Benefiting from globalization and the South Korean government's policies to promote and support foreign investment, the number of cases where foreigners establish businesses in South Korea is steadily increasing. Foreigners typically enter South Korea for business purposes by setting up a company, branch office, or liaison office. So, what is the process for foreigners establishing a company specifically in South Korea?

When a foreign individual or company sets up a business in South Korea, they can choose to establish either a foreign-invested company or a general company, depending on the entity type and capital size. If the capital is over 100 million KRW and the foreign equity ratio exceeds 10%, a foreign-invested company must be established. Otherwise, a general company can be set up through the declaration procedure for obtaining shares.

1. Company Establishment Process and Required Materials in South Korea

The steps to establish a company in South Korea are as follows, emphasizing the specific requirements unique to the South Korean market:

○ Foreign Investment Declaration or Securities Acquisition Declaration
○ Transfer of investment funds (registered capital) to a South Korean bank
○ Issuance of a capital deposit certificate by the bank upon receipt of funds
○ Corporate registration (company incorporation)
○ Business registration (tax office)
○ Open a corporate account and transfer the paid-in capital to the company account
○ (For a foreign-invested company) Registration as a foreign-invested company

2. Required Documents

1) Foreign Investment Declaration Stage

○ Foreign Investment Declaration Form
○ Passport of the foreign investor or a copy of the corporate investor's certificate
○ Power of attorney
○ Agent's identification
○ Other relevant documents

2) Corporate (Company) Registration and Business Registration Stage

○ Application for corporate (company) registration
○ Articles of Incorporation
○ Subscription certificates
○ Certificate of capital deposit
○ Foreign Investment Declaration Certificate
○ Appointment agreement for foreign executives
○ Personal seals of executives, founders, and corporate seal
○ Shareholder registry
○ Copy of office lease agreement
○ Registration power of attorney
○ Other relevant documents

Among these documents, copies of the foreign investor's passport, the corporate investor's certificate, power of attorney, appointment agreements for foreign executives, and other similar documents must be notarized by the issuing country and authenticated under the Apostille Convention. If the issuing country is not a signatory to the Apostille Convention, the documents must be notarized locally and authenticated by the Korean consulate.

3. Processing Time

The corporate establishment process in South Korea typically takes about one month. However, the time required for notarization and consular certification may vary depending on the case, which could lead to delays in the overall process.

Siwoo's international legal team strives to provide comprehensive legal services from the preparation stage to the completion of company formation. Based on our professional expertise, we deliver tailored and effective solutions to meet our clients' specific needs.

ryu@siwoo-law.com