Doing Business Guide

Different forms of business entities foreign investors may establish in Korea

There are various types of business entities which a foreign investor may establish in Korea. The type is determined by the purpose of its business, relevant tax laws, and other government regulations. Generally, however, foreign investors choose one of the followings: Liaison/Representative Office, Branch Office, Wholly-owned Subsidiary, and Joint Venture.

The governing laws of Korea also differ according to the type of business presence. Establishment of a branch or liaison office in Korea is governed by the Foreign Exchange Transaction Law "FETR") and related regulations. Matters relating to establishment of a subsidiary wholly owned by a foreign corporation or a joint venture company are governed by the Foreign Investment Promotion Act ("FIPA") and related regulations. Relevant provisions of the Commercial Code and various tax laws apply in both cases mentioned above. Usually a wholly-owned subsidiary or a joint venture takes the form of a "Chusik Hoesa" (stock company) or a “Yuhan Hoesa” (limited company).

We may provide more detailed information on establishment procedures of each type of business entities upon request.