Before you can hire employees, you must set up a South Korea subsidiary. The country offers several incentives for foreign investors to open a subsidiary in the country. However, you’ll still need to understand all the various regulations and laws to make sure you stay compliant.
Globalization Partners is an alternative to establishing a South Korea subsidiary. With our Employer of Record solution, you can use our established subsidiary to run operations in South Korea. We will be held liable for compliance issues on your behalf, so you can focus on running your company instead of worrying about South Korea subsidiary laws.
How to Set Up a South Korea Subsidiary
Companies expanding to South Korea should consider a variety of factors before choosing where to base their headquarters. Start by looking at essential business facets such as your industry type and any existing trade relationships. Further, South Korea has legal requirements for customs and imports. Check beforehand to make sure you can lawfully import the products you import and sell. You will need to get the required licenses and permits as well as export and import documentation.
South Korea is one of the most homogenous countries in the world, which can be a challenge for foreign nationals who want to do business in the country. “Face” is significant in South Korea, and you should acknowledge this part of the business culture before incorporating your subsidiary.
All official documents in South Korea will be in Korean, but international business is often done in English. Local language ability is imperative in South Korea, so if you do not know Korean, it is best to hire a translator or an employee who speaks the language.
Finally, when deciding on a location for your headquarters, you should consider South Korea’s free economic zones. You could get additional incentives or tax benefits if you set up your South Korea subsidiary here.
The steps to set up a South Korea subsidiary include:
- Making a company seal
- Choosing a bank for your capital deposit
- Registering your company
- Paying social security registration fees
- Opening a commercial bank account
- Establishing an office
- Filing rules of employment
South Korea Subsidiary Laws
You can choose from three different business structure options when setting up your South Korea subsidiary — a company, a foreign branch, or a liaison office. Incorporating as a private limited liability company is one of the most common options and comes with its own South Korea subsidiary laws. This type of foreign-owned corporation is recognized as a foreign investment. The company must invest at least 100 million won. Private companies that invest 300 million won or more will need a D-9 trade visa.
Benefits of Setting Up a South Korea Subsidiary
Establishing a South Korea subsidiary allows you to start working in the country. A limited liability company also protects both the parent company and the subsidiary. The parent company does not have to worry about any losses incurred by the subsidiary, and the subsidiary can operate under an independent structure that fits South Korea’s culture.
Your company can realize even more benefits through an alternative to establishing a South Korea subsidiary such as Globalization Partners. We can help you start working in a matter of days instead of the months it typically takes to set up a subsidiary. We’ll take on all the risk of compliance and act as an established subsidiary on your behalf.
Other Important Considerations
While predicting precisely how long it will take to set up a subsidiary is difficult, you will need to devote a significant amount of time to your expansion. You or someone else in the company will need to fly back and forth to South Korea multiple times throughout the process.
Several steps require additional capital beyond your initial investment, which means you must also budget a large amount of money. Finally, you will need a thorough understanding of South Korea’s subsidiary laws, or you will have to hire someone who already understands the ins and outs of these regulations.
Let Globalization Partners Help With Your Expansion
Choose Globalization Partners as a convenient alternative to establishing a South Korea subsidiary. Contact us today to learn more about our services.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.