How to Set Up a Company in Korea (2026 Guide)

Setting up a company in South Korea is a relatively straightforward process, but it involves several legal, tax, and banking steps—especially for foreign investors. This guide outlines the key procedures, timelines, and considerations for establishing a company in Korea in 2026.

1. Choose the Business Structure

Foreign investors typically choose between:

1) Subsidiary (Foreign-Invested Company)

• Most common structure

• Separate legal entity in Korea

• Eligible for FDI (Foreign Direct Investment) registration

2) Branch Office

• Extension of the foreign head office

• Not a separate legal entity

• Limited business scope depending on activity

3) Liaison Office

• No revenue-generating activities allowed

• Used for market research or coordination

👉 In most cases, a subsidiary is recommended for full business operations.

2. Minimum Capital Requirement

• Legally, there is no strict minimum capital

• However, for FDI registration:

  • Minimum: KRW 100 million (~USD 75,000)

👉 This is required to qualify as a foreign-invested company and obtain related benefits.

3. Foreign Direct Investment (FDI) Registration

Before incorporation:

1. File FDI notification with a Korean bank or authority

2. Open a temporary bank account

3. Transfer investment capital from overseas

👉 This step is mandatory for foreign shareholders.

4. Company Incorporation Process

Once funds are received:

Key steps:

1. Prepare incorporation documents

2. Notarization & apostille (for foreign shareholders/directors)

3. Register company with the court (registry office)

4. Obtain corporate registration number

5. Business Registration (Tax Office)

After incorporation:

• Register with the Korean tax office

• Obtain:

  • Business Registration Certificate

  • VAT status

👉 This step enables invoicing and tax reporting.

6. Open a Corporate Bank Account

After registration:

• Convert temporary account → corporate account

• Bank may require:

  • Director verification

  • Business plan / supporting documents

👉 Banking compliance has become stricter in recent years.

7. Key Tax & Compliance Requirements

Once established, the company must comply with:

1) Corporate Tax (CIT)

• Filed annually

• Deadline: March 31 (for December year-end)

2) VAT (Value Added Tax)

• Filed quarterly

• Deadline: typically 25th of the following month

3) Payroll & Withholding Tax

• Monthly reporting

• Year-end tax settlement (YETS)

8. Accounting & Reporting

Korean companies must:

• Maintain statutory books in Korean

• Prepare financial statements for tax filing

• Often provide English reporting to HQ (for foreign companies)

👉 Most foreign companies outsource this to an accounting firm.

9. Common Challenges for Foreign Companies

• Understanding Korean tax compliance

• Banking restrictions (especially FX transactions)

• Payroll and social insurance requirements

• Language and documentation barriers

👉 Working with a local accounting firm is strongly recommended.

10. Estimated Timeline

Step	Timeline
FDI registration	1–3 days
Fund transfer	1–3 days
Incorporation	5–10 days
Business registration	2–3 days

👉 Total: ~2–3 weeks

Conclusion

Setting up a company in Korea is efficient but requires careful handling of legal, tax, and banking procedures—particularly for foreign investors.

If you are planning to establish a subsidiary or need support with accounting, tax, or payroll compliance in Korea, it is advisable to engage a local expert early in the process.