Things To Know While Starting A Business in Korea As A Foreigner

Marketing Mirr Asia
May 22
2 min read

Updated: Sep 19

South Korea is one of Asia’s economic leaders, known for innovation, advanced technology, and a strong legal framework. With a GDP exceeding USD 1.6 trillion, strategic location, and well-developed infrastructure, the country offers attractive opportunities for foreign entrepreneurs.

However, starting a business in Korea as a foreigner requires navigating regulatory steps, cultural considerations, and compliance obligations. This guide outlines the key requirements and considerations to help you prepare.

Understanding the South Korean Business Environment

South Korea provides:

A transparent regulatory framework and efficient legal processes.
A highly skilled workforce and strong digital infrastructure.
Government incentives for high-tech, R&D, and foreign investors.

Major industries drawing foreign investment include technology and IT, manufacturing and automotive, biotech and healthcare, and e-commerce.

(Official reference – Invest Korea)

Choosing the Right Business Structure

Foreign investors can establish one of the following:

Corporation (Jusik Hoesa, 주식회사) – Common for medium to large businesses; requires at least one director and shareholder.
Limited Liability Company (Yuhan Hoesa, 유한회사) – Flexible, suited to SMEs.
Sole Proprietor (개인사업자) – Easy to set up but unlimited liability.
Branch Office – An extension of the foreign parent; requires notification through a foreign exchange bank, registration at the court registry, and registration with the tax office.
Liaison Office – Non-commercial; limited to research, liaison, or promotion.

Step-by-Step Company Registration

Step 1 – Foreign Investment Notification: File with a foreign exchange bank or KOTRA under the Foreign Investment Promotion Act.

Step 2 – Incorporation Registration: Register Articles of Incorporation and required documents with the district court corporate registry.

(Official reference – IROS – Supreme Court Corporate Registry)

Step 3 – Business Registration: Apply to the National Tax Service within 20 days of incorporation. The NTS issues the Business Registration Certificate and VAT registration (standard VAT rate: 10%).

Step 4 – Foreign-Invested Company Registration: Finalize with the bank/KOTRA to obtain foreign-invested company status.

Capital Requirements

No statutory minimum capital.
For a D-8 investor visa, a minimum foreign investment of KRW 100 million is required.
Banks may apply their own thresholds for account opening.

Taxation

Corporate Income Tax: Progressive rates from 9% to 24%, depending on income.
Value-Added Tax (VAT): Flat rate of 10%.
All companies must register with the National Tax Service.

(Official reference – National Tax Service (NTS))

Licenses and Permits

Certain businesses require additional approvals:

Food & Beverage – Food Service License.
Finance/Fintech – Financial Services License.
E-commerce – Telecommunications Sales Report under the E-Commerce Act.

Key Considerations & Incentives

Business Culture: Hierarchical and relationship-based.
Language Barrier: Korean is dominant; interpreters often needed.
Financial Incentives: Tax benefits, grants, and Free Economic Zone support.

Conclusion: How Mirr Asia Can Help

Starting a business in Korea requires careful planning — from choosing the right structure and meeting FDI requirements to securing permits and registering with tax authorities.

At Mirr Asia, we provide: