Start a Business in South Korea
South Korea has today established itself as one of the world’s leading economies despite having a restriction on Direct Foreign Investment into the country. A strong interventionist government that dictates the policy and goals set for the local industry has not proved to be a hindrance for South Korea has the country has still managed to build a reputation for itself as a desirable investment hub. Foreigners who are interested in establishing a base of business operation in the South Korean market would need to be aware that foreign corporations are regulated by the Foreign Investment Promotion Act and the Commercial Act.
How to Establish a Local Corporation in South Korea
To register a local company in South Korea, investors would need to comply with the following criteria and ensure that all aspects are met with:
- Step 1 – Provide a notification of foreign investment, either via KOTRA or a foreign exchange bank
- Step 2 – Transfer the required investment fund. This can be done either via a foreign exchange bank or by carrying the money into the country physically through customs
- Step 3 – Register the intended company for incorporation at the registry office of the court in the relevant jurisdiction district.
- Step 4 – Notification of the incorporation and business registration to be done either via the tax office or KOTRA
- Step 5 – The paid-in capital needs to be transferred to the corporation’s bank account through the foreign exchange bank
- Step 6 – And finally, the last stage of the process would be the FDI company registration which can be done at the agency where the initial FDI notification was made
Types of Foreign Direct Investment in South Korea
For the investor who is keen on foreign directed investment, the options that are available in South Korea include the following:
- Acquiring the shares of stocks of a domestic company (this refers to the case where a foreigner purchases the shares or stocks of a Korean based corporation or a company that is run by the National Republic of Korea with the intention to establish a continuous economic relationship)
- Long-term loans (this includes loans with a maturity of no less than five years which is supplied to a foreign-invested company by an overseas parent company)
- Contribution to a non-profit corporation (recognized as a foreign direct investment when the non-profit organization has an independent research facility in the field of science and technology especially, provided that certain conditions are met and fulfilled)
About Osung Accounting Corporation
Osung Accounting Corporation has been a formidable accounting corporation in South Korea since 2008, and has been a helping hand for companies who have ventured into the Korean market to achieve major success. Foreign companies especially, that are planning to venture into South Korea would face various administrative, judicial and language barriers, which is why the assistance of professional companies like Osung Accounting Corporation comes in handy and can be a good business partner to have on your team. Our team of professional have the in-depth experience, one stop service practice, customer-oriented services and a powerful business network in Korea to help your business achieve success at its full potential.