Expats Doing Business in Korea (Part 2 of 3)
Upon arriving in Korea, many foreigners may decide they’d like to join the fast paced Korean economy and establish their own corporation here. Like starting a business anywhere, there can be many barriers in doing so, specifically lack of capital and knowledge — issues that face fledgling businesses in any country. Of course there are other obstacles more specific to doing business in Korea, such as issues to do with visas and local business laws.
But it’s not impossible. Did you know legally you can establish a company by yourself without any capital in Korea? No, I’m not kidding.
The following is my procedure to establish your domestic business, if for example, you had just touched down in Korea yesterday:
- Get an address (home address in your Home country) certificate from your embassy in Korea
- Get a virtual office address to fit your business scope
- Visit a notary office to have documents notarized and to wade through a lot of red-tape paperwork needed in court
- Set-up a company in the court, apply for your TAX ID at the tax office, and open a bank account.
It sounds like a lot, and it certainly can be, so is it really possible?
Yes, it’s possible if you contact me.
In my previous article published by 10 Mag, I explained that it is possible to establish a limited liability company with W100mil capital in Korea on a D-8 Visa, and detailed how to go about doing so. This time I’d like to introduce how to establish a branch in Korea if you already have an established company overseas. Here are some perks of incorporating as a branch in Korea:
- Unlike incorporating as a limited liability company, there’s no need to transfer W100mil from overseas, in fact there’s no minimum capital amount required.
- Incorporating your branch as a single-employee company is possible even if you’re the sole director of your company’s overseas branch.
- You will require an office as well as a tax ID to meet the requirement for a business license.
- There is no difference in corporate income tax rate if you decide to incorporate as a branch as opposed to alternative business structures, however, there will be no branch tax incurred if your branch makes a deficit.
The branch is able to coordinate almost all sales and marketing operations of the business in Korea on behalf of the overseas headquarters but there may be some restrictions on legal activity that may need to be handled by your overseas headquarters.
You can live and work in Korea on a D-7 visa under this particular business arrangement, however you still need to be able to prove your financial stability (That is, proof of reasonable income to cover your living expenses as well as business expenses for the company). It’s a slightly different process to the D-8 visa discussed in my last article, mainly in that you may need to leave Korea to attain your visa.
However, all that being said, I would be hesitant to recommend establishing your company in Korea as a branch, since many Korean customers tend to avoid working with these sorts of business structures.
If you need more details or have any questions about this article, please feel free to contact me jz@joezoh.com or visit my website.