In the global business landscape, foreign companies that have ventured into the Korean market may sometimes need to conclude their operations for various reasons. In such cases, closing a liaison office or a branch is not a simple matter; it is a complex process that requires careful handling. This guide will walk you through the step-by-step closure procedure and highlight key considerations to keep in mind.

## Closure Notification: Taking the First Step

The first step in the closure process is to notify the designated foreign exchange bank of the closure. This is more than just a formal procedure; it is an important declaration that officially signals the end of the company’s activities in Korea.

The documents required are as follows:

1. Closure Notification for Foreign Company Branch in Korea
2. Documentation from the head office proving the decision to close (e.g., original board resolution, apostilled)
3. Original copy of the previously submitted Branch Establishment Notification
4. Business Registration Certificate
5. Power of Attorney (if applicable, apostilled)

### Role of Apostille
An apostille is an international certification that verifies the authenticity of documents, simplifying the recognition of public documents between countries that are party to the Apostille Convention. Attaching an apostille to documents issued by the head office ensures their international validity.

## Tax Procedures: Wrapping Up Properly

After submitting the closure notification, the next step involves deregistering the Business Registration Certificate at the tax office that has jurisdiction over the branch. This step is not just about returning a registration number—it is a crucial step in concluding all tax obligations in Korea.

The documents required for this step include:
- Original Business Registration Certificate
- Closure documentation from the head office (e.g., board resolution)

It is essential to ensure that all outstanding tax issues are resolved during this process. Even a minor tax issue can become a significant problem later, so thorough review is crucial.

## Official Liquidation Procedure for Branches: A Complex Journey

For branches, a formal liquidation procedure must be undertaken, which is more involved than a simple closure. This process consists of several stages, each with a specific purpose.

1. **Resolution to Close the Branch from the Head Office**: This marks the official start of the liquidation process.
2. **Appointment of a Liquidator and Commencement of Liquidation**: A key person is appointed to oversee the liquidation.
3. **Notification to Creditors (at least twice over a minimum of two months)**: All stakeholders are informed of the closure.
4. **Completion of Liquidation and Registration**: The closure is officially registered once the liquidation process is complete.
5. **Audit**: A final review of all financial matters is conducted to ensure everything is in order.

Transparency and accuracy are critical throughout these steps. Even small mistakes can lead to significant problems later, so managing each stage meticulously is essential.

## Recovery of Liquidation Proceeds: Final Settlements

Once the liquidation process is completed, the remaining assets can be recovered. This step ensures that the business is completely wrapped up in a legal and financial sense.

The documents required include:
- Remittance Application Form
- Bank account book and seal
- Copy of the Closure Notification for the Foreign Company Branch
- Documentation proving the disposal of domestic assets
- Bank Balance Certificate
- Tax Payment Certificate

It is important to ensure that all funds are accurately calculated and legally processed. Even a small error at this stage can cause significant issues later on.

## Key Considerations for a Successful Closure

- **Liaison Offices Do Not Require a Formal Liquidation Procedure**: Unlike branches, liaison offices can be closed with a relatively simple process.
- **Audit Reports Should Consider the Date of Liquidation Remittance**: This ensures that accuracy is maintained right up to the final moment.
- **Close Coordination with the Head Office is Essential**: Smooth communication throughout the process is crucial for a successful closure.

Terminating business operations in Korea is a complex process that involves several stages and requires careful attention to detail. It is much like solving a complex puzzle—if even one piece is misplaced, the entire picture can be compromised. Therefore, seeking guidance from legal and tax experts is the safest and most efficient approach.

Successfully completing this process is not just about ending one business chapter; it is about creating a clean slate for new opportunities in the future. In the world of global business, a proper exit can be just as important as a successful entry.

For Further Assistance:

Siwoo Law Firm
Ryu Seungho, South Korean Attorney
Email: [ryu@siwoo-law.com]