Opening a company in South Korea can be an exciting venture. The country’s strategic location in East Asia, advanced infrastructure, and thriving tech scene make it an attractive destination for foreign investors and entrepreneurs. However, registering a company is just the first step. Once the paperwork is filed and the business entity is officially formed, the real operational journey begins.
This blog will walk you through the essential steps and obligations that follow company registration in South Korea. Whether you’re a foreign entrepreneur or an established business expanding into the Korean market, knowing what comes next can help you maintain compliance and establish a smooth operation.
1. Business Registration Certificate (BRC)
After registering your company, the first document you’ll receive is the Business Registration Certificate issued by the National Tax Service (NTS). This certificate is the official proof that your company exists and is authorized to conduct business in South Korea.
The BRC includes details such as:
- Business registration number (similar to a tax ID)
- Legal representative’s name
- Registered business address
- Type of business activities permitted
You will need this certificate to open a corporate bank account, issue invoices, and engage in any legal or financial transaction in Korea.
2. Opening a Corporate Bank Account
Once the BRC is issued, the next step is to open a corporate bank account. Korean banks require a valid BRC and identification of the business representative. Some banks may ask for a business plan or proof of future transactions, especially if you’re a foreigner.
Corporate accounts in South Korea are essential for:
- Managing business revenue and expenses
- Processing payroll
- Handling tax payments and social contributions
- Receiving investment or startup funding
Be prepared to go through a due diligence process, as South Korean banks are meticulous about anti-money laundering (AML) compliance.
3. Tax Registration and Compliance
A. Value-Added Tax (VAT)
Most businesses in South Korea must register for Value-Added Tax (VAT). If your annual revenue exceeds KRW 30 million, you are required to charge VAT on sales and submit regular filings.
VAT in South Korea is typically 10% and applies to most goods and services. Returns are filed quarterly, and companies are expected to:
- Maintain tax invoices
- Submit purchase and sales ledgers
- Keep digital records
B. Corporate Income Tax
Corporate tax rates in South Korea range from 10% to 25%, depending on the taxable income of the business. Annual returns must be filed within three months after the end of the fiscal year, and interim returns may be required.
The Korean tax system also mandates the submission of:
- Annual financial statements
- Audit reports (if applicable)
- Transfer pricing documentation (for multinational entities)
Failing to comply with these requirements can result in penalties or audits.
4. Hiring Employees and Labor Law Compliance
Once you’re ready to grow your business, you’ll likely consider hiring local employees. South Korea has strict labor laws designed to protect workers’ rights, so employers must adhere to the following:
A. Employment Contracts
All employees must be provided with a written employment contract that outlines:
- Job description
- Salary
- Working hours
- Leave entitlements
- Termination conditions
B. Minimum Wage and Working Hours
As of 2025, the minimum wage in South Korea is approximately KRW 9,860 per hour. The standard working week is 40 hours, and overtime pay is mandatory if hours exceed this limit.
C. Social Insurance Programs
Employers are obligated to enroll employees in South Korea’s four major social insurance programs:
- National Pension
- Health Insurance
- Employment Insurance
- Industrial Accident Compensation Insurance
Both the employer and employee contribute to these programs, and the company must report new hires to the Social Insurance Office promptly.
5. Office Setup and Legal Address Maintenance
Your company must maintain a legal address in South Korea. This address appears on all official documentation and is used for correspondence with regulatory bodies. If you’re using a virtual office or shared space, ensure that it complies with the address requirements outlined by the Ministry of Justice and the tax authorities.
Additionally, you’ll need to manage:
- Utility contracts
- Internet setup
- Lease agreements
- Postal services
These may seem like minor details, but they are crucial for operational readiness.
6. Bookkeeping and Accounting
South Korea has a well-regulated financial system, and companies are required to follow Korean International Financial Reporting Standards (K-IFRS) for accounting and auditing.
Businesses must:
- Maintain proper accounting records
- Issue tax invoices for all transactions
- Conduct periodic financial reconciliations
For small businesses, simplified bookkeeping may be available. However, companies over a certain revenue threshold or those with foreign shareholders may be subject to mandatory external audits by certified public accountants (CPAs).
Hiring a local accounting firm or tax advisor can be beneficial to ensure ongoing compliance.
7. Import/Export Licensing (If Applicable)
If your business involves cross-border trade, you must register with the Korea Customs Service and obtain the relevant licenses. This includes:
- Import/export business registration
- Product-specific certifications (e.g., food, cosmetics, medical devices)
- HS code classification and tariff codes
Depending on your product category, you may also need compliance with Korean Industrial Standards (KS) or approval from sector-specific ministries.
8. Intellectual Property Protection
While not mandatory, registering trademarks, patents, or designs with the Korean Intellectual Property Office (KIPO) is advisable to protect your brand and innovations. South Korea offers strong legal protections, but only for registered intellectual property.
Failure to register may expose you to the risk of infringement or brand misuse, especially in competitive sectors like cosmetics, technology, or fashion.
9. Annual Reporting Obligations
Once your company is operational, you’ll need to prepare annual reports and submit them to the appropriate authorities. This includes:
- Financial statements (balance sheet, income statement)
- Shareholder meeting minutes
- Tax returns and supporting documents
In some cases, foreign-invested companies are also required to report to the Ministry of Trade, Industry and Energy (MOTIE).
Late or incorrect filings can result in fines, increased scrutiny, or deregistration.
10. Business Culture and Networking
While not a legal requirement, understanding Korean business culture can significantly influence your success. Business in Korea is relationship-driven. Hierarchy, respect for seniority, and punctuality are highly valued.
Post-registration, consider participating in:
- Local chambers of commerce
- Business forums and expos
- Industry-specific networking events
This can help you integrate into the business community, understand local consumer behavior, and attract partners or clients.
11. Adapting to Regulatory Changes
South Korea’s business laws and tax regulations are subject to updates. As a registered business, it’s your responsibility to stay current with changes in:
- Tax codes
- Employment law
- Industry-specific regulations
- Data protection requirements (e.g., PIPA compliance)
Subscribing to updates from the Ministry of Economy and Finance or partnering with a legal advisor is a smart way to stay ahead.
12. Optional Post-Registration Actions
Depending on your long-term goals, consider these additional steps:
- Applying for FDI benefits: If you’re a foreign investor, you may be eligible for certain tax incentives or government support.
- Seeking government grants: Some startups qualify for innovation or R&D grants.
- Applying for D-8 Visa: If you’re a foreign investor or executive, securing the correct visa is crucial for residing and working in Korea.
Final Thoughts
Opening a company in South Korea is a streamlined process for both local and foreign investors. However, what follows registration is just as important—if not more so. From complying with tax regulations and labor laws to building strong banking and accounting foundations, each step determines the smooth operation and sustainability of your business.
Staying informed and proactive helps avoid pitfalls that can disrupt operations. Whether your focus is on trade, technology, or services, South Korea’s business environment is robust—but it demands diligence.
If you need help navigating these requirements, contact us today for professional guidance tailored to your industry.
And remember, opening a company in South Korea marks only the beginning of your business journey. What truly matters is how you manage what comes next.
