withholding Tax
Korean nationals hired by a liaison office are subject to Korean individual income tax. The liaison office must register as a withholding agent, withhold monthly income tax from Korean employees' salaries, and remit it to the NTS. Year-end tax reconciliation (연말정산) is also required.
For Dispatched Foreign Representatives
Foreign representatives whose salary is paid by the overseas parent (not from Korean sources) may be partially or fully exempt from Korean personal income tax under a tax treaty, depending on the dispatching country. Treaty benefits should be confirmed with a Korean tax accountant.
Annual Financial Reporting
While liaison offices are exempt from corporate income tax, KOTRA requires annual renewal of the registration. This involves submitting proof of continued activity, the office lease agreement, and a brief activity report. Failure to renew results in automatic deregistration.
Frequently Asked Questions
Can a liaison office sign contracts or earn revenue in Korea?
No. A liaison office is strictly prohibited from engaging in revenue-generating activities in Korea. It may not sign business contracts on behalf of the parent company or invoice Korean clients. Violating this restriction can result in the office being reclassified as a permanent establishment and subjected to Korean corporate tax.
What visa does the representative of a liaison office get?
The representative applies for a D-7-2 (Intra-Company Transferee — foreign company representative) visa. Requirements include at least 1 year of prior employment with the parent company and a KOTRA-registered liaison office.
How long does liaison office registration take?
KOTRA registration takes 3–5 business days once complete documents are submitted. Banking setup takes an additional 1–2 weeks. Total setup time from document preparation to operational status is usually 3–6 weeks.
Does a liaison office pay corporate tax in Korea?
No corporate income tax applies because a liaison office cannot generate revenue. However, it must withhold and remit payroll taxes for locally hired staff, and maintain basic compliance filings.
What is the difference between a liaison office and a branch office in Korea?
A liaison office cannot engage in commercial transactions; a branch office can. Branch offices register with the court and can sign contracts, earn revenue, and pay Korean corporate taxes. If your goal is revenue-generating activity in Korea, you need a branch office or subsidiary, not a liaison office.
Can a liaison office hire local Korean employees?
Yes. A liaison office can hire Korean nationals for administrative and support functions. However, Korean employees cannot perform commercial sales or contract work, as this would constitute a permanent establishment.
