Business Structures

Details about the different types of business structure available when starting a business in South Korea...

Local corporation

A foreigner can establish a local corporation, such as a joint stock corporation or a limited liability corporation. It is subject to the provisions of the Foreign Investment Promotion Act and the Commercial Act. If it is registered in accordance with the procedures defined by law, it is acknowledged as a Korean business. If a foreigner intends to register as a foreigner-invested business, the investment amount must be at least KRW 100 million. In this case, ownership and management are separated and investors' liability is limited to the invested capital.

Private business

Where a foreigner operates a private business in South Korea with an investment amount of at least KRW 100 million, the investment is recognised as a foreign direct investment. Private business owners are similarly subject to the provisions of the Foreign Investment Promotion Act. Private businesses are treated as local corporations in their business activities. The owner of the business takes all profits made and is subject to unlimited liability.

Branch

A foreign company appoints a representative to its Korean branch. The foreign corporation must establish its Korean branch in accordance with the Foreign Exchange Control Act and register the branch with the court.

Information provided by Yun Je Lee, Associate Professor at Ajou University School of Law Attorney at Law in South Korea/California  ccsnu4@gmail.com