Hello. 

I am Kyusung Lee, partner attorney at WeOn Law.

Recently, there has been an increasing number of foreign companies entering Korea. The reason these foreign companies want to establish branches in Korea is simple: to conduct business activities and expand their market presence within the country.

However, under Korean law, foreign companies cannot freely conduct business in Korea. Therefore, to establish a branch in Korea, foreign companies must follow one of the two procedures that best suit their needs:

① Establishing a Korean branch as a foreign-invested corporation

② Establishing a direct branch in Korea as a foreign company

① Establishing a Korean Branch as a Foreign-Invested Corporation

This method involves a foreigner investing a certain amount of money to establish the branch, with minimum capital requirements. Individuals must invest a minimum of 300 million KRW, while corporations must invest a minimum of 100 million KRW, which might be considered stringent.

The forms of foreign-invested corporations include ▲joint-stock companies (JSC) ▲limited liability companies (LLC) ▲limited liability partnerships (LLP) ▲limited partnerships (LP), with joint-stock companies being the most common.

② Establishing a Direct Branch in Korea as a Foreign Company

Apart from the aforementioned method, foreign companies can also establish branches in Korea, which can be categorized into branches (business offices) and liaison offices.

Branches (business offices) can conduct revenue-generating business activities in Korea. In contrast, liaison offices cannot engage in any revenue-generating business activities and are limited to non-commercial functions such as business communication, market research, and research and development.

The establishment of a foreign company branch in Korea is not recognized as foreign investment and is governed by the Foreign Exchange Transactions Act. Therefore, it does not receive benefits typically available to foreign-invested corporations, such as tax reductions, and dividend distribution is also restricted.

However, unlike foreign-invested corporations, there is no minimum investment requirement, which makes it relatively easier to establish.

Procedure for Establishing a Foreign Company Branch in Korea

① Foreign Investment Report: Through KOTRA or a foreign exchange bank

② Transfer of Investment Funds: Via a foreign exchange bank or customs hand-carry

③ Registration of Corporation Establishment: Through the registry office

④ Obtaining Permits: If necessary, through relevant agencies

⑤ Corporation Establishment Report and Business Registration: At the tax office

⑥ Opening a Corporate Bank Account: At a foreign exchange bank

⑦ Registration as a Foreign-Invested Company: Through the initial reporting agency

To establish a foreign company branch in Korea, you must follow the above procedures.

Many clients seek our assistance due to the numerous preparations required and the approximately two-week timeline.

At WeOn Law, we handle every step of the process from start to finish, ensuring that you can entrust us with confidence, prepared to address any potential risks.

Documents Required for Establishing a Foreign Company Branch

Branch Establishment Report

- Foreign Company Branch Establishment Report

- Appointment letter of the domestic branch manager

- Documents proving the name, location, and main business activities of the foreign parent company (if copies, notarization is required at the location of the headquarters)

- If other laws require permits for the establishment, copies of those documents

- Articles of incorporation of the parent company

- Board resolution stating the intention to establish a branch or liaison office in Korea and the appointment of the Korean representative

- Detailed statement of the business activities and scope to be conducted in Korea

- Power of attorney, if delegating branch establishment tasks to someone other than the branch manager (notarization required at the location of the headquarters)

Branch Establishment Registration

- Foreign Company Branch Establishment Report

- Documents proving the name, location, and main business activities of the foreign parent company (if copies, notarization is required at the location of the headquarters)

- If other laws require permits for the establishment, copies of those documents

- Articles of incorporation of the parent company

- Board resolution stating the intention to establish a branch or liaison office in Korea and the appointment of the Korean representative

- Detailed statement of the business activities and scope to be conducted in Korea

- Power of attorney, if delegating branch establishment tasks to someone other than the branch manager (notarization required at the location of the headquarters)

- Application for registration of the Korean business office representative’s seal (optional for the convenience of the representative’s legal acts)

- Consent to appointment, signature notarization, and proof of address of the branch representative

*All documents issued abroad must be notarized or apostilled before submission.

WeOn Law has extensive experience with licenses for ✅foreign-invested corporations and ✅foreign company branches.

If you require legal assistance related to this, please do not hesitate to contact us.

Contact 

이규성 변호사 Kyusung Lee

(010-9023-5665, kslee@weonlaw.co.kr)