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  • Title
    How much does it cost to establish a stock company?
  • Content
    <Case of Company Establishment Cost (100 million won in capital, in a large city)>




    Registration Tax

    0.4% of the capital, 3 times when a stock company is established in large cities

    KRW 1,200,000

    Local Education Tax

    20% of registration tax

    KRW 240,000

    Supreme Court Revenue Stamp

    Fee for registration application

    KRW 30,000

    Corporate Seal


    KRW 30,000

    Notarization Fee

    Articles of association, etc. (exempted in case of promotion of incorporation of which capital is KRW 1 billion or less

    About KRW 150,000



    About KRW 1,620,000

    ※ Fees charged by law firms and accounting firms are not included
  • Title
    What is the reason for the notarization of Articles of incorporation?
  • Content
    The articles of incorporation shall take effect upon the authentication by a notary public of a district public prosecutor’s office, which has jurisdiction over the district where the principal office of the corporation is located. The corporation may file a registration of incorporation only if it submits the notarized articles of incorporation.
    ※Required documents: 2 copies of articles of incorporation, 1 copy of certificate of seal impression, resident registration certificate
     (Power of attorney in case where an agent files the application)
  • Title
    What are the general principles?
  • Content
    (1) Absolute particulars (Commercial Act Article 289-1)
    Followings matters are required to be included in the general principles for the establishment of a corporation. Failure to include any of the following particulars will result in the nullity of incorporation.
    a. Purpose
    b. Trade name
    c. Total number of shares authorized to be issued
    d. Par value per share (More than 100 won)
    e. Number of shares to be issued at the time of incorporation
    f. Place of principal office
    g. Method of public notice
    h. Name, residence registration number and address of each promoter
     (2) Relative particulars 
    Particulars that do not affect the validity of general principles but shall be ineffective to the company and shareholders when not stated under the general principles. 
    (3) Optional particulars 
    Particulars that do not affect the validity of general principles or the management of the company but become effective when stated under the general principles. The difference between relative particulars is the fact that optional particulars do not have to be written in the general principles to be effective. 
    Particulars that do not affect either validity of the articles of incorporation or business activities of a corporation . It is distinguished from
  • Title
    Documents required for registration of incorporation
  • Content
    The registration of incorporation of a corporation shall be effected within two weeks from the day when the investigation in the process of establishment has been completed in cases where the promoters subscribed for all the shares issued at the time of incorporation, and within two weeks from the day on which the inaugural general meeting has been closed in cases where the promoters have offered shares for subscription.
    The composition of promoters and whether the trade name or title has been used by other companies shall be reviewed before the registration. A corporation requires one or more promoters. The promoter shall subscribe for shares in writing and may subsequently become a shareholder of the newly-created company.
    Since no trade name which has been registered by another person shall be registered as a trade name of the same kind of business in the Seoul Special Metropolitan City, Other metropolitan cities and cities/counties. The trade name shall be checked prior to the registration by using the Supreme Court website (www.iros.go.kr).
    < Documents Required for Registration of Incorporation>
    1. Application for incorporation registration 
    2. Articles of incorporation (Notarization by a public notary required. Notarization is exempted where a company with total capital of less than one billion won is incorporated by promotion.)
    3. Documents certifying acquisition of shares
    4. Stock subscription agreement (in the case of incorporation by subscription)
    5. Written consent to matters concerning issuance of shares
    6. Written consent to a reduction of the notice period for the inaugural general meeting
    7. The minutes of the inaugural general meeting (Notarization by a public notary required. Notarization is exempted where a company with total capital of less than one billion Won is incorporated by promotion.)
    8. The minute of the Board of Directors (Notarization by a public notary required. Notarization is exempted where the total capital of the newly incorporated stock company is less than one billion won.)
    9. Securities subscription deposit certificate
    10. An investigation report by a director, auditor, or the audit committee
    11. Certificate of foreign investment notification
    12. Certificate of inauguration acceptance.
    a. Korean nationals shall put his/her seal on the certificate, and attach a certificate of the seal and a certified copy of resident registration
    b. Foreign nationals shall attach a notarized original certificate of signature, certificate of address, and a copy of his/her passport.
    13. A certificate of registration of seal impression
    14. Translations of the required documents (In cases where the required documents including the directors’ inauguration acceptance are written in a foreign language)
    15. Certificate of payment of registration tax as issued by the district (gu) office having jurisdiction over the area in which the business’ headquarters is located.
    16. Supreme Court revenue stamp.
    17. The power of attorney (where an agent makes the application)
    18. Corporate seal
    19. The application for issuance of a corporate seal card (after the registration of incorporation).
  • Title
    Types of corporation establishment
  • Content
    - Incorporation by subscription: promoter only acquires a portion of the stocks issued at the time of incorporation and offers the rest for subscription by shareholders.
    - Incorporation by promotion: promoters acquire all the stocks issued at the time of incorporation, without capital investment from outside.
  • Title
    Procedures for Establishment of a Local Corporation
  • Content
    There are four types – limited partnership company, partnership company, stock company and limited liability company – of businesses for a foreigner to advance into Korea for the purpose of operating business. As most companies fall into the category of “stock company”, the procedures of the establishment of a stock company will be explained.
    Procedures for Establishment of a Local Corporation
  • Title
    What is the difference between sole proprietorship and corporation?
  • Content
    1. Character
     (1) Sole proprietorship: A type of business entity that is owned and run by an individual. The individual has full ownership of the business as well as unlimited liability for business debts.
     (2) Corporation: A type of business entity that has completely different legal characters from individuals, and its operation is run by managers under its trade. A corporation limits its liability and guarantee to the amount of its asset. Presidents, board members and shareholders are usually not liable to the corporation’s debts.
    2. Formation 
     (1) Sole proprietorship: Only required to report foreign investment and receive a business license from tax office.
     (2) Corporation: Required to report foreign investment, register corporation and submit necessary documents (Generally takes one or two weeks more compared to other registration processes)
  • Title
    If a foreign-invested company pays the interest of the borrowed capital (long-term loan foreign investment) from its parent company, will the interest rate be determined between the two companies?
  • Content

    o There is no limit. However, related transaction should be arm’s-length transaction. In other words, if the related transaction with the overseas parent company directly or indirectly owns more than half of the voting stocks, the interest rate will be of an arm’s length price of general transaction. 


    o If the taxable income of a company is reduced for related transaction that is higher or lower than arm’s-length price, the tax authority will recalculate the taxable income based on the arm’s-length price of the transaction and impose tax. This is called transfer price tax.

  • Title
    If a foreign-invested company borrows capital from its overseas parent company, would this be FDI?
  • Content

    o If the following companies borrowed capital from their parent companies for more than five years can be recognized as foreign investment (long-term loan foreign investment): 

    - A foreign-invested company or company that has investment relationship with overseas parent company of a foreign-invested company 

    - A foreign investor or company that has investment relationship with foreign investors 


    o Foreign investment declaration as long-term loan  

    - Application form: Attached form 6 of the Enforcement Regulations of the Foreign Investment Promotion Act ([ ] Declaration [ ] Declaration of change of foreign investment as long-term loan) 

    - One copy of document that verifies that the company has investment relationship with the overseas parent company 

    - Once copy of the loan contract

    - One document that verifies the nationality of the loan provider (except for when an overseas parent company that has declared as foreign investment lends capital.)

  • Title
    What are the precautions for a foreigner to establish a corporation with spot goods instead of capital?
  • Content

    o Since capital goods are investment objects of the establishment of a foreign-invested company, the goods must be declared as foreign investment to the consigned organizations (bank or KOTRA, etc.) and the adopted goods (capital goods) must be confirmed by the consigned organizations before the customs clearance. Despite the regulations of the Foreign Trade Act, the statement of the capital goods reviewed and confirmed by the consigned organizations will be regarded to be approved of import.  

    o After the customs clearance, the foreigner should issue the certificate of completion of capital goods investment from the Commissioner of the Korea Customs Service (a Korea Customs Service dispatch officer of IK) with the attachment of the certificate of completion of import declaration (copy). Despite Article 299 of the Commercial Act, the certificate of completion of capital goods investment, which the Commissioner of the Korea Customs Service (a Korea Customs Service dispatch officer of IK) has confirmed the execution of investment and the type, amount and price of investment object, will be attached as part of the documents to be submitted for the registration of the establishment of corporation and foreign-invested company under “the inspector’s report” following the Non-Contentious Case Litigation Procedure Act. 


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