Important Update for Foreign Real Estate Buyers in Korea

In response to the surge in real estate purchases by foreigners in Korea, the government has taken regulatory action. 

Starting August 26, 2025, the entire Seoul Metropolitan City, 7 districts in Incheon Metropolitan City, and 23 cities and counties in Gyeonggi Province have been newly designated as Land Transaction Approval Zones for Foreigners. 

This means that foreign nationals looking to purchase certain residential property within these zones must obtain prior approval from the relevant local municipal office before signing any transaction contract. 

Transactions made without prior approval will be considered invalid and have no legal effect. 

Additionally, key requirements include: 

- Foreign buyers must move into the property within 4 months of receiving approval. 

- They must also reside in the property for at least 2 years following the acquisition. 

<Designated Land Transaction Approval Zones for Foreigners>

	Cities / Counties / Districts
Seoul	All districts of Seoul
Incheon	Jung-gu, Michuhol-gu, Yeonsu-gu, Namdong-gu, Bupyeong-gu, Gyeyang-gu, Seo
Gyeonggi Province	Suwon, Seongnam, Goyang, Yongin, Ansan, Anyang, Bucheon, Gwangmyeong, Pyeongtaek, Gwacheon, Osan, Siheung, Gunpo, Uiwang, Hanam, Gimpo, Hwaseong, Gwangju, Namyangju, Guri, Anseong, Pocheon, Paju

If you have any questions or need assistance with the prior approval process, please feel free to contact us at www.openvisakorea.com. 

#Korea #RealEstate #Housing #Foreigners #Prior-Approval #Seoul #Incheon #Gyeonggi

Corporate Taxation in Korea

1. Introduction

Corporate tax, also known as corporate income tax, is a tax imposed on the income earned by a legal entity. It applies to both legal entities and certain entities that are recognized as legal entities for tax purposes.

2. Corporate Taxpayers

There are two types of corporate taxpayers: domestic legal entities and foreign legal entities with income sourced in Korea. Domestic legal entities are considered unlimited taxpayers, meaning they are liable for tax on their worldwide income. On the other hand, foreign legal entities are classified as limited taxpayers and are only required to pay tax on income derived from sources within Korea.

A domestic legal entity is defined as a legal entity that has its headquarters, principal office, or substantive management location in Korea. Conversely, a foreign legal entity is a legal entity whose headquarters or principal office is located in a foreign country, as long as the substantive management of its business is not based in Korea.

3. Income Categories

The income subject to corporate tax for domestic legal entities can be categorized, among other things, as follows: 

(i) Business Income: The taxable income of a domestic legal entity is determined based on the profits generated from transactions that contribute to the net asset growth of the legal entity, as per the net worth increase theory. According to this theory, if a legal entity's net worth has increased during a specific tax period, it is assumed that they have received taxable income, regardless of the source of that income;

(ii) Liquidation Income: When a legal entity undergoes dissolution, the liquidation income refers to the value of the remaining assets after subtracting the total amount of its capital and retained earnings; and,

(iii) Income from Transfer: If a legal entity transfers non-business land or other assets, the law mandates that capital gains tax be paid in addition to the regular corporate tax applicable for each business year.

 

Corporate Tax Rate (2025)

Taxable Income  (KRW)	Marginal Tax Rate
200 million or lower	9%
From over 200 million to 20 billion	19%
From over 20 billion to 300 billion	21%
Over 300 billion	24%

 

4. Local Income Tax

There is an additional tax, known as the local income tax, imposed on corporate income. This local income tax is calculated as 10% of the corporate tax rate. In other words, if the corporate tax rate is, for example, 21%, then the local income tax on corporate income would be 10% of that rate, which would be 2.1%. Therefore, the total tax rate for corporate income, considering both the corporate tax and the local income tax, would be 23.1%.

Korea's Minimum Wage Update 2026

 On July 10, 2025, the Minimum Wage Commission decided to set the minimum wage for 2026 at KRW 10,320 per hour, a 2.9% increase from this year. This amounts to an annual equivalent of KRW 25,882,560, based on a 40-hour work week and 209 hours per month. 

In Korea, the minimum wage is uniformly applied across all workplaces, regardless of business type or number of employees. However, please note that it does not apply to businesses employing only family members living together or to domestic workers.

This adjustment is particularly relevant for those applying for or renewing their F-2-7 status. Starting January 1, 2026, individuals must show an annual income of at least KRW 25,882,560 for either 2025 or 2024, depending on the filing date, in order to earn points in the annual income category.

Below is a table displaying the minimum wage figures in Korean Won (KRW) beginning from the year 2023:

	2023	2024	2025	2026
Minimum Wage per Hour	9,620	9,860	10,030	10,320
Monthly Equivalent	2,010,580	2,060,740	2,096,270	2,156,880
Annual Equivalent	24,126,960	24,728,880	25,155,240	25,882,560

We hope this article helps for your purposes. Please feel free to contact us at openvisakorea.com if you have any question or comment in this regard.

GNI per Capita Applicable from July 1, 2025

When applying for certain visas and statuses in Korea, the Gross National Income (GNI) per capita is used as a benchmark to assess an applicant's income and financial capacity.

The GNI per capita of KRW 44,051,000 has been in effect since July 1, 2024, and will remain applicable until June 30, 2025.

Starting July 1, 2025, the GNI per capita will be set at KRW 50,120,000 for visa categories such as F-1, F-2, and F-5.

We hope this information is helpful. If you have any questions regarding this matter, please feel free to reach us at OpenVisaKorea.com.

New Minimum Salary Requirement for E-7-1 Visa

The Ministry of Justice has issued minimum salary requirements for E-7 visa categories today.

The minimum annual salary requirement for the E-7-1 visa will be set at KRW 28,670,000 from April 1, 2025, instead of the current standard of 80% (or 70%) of the GNI per capita.

However, there are no changes to the minimum salary requirement for the other E-7 visa catefories (E-7-2, E-7-3, and E-7-4).

If you have any question or comment in this regard, please contact us at oiaa@openvisakorea.com.



The "Butter-Free Butter Beer" False Advertisement Case

 

Multiple news sources have reported that Park Yong-In, the CEO of Virtue Company and a member of the trio Urban Zakapa, received a suspended sentence on February 18, 2025, for false advertisement regarding "Butter Beer." He was sentenced to eight months in prison, suspended for two years, and the company was fined KRW 10 million.

The court pointed out that despite the product not containing any butter, it was advertised with prominent use of the term "BEURRE" (French for butter), suggesting a butter base, which misled consumers.

The court further condemned the actions for undermining consumer trust and disrupting fair trade practices, noting that even after the charges were filed, a false statement was issued claiming all products now included butter.

This case serves as a cautionary reminder for those doing business in Korea about the critical importance of regulatory compliance in marketing products and services.

If you have any question regarding this case, please feel free to contact us at www.openvisakorea.com.



DeepSeek Update in South Korea

 



1. Following the launch of DeepSeek's gobal services in South Korea, the Korean Personal Information Protection Commission (PIPC) sent an official inquiry to the company’s headquarters regarding the collection and processing of personal data. Also, the PIPIC conducted its own analysis and identified certain inadequacies in DeepSeek’s privacy policy in light of South Korea's privacy protection laws (‘privacy laws’).

2. DeepSeek has appointed a local representative in South Korea and also acknowledged that during the process of launching its global services, there was some oversight regarding the privacy laws.

3. Given the need for significant time to ensure full compliance with the privacy laws, the PIPC advised that a temporary suspension of the DeepSeek service was necessary to prevent the spread of further concerns. In response, DeepSeek has suspended new downloads of its app on the app marketplaces in South Korea since 6:00 p,m. on February 15th.

4. During the suspension period, the PIPC will closely monitor DeepSeek’s data processing practices and ensure that the service aligns with the privacy laws.

5. In the upcoming conclusion of this case, the PIPC plans to:

a. Provide guidelines (in the form of a checklist) for foreign AI developers to ensure they assess their services' compliance with the privacy laws before launching in South Korea;

b. Propose amendments to the privacy laws to introduce specific provisions for AI technologies and enhanced enforcement measures for foreign businesses; and,

c. Strengthen international cooperation with other countries' regulatory bodies. This will be further detailed at the upcoming Global Privacy Assembly (GPA) in Seoul, Korea in September 2025.

Should you have any question or comment, please feel free to reach out at openvisakorea.com.



Modes of Entry into the Korean Market

 



There are two ways for a foreign company to enter and operate in Korea: (1) establishing a foreign-invested company, and (2) establishing a local office in Korea.

(1) Foreign-invested Company

Regulated under the Foreign Investment Promotion Act, a foreign-invested company is a legal entity in which any foreigner or foreign company invests and becomes a shareholder. It operates as same as a regular legal entity in Korea but must have an initial capital of at least KRW 100 million.

The Commercial Act provides the following five legal entity forms:

· Joint-stock company (“jusig-hoesa”)

· Limited liability company (“yuhanchaegim-hoesa”)

· Limited company (“yuhan-hoesa”)

· Partnership company (“habmyeong-hoesa”)

· Limited partnership company (“habja-hoesa”)

(2) Korean Office

A foreign company can establish an office in Korea under the Foreign Exchange Transaction Act. Such Korean office can take a form of (i) branch (sales office) which engages in sales activities, or (ii) liaison office which engages in non-sales activities such as market research, data collection, and advertising.

(3) Restriction on Foreign Investment

Among a total of 1,196 sectors in Korea, (i) 1,106 sectors are open to foreign direct investment without restrictions, (ii) 61 sectors are prohibited (including legislation, diplomacy, and national defense sectors), and (iii) 29 sectors are subject to restrictions on maximum foreign shareholding.

We hope ths helps for your purposes. Please feel free to contact us at openvisakorea.com if you have any question or comment in this regard.



Can a Start-up Company in Korea Sponsor an E-7-1 Visa?

1. Answer

Yes, a start-up company in Korea can sponsor a foreigner's E-7-1 visa, but the approval is not guaranteed. The outcome depends on various factors, including the company’s readiness and the preparation of the application. Therefore, the more accurate answer is: it depends!

2. Successful Cases

We recently assisted a foreign professional in securing an E-7-1 visa for employment at a start-up company with only two Korean employees. Immigration and visa cases are no different from other legal matters: they require a thorough understanding of the facts, the most up-to-date statutory laws and regulations, and applying them in the best possible way. A key differentiator is the ability to effectively combine these elements in presenting a strong case.

3. Challenges

Unfortunately, we often hear about foreign nationals who face rejection of their E-7-1 visa applications. This can be a devastating setback, especially after significant personal and financial investments in Korea. The most common causes of rejection are inadequate preparation and incorrect handling of the process, which often manifest in two main ways:

• Cost-cutting Measures: Some start-ups decide to handle the visa application process internally in an effort to save costs. While straightforward in theory, visa applications require meticulous attention to detail. Inexperience can lead to significant delays and, in various cases, rejection.

• Hiring a Wrong Attorney: Another pitfall is when a start-up company hires an attorney who is not well-versed in immigration law or lacks the necessary language skills to communicate with a foreign applicant. This can result in missteps, delays, and eventual visa rejection.

4. Solution

When applying for a position at a start-up company in Korea, it is highly recommended that you proactively address the visa process in your application. If you already have an attorney who has offered to handle your E-7-1 case, make sure to mention this either in your cover letter or during your interview. This simple step can be a game-changer and show potential employers that you have taken the necessary steps to ensure the visa process will not become an obstacle to your employment.

We hope this article helps for your purposes. Please feel free to contact us at openvisakorea.com if you have any question or comment in this regard.





Korea's New Immigration Policy Roadmap

 

On September 26th, the Korean government announced its New Immigration Policy Roadmap! We will share more details about the various policies as they are implemented. For now, here’s an overview of the policies aimed at attracting global talents:

1. Introduction of the “Top-Tier” Visa for Global Talents in Advanced Fields

A new “Top-Tier” visa will be introduced to attract highly skilled professionals from overseas in advanced sectors. These talents include individuals with a bachelor's degree or higher in STEM fields from top global universities, and those currently employed at leading global universities, companies, or research institutes.

2. Enhanced Support for Employment of International Students

The eligibility for the Fast-Track Program will be expanded to include graduates from general universities in science and technology fields. This program provides expedited residence (F-2) and permanent residency (F-5) visas. Additionally, the job search and internship period for international graduates will be extended (with the D-10 visa for up to three years), and job categories available for employment-based visas will be broadened.

3. Introduction of the “Youth’s Dream in Korea” Visa

This new visa will provide employment and cultural experience opportunities for youth from UN member countries that participated in the Korean War, as well as key economic partner countries. This visa is expected to be similar to the UK’s Youth Mobility Scheme visa.

We look forward to sharing further insights as these policies take shape. Meanwhile, if you have any question or comment, please feel free to contact us at openvisakorea.com.



Korea's Minimum Wage Update 2025

 

In August 2024, the Ministry of Employment and Labor announced that Korea's minimum wage for 2025 would be set at KRW 10,030 per hour. This amounts to an annual earning of KRW 25,155,240, based on a 40-hour work week and 209 hours per month. In Korea, the minimum wage is uniformly applied across all workplaces, regardless of business type or number of employees. However, please note that it does not apply to businesses employing only family members living together or to domestic workers.

This adjustment is particularly relevant for those renewing their F-2-7 status. Starting January 1, 2025, an annual income of KRW 25,155,240 or more (but less than KRW 30,000,000) for the years 2024 or 2023, depending on the filing date, must be shown to earn 10 points for the application.

This increase of KRW 426,352 from the year 2024's KRW 24,728,880 marks the second-lowest rise since the minimum wage was introduced in 1988. This modest increase is expected to provide some relief to those who rely solely on business income and have been facing challenges recently.

Below is a table displaying the minimum wage figures in Korean Won (KRW) beginning from the year 2022.

	2022	2023	2024	2025
Minimum Wage (per hour)	9,160	9,620	9,860	10,030
Monthly Earning (based on Minimum Wage)	1,914,440	2,010,580	2,060,740	2,096,270
Yearly Earning (based on Minimum Wage)	22,973,280	24,126,960	24,728,880	25,155,240

We hope this article helps for your purposes. Please feel free to contact us at openvisakorea.com if you have any question or comment in this regard.