Learn How to Start Doing Business in South Korea

Learn How to Start Doing Business in South Korea

Doing Business in South Korea Can Be Easier

South Korea is the “Asian Dragon” of the world, and it is a critical worldwide financial force. They have a prosperous nearby economy, and remote financial specialists are very welcome. Henceforth, on the off chance that you need to begin to invest in South Korea, you are making the correct move. Regardless of whether there are openings in various parts, you should initially do a market study to decide a methodology that works best for you before beginning.

If you want to know more reasons why you should invest in South Korea, you must read on to find out more.

 

Advantages of Doing Business in South Korea

The Process is Easy

If you are a foreign investor who wants to set up a business in business in South Korea, you will be required to have a partnership or business visa. You must present an application to the Korean embassy or consulate.

The immigration department of South Korea also requires a residence permit. It involves a lot of research and connecting with the authorities to find out which businesses in South Korea are ideal for you.

The Incentives are Tempting

The Foreign Direct Investment (FD) Incentives is a useful instrument for reimbursing foreign investment in South Korea in their financial inputs and making their launching expenses lower. The tax regime gives a tax rebate to international enterprises with the chance to play a significant role in South Korea’s economy.

At the same time, the government is helping these companies set up an industrial establishment and support them with finances.

The government of South Korea have assigned free trade zones that drive expansion, with minimal bureaucracy in the distribution, manufacturing, and trade; reduced costs in land and building rents, etc. Also, they have streamlined the custom processes for reporting. It is implemented in different planning operations.

The government have built their free economic zones to help the companies in free trade zones, to deliver logistics at main global hubs. They also have centres set up for welcoming foreign residents. Today there is already six economic free trade zone in South Korea.

Good Location

South Korea is located between Japan and China, and it is within the ideal proximity of over 60 cities with millions of populations. With the free trade agreement between the United States and South Korea in 2007, their market has improved access to the biggest consumer market in the world.

South Korea signed a free trade agreement (FTA) together with the Association of Southeast Asian Nations, and an interim agreement with India. There is an AFTA that is concluded with a European Union. They are also starting to open to Mexico, Canada, New Zealand, Australia, and other countries.

Their Customers are Discerning

South Korea has geeky computer consumers who bring growth to its home market in the past decade. The home appliance and Korean cellphone manufacturers are famous for their excellent quality around the world because they have perceptive local consumers.

Great Infrastructure

South Korea has well-established seaports, roads, airports, and rails. In 2008, the Incheon International Airport served 63 airlines, and 30 million passengers have travelled to 49 countries. What is more impressive is that, within six years since it opened in 2001, it has become the second-largest airport in the world in cargo throughput.

 

The Types of Businesses in South Korea

There are five different kinds of businesses in South Korea: limited liability company, joint-stock company, private limited company, limited partnership, and general partnership. Your business largely depends on the goals, business regulations, and tax implications. Most expatriates start with a liaison office, and it does not need any complicated formalities with registration, aside from registering with the tax authorities and national bank. The liaison office is ruled by the Foreign Exchange Transactions Act and Commercial Act.

You can also set up a branch in South Korea. Your office must be reported to a foreign exchange they have specified and complete the business registration and court registration to make this happen.

If you want to start a limited liability company or commercial entity, you must have a minimum capital of 50 million Korean Won. Also, the company status should be presented to the notary for certification, and there must be an appointed founder for the registration. The company’s Board of Directors will be responsible for the management.

 

The Tax System

Foreign companies that want to operate in South Korea are only taxed from their domestic income. The total tax amount is deducted from the source, and it is paid to the government. Also, companies that have to the paid value-added tax (VAT) must register not longer than 20 days after their activities have started. The VAT is levied based on the supply of their goods and services at 10%. Before you start, check with the authorities of Korean taxation.

 

The Paperwork of Business Registration in South Korea

  • A copy of the Korea Business Registration form
  • A lease agreement that is given for the sublease agreements, and sublease agreement
  • The copy of Permission Certificate, if it has been registered before the Permission, Business Registration Application copy, or Permission or Prospectus
  • Partnership Agreement
  • Korean citizens who live overseas, documents to show they are foreigners, passport copy of alien registration card. For the non-Korean residents: tax manager designation report.

Learn How to Start Doing Business in South Korea

Business Opportunities in South Korea

  • Financial services – The ageing population of South Korea needs better financial security
  • Food and agriculture – You can supply food and beverage products
  • Education – They are the fourth largest country to source foreign students
  • R&D – They have spent $80 billion in research and development
  • Professional Services – There are now new opportunities for different markets because of the FTA
  • Health, aged care, and biotech – The rapidly ageing population needs this

 

Contact us if you want to set up a business in South Korea.



Posted on June 18, 2020 by VA2 in Blog