Table of Contents
1. Concepts
and conditions of foreign investment company in Korea
2. Establishment
procedure and cost of foreign investment company in Korea
1. What
is a foreign investment company?
A foreign investment company in Korea is a
corporate entity where foreigners invest and become shareholders, and
shareholders can both be foreign natural persons and corporations.
Do you have a foreign officer (director)?
If you have any questions about the registration of foreign
officers(directors), please refer to the link below.
Condition
(1) Investment
Limit
In order to be recognized as a foreign
investment, the amount of investment must be at least KRW 100 million, and
foreigners must own at least 10% of the total voting shares issued by the
company.
If you do not meet either of them, you can
submit a declaration for stock acquisition (purchase) rather than a foreign
investment.
(2) Foreign
Investment Inability
Foreign-invested companies are not
available in all industries, and some of them cannot be established.
In the Foreign Investment Promotion Act,
out of 1,145 industries under the Korean Standard Industry Classification, 60
industries such as public administration, foreign affairs, and defense are
excluded from foreign investment. 29 of the 1,085 industries are eligible for
foreign investment, but the investment rate is limited.
2. Procedures
for Establishing a Foreign Investment Company
Registration of a foreign-invested company in Korea consists of four steps: (1) Declaration of foreign investment, (2) Remittance
of investment funds, (3) Incorporation of a Company, and (4) Final Registration of a
foreign-invested company. Compared to the procedure for establishing a Korean company,
the establishment of a foreign-invested company only adds two steps: the
declaration of foreign investment and the registration of a foreign-invested
company.
In order to establish a foreign investment
firm, it is necessary to deal with complex tasks such as foreign investment,
currency exchange, preparation for apostille certification procedures, etc.
However, if you have little experience in establishing a foreign investment
firm or are not familiar with it, you may miss the necessary documents and procedures.
In this case, it may take a long time to compensate, so the process of
establishing a company may not be completed in time, or you may not be able to
receive benefits from establishing a foreign investment firm.
We have experience in establishing hundreds
of foreign-invested corporations. Based on this know-how, we can quickly and
seamlessly process the establishment of foreign investment corporations from
(1) to (4).
2.1. Declaration of Foreign Investment
For foreign investment, the investor or
himself or his agent must submit the following documents to the Korean Foreign
Exchange Bank or Foreign Investment Support Center.
Required documents
• Application
Form for Foreign Investment
• A
copy of the foreign investor's passport or a legal certificate from a foreign
entrepreneur
• Comprehensive
power of attorney (if an agent is filing on behalf; for this case it will be us
– Pearson & Partners)
• Agent
ID (if an agent is filing on behalf; for this case it will be us – Pearson &
Partners)
2.2. Remittance of Investment Funds
You can transfer your investment funds or
carry them with you at customs.
We will use the temporary number given by
your designated foreign exchange bank when you send money. Even if you do not
have an account number, you can transfer funds only with the information of the
recipient and the recipient bank. When transferring funds, you can indicate the
purpose of the funds as "Funds" for establishing 00 company. In the
case of carrying it in, you will receive a certificate after the declaration of the
foreign exchange. The bank will immediately issue a certificate of cash payment
and a certificate of foreign exchange purchase. The money deposited can be
transferred to the corporate account that was opened after the establishment of
the company and registered business, with the involvement of the corporate
representative.
The documents required to apply for foreign
exchange purchase and issue a certificate of cash payment are as follows.
Required documents
• Articles of Incorporation (also called as Memorandum
of Articles or Constitution)
• Resolution of Stock Issuance Status
• Stock Handover Certificate
• A legal entity that you plan to use
• Power of attorney and ID card in case of
agent
2.3. Incorporation of a Company in Korea
(1) Incorporation of a Foreign Investment Company
The registration procedure is the same as
the registration procedure for the establishment of a general Korean company, and you
only need to prepare additional documents related to foreign officers. If you
would like to learn more about the process of establishing a company, please
refer to the link below.
• Seals
from all officers, seal certificate
• Resident
Registration (Representative), Resident Registration (Rest Officer)
• Approval
of Inauguration, Address Proof (Apostille Certification)
• PassportCopy
• Shareholders’
seals
• Power
of Attorney (Apostille Certification) for all officers/members.
• PassportCopy
• Certificate of bank accounts balance.
* The list of required documents may change
depending on the specific situation.
When a foreigner registers as an officer, a
resident registration document and an inaugural approval document are required.
However, all documents submitted by foreigners are issued overseas and are not
valid in the country as a rule. In order for this to be recognized in our
country, it is necessary to obtain an apostille confirmation for foreign use.
(2) Establishment Registration of Foreign Investment Company
You can obtain additional documents and
proceed the same as applying for Korea domestic business registration.
Required documents
[For Domestic Business Registration]
• Business Registration Form
• Articles
of Incorporation
• Company
registration certificate
• Certificate
of Business Permission (if required any particular license by the government)
• Copy
of Lease Agreement
[Additional Documents required for Foreign
Investment Company]
• Copy
of Foreign Investment Declaration
• Certificate
of Purchased Foreign Currency
• Copy
of Passport (if the representative of Korea Company is a foreigner)
2.4. Final Registration
of Foreign Investment Company in Korea
Final Registration of a foreign-invested company
must be done with a foreign exchange bank that has been registered as a foreign
investment within 30 days from the date of establishment of the company. The
documents to prepare when registering a foreign-invested company are as follows.
Required documents
• Foreign-invested
company registration form
• A
certificate of incorporation
• Foreign
Exchange Purchase Deed
.
If you are planning to set up a foreign investment
company in Korea, contact our local corporate specialists for assistance.
