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.
