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Online Consulting

2019-11-14
Allistair Matthews
[General] Mr
Hello, 
We would like to start a master franchise of healthy fast food cafe/store in Seoul.
The original franchise is already established in Sydney. 
We will be taking this franchise to Seoul but it will be remodelled to be a completely different concept to the originally established sites in Sydney.

We were seeking advice on legal, tax, visa application/process and whether it would be more beneficial for the subsidiary company in Seoul to be  better suited as an Australian based company with a branch in Seoul or a Korean based company.

Thank you

Reply

2019-11-14
Consultant :
김양은
Dear Allistair Matthews,

Thank you for visiting our website.

Regarding your inquiries, let me briefly explain the differences between a branch office and a foreign-invested company.


1) Domestic Branch of a Foreign Company
- Governing law : Foreign Exchange Transactions Act
- Type of corporation : Foreign corporation
- Identity : The headquarter and branch are a single entity (consolidated accounting & settlement)
- Delegated agnecy to process notification and grant permission : Designated foreign exchange bank in Korea
- Minimum (maximum) investment amount : Not applicable (no restrictions on the investment amount)
- Scope of tax obligations : Tax obligations apply only to income from domestic sources (corporate tax rate : 10~25%)
                             In some cases, branch tax should be paid


2) Foreign-Invested Company
- Governing law : Foreign Investment Promotion Act
- Type of corporation : Domestic corporation
- Identity : The foreign investor and foreign-invested company are separate entities (independent accounting & settlement)
- Delegated agnecy to process notification and grant permission : KOTRA or a foreign exchange bank in Korea
- Minimum (maximum) investment amount : KRW 100 million or more, no upper limit
- Scope of tax obligations :  Tax obligations for all domestic and overseas income (corporate tax rate : 10~25%)


I will send you an investment guidebook to your e-mail so you can check for more details.

Please let me know if you have more questions. Thank you.


Lena Kim
Investment Consulting Center