Complete Guide to Setting Up a Foreign-Invested Corporation in Korea

Establishing a foreign-invested corporation in Korea follows five stages: ① Foreign Investment Notification (foreign exchange bank) → ② Investment Fund Remittance → ③ Corporate Registration (court) → ④ Business Registration (tax office) → ⑤ Foreign-Invested Company (FIC) Registration (KOTRA or foreign exchange bank). To qualify as a "foreign investment" under the Foreign Investment Promotion Act, a foreign investor must contribute at least KRW 100 million while acquiring 10% or more of voting shares. If either requirement is missing, the entity is classified merely as a general foreign-capital company and is excluded from D-8 visa eligibility and tax incentives.

The order matters. If remittance arrives before notification, proving the source of funds becomes tangled; if remittance is delayed before registration, the capital payment certificate cannot be issued and registration stalls. In practice, the goal is to complete notification → remittance → registration → business registration → FIC registration within 3–5 weeks, and a slip at any single step pushes the entire visa schedule back.

1. What Is a Foreign-Invested Corporation — How It Differs from a General Foreign-Capital Company

Definition of "Foreign Investment" Under the Foreign Investment Promotion Act

The Foreign Investment Promotion Act recognizes a transaction as foreign investment when a foreign investor acquires 10% or more of the voting shares or equity interest of a Korean entity and the investment amount is at least KRW 100 million. If either condition is not met, the entity is not classified as a Foreign-Invested Company (FIC) but as an ordinary foreign-capital company.

The distinction is not a mere label — it determines substantive rights. Only an entity registered as an FIC can sponsor a D-8 corporate investment visa and qualify for foreign investment zone tenancy, tax reductions, cash grants, and other incentives.

What You Lose Without FIC Status

In practice, it is common for applicants — unaware of this distinction — to remit less than KRW 100 million, or to design a structure where a Korean national holds 90%+ and the foreign investor only 9%. Either approach blocks a D-8 application from the outset.

Comparison With Branches and Liaison Offices

When a foreign headquarters enters Korea, there are three options: ① a foreign-invested corporation (local subsidiary), ② a Korean branch of the foreign company, or ③ a liaison office.

If you intend to conduct profit-making activities and have an executive reside in Korea on a D-8 visa, the local subsidiary (foreign-invested corporation) is effectively the only viable choice.

2. Five Decisions Before Incorporation — Industry, Capital, Equity Ratio, Entity Type, Location

2-1. Industry — Check the Restricted Sectors First

The first item to check is the business sector. The Enforcement Decree of the Foreign Investment Promotion Act separately lists prohibited sectors for foreign investment (national defense, nuclear power generation, etc.) and partially restricted sectors (newspaper publishing, broadcasting, telecommunications, parts of agriculture and livestock, etc.).

Partially restricted sectors carry a cap on foreign equity, so 100% foreign ownership is not permitted. You must first finalize the Korean Standard Industrial Classification (KSIC) code and then verify whether that code falls within a restricted category.

2-2. Capital — Is KRW 100 Million Really the Floor?

While the statutory minimum under the Foreign Investment Promotion Act is KRW 100 million, in practice this figure is only the de facto floor for D-8 visa screening. Immigration officers re-evaluate whether KRW 100 million is enough to cover personnel costs, rent, and operating expenses.

With monthly rent of KRW 2 million and salary for one employee, KRW 100 million is depleted in 6–8 months. A weak capital justification is the most common point at which D-8 applications are denied.

2-3. Equity Ratio — Wholly Owned or Joint Venture

A 100% foreign-owned structure makes decision-making faster but provides limited insight into the Korean market. A joint venture (JV) with a Korean partner accelerates market access, but the share-acquisition structure must be designed in advance to ensure foreign equity does not drop below 10%.

2-4. Entity Type — Stock Company vs. Limited Company

If the foreign headquarters intends the Korean subsidiary purely as an operational unit, a limited company is cleaner. But considering brand recognition with Korean counterparties and the possibility of future fundraising, a stock company is usually the default choice.

2-5. Location — Is a Virtual Office Acceptable?

Corporate registration can be filed using a virtual or shared office address. However, D-8 visa screening reverifies whether an actual place of business exists. Photographs, the lease agreement, and even utility bills are commonly requested, so applicants who rely solely on a virtual office often need additional time later to secure a physical office.

3. Step 1: Foreign Investment Notification — Where and With What

3-1. Filing Authority and Timing

A foreign investment notification is filed with a foreign exchange bank (FX-handling branches of Korean commercial banks) or the KOTRA Invest KOREA Plaza. The notification must be completed before the funds are remitted. If money is wired before notification, it becomes locked in a foreign currency deposit account and cannot be recognized as paid-in capital.

3-2. Documents to Submit

The parent company's registry must be issued in the home country and bear an apostille or authentication from the Korean consulate; if not in English, a Korean translation must be attached. Preparing these documents alone often takes 1–2 weeks in the home country.

3-3. Issuance of the Notification Certificate and Validity

Once accepted, the Foreign Investment Notification Certificate (acknowledgment of filing) is issued immediately. Because this certificate is used at every subsequent step — remittance, registration, FIC registration — the original must be kept carefully.

4. Step 2: Remittance of Investment Funds and Capital Payment Certificate

4-1. Remittance Channel — Must Be a Formal Wire via a Foreign Exchange Bank

Investment funds must be wired from the foreign investor's own overseas account to a Korean foreign exchange bank through formal channels. Third-party remittances, cash carry-ins, and informal currency exchanges are not recognized as paid-in capital.

When wiring the funds, the remittance purpose code must be specified as "Foreign Direct Investment (FDI)", and a copy of the foreign investment notification certificate must be submitted to the bank.

4-2. Issuance of the Capital Payment Certificate

Once the remittance arrives, the foreign exchange bank issues a Certificate of Custody for Paid-In Capital. This certificate is the key document proving capital payment for the court registration. Without it, registration cannot proceed.

4-3. Aligning the Remittance Schedule

5. Step 3: Corporate Registration — Articles of Incorporation, Officers, Filing Documents

5-1. Drafting and Notarizing the Articles of Incorporation

To register the company, the articles of incorporation must be drafted and notarized. Core items include the company name, business purpose, head office address, capital amount, par value per share, total number of shares to be issued, composition of officers, and fiscal year-end.

When the founders include foreign investors, instead of a Korean seal certificate, founders use a signature certification authenticated by the Korean consulate or a notary.

5-2. Composition of Officers

A stock company can be incorporated with as few as one director (under the special rule for small companies with capital under KRW 1 billion). However, for a foreign-invested corporation, the executive who will receive the D-8 visa must be registered as a corporate officer (Representative Director or Inside Director).

When the Representative Director does not reside in Korea, it is common to appoint a Korean co-representative or a separate Korea-based officer.

5-3. Documents for Registration Filing

5-4. What You Receive After Registration

Once registration is complete, the corporate registry extract and the corporate seal certificate can be issued. Both documents are used for business registration, FIC registration, and opening a corporate bank account.

6. Step 4: Business Registration and Step 5: Foreign-Invested Company (FIC) Registration

6-1. Business Registration — Tax Office Having Jurisdiction Over the Head Office

Within 20 days of completing corporate registration, you must file for business registration with the tax office having jurisdiction over the head office.

If a foreign representative does not yet hold an Alien Registration Card, a passport may be used instead. Once the Alien Registration Card is later issued, however, the representative information on the business registration certificate must be updated.

6-2. FIC Registration — The Final Button

After business registration, the Foreign-Invested Company Registration Certificate is applied for. The registration is processed by the foreign exchange bank where the original investment notification was filed, or by KOTRA.

Only after the FIC Registration Certificate is issued can you apply for a D-8 visa, claim tax reductions, or apply for tenancy in a foreign investment zone.

6-3. Overall Timeline Summary

The above is the shortest path assuming all documents are ready. If the apostille or consular authentication of home-country documents is delayed, the entire schedule pushes back another 1–2 weeks.

7. Linking to the D-8 Visa — Aligning Incorporation with Visa Timing

7-1. Visa Application After Incorporation

A D-8 visa can only be applied for after the FIC Registration Certificate is issued. When the foreign investor (who is both a shareholder and an officer) applies for the D-8 visa from the home country, the required documents include:

• Visa application form, passport, photograph
• Business registration certificate, corporate registry extract
• Foreign-Invested Company registration certificate
• Foreign investment notification certificate
• Certificate of custody for paid-in capital, remittance receipt
• Business plan, office lease agreement, office photographs

7-2. Certificate of Visa Issuance Confirmation vs. Direct Consular Application

It is possible to apply for the visa directly at a consulate abroad, but obtaining a Certificate of Visa Issuance Confirmation in Korea first and then submitting it to the consulate in the home country is generally faster and has a lower refusal rate. The certificate is issued by the Korea Immigration Service.

7-3. A Weak Capital Justification Will Block You

In practice, the most common point of failure is the source and use of the capital. Once KRW 100 million is remitted, if the D-8 application cannot clearly explain "how, on what, and over what period this KRW 100 million will be used," a request for supplementation is issued immediately.

8. Common Mistakes and FAQ

Common Mistakes

1) Remitting funds before filing the notification The most frequent mistake. The funds become trapped in a foreign currency deposit, and to have them recognized as capital, the notification must be re-filed and the remittance reprocessed.

2) Mismatch between notified business activity and the articles of incorporation Listing a wide range of activities in the articles, only to find they differ from those on the foreign investment notification, leads to rejection at FIC registration.

3) Withdrawing capital before registration is complete This may be treated as fictitious capital payment, exposing the parties to criminal sanctions and potential revocation of registration.

4) Applying for a D-8 with only a virtual office The D-8 review cannot verify the existence of a real place of business, leading to denial or supplementation requests.

5) Incorporating with foreign equity below 10% FIC status is denied outright, forcing a full restructuring of the Korean shareholding.

6) Forgetting the apostille on the parent company's registry The document must be re-issued in the home country and re-apostilled, adding 2–3 weeks.

FAQ

Q1. Can I invest less than KRW 100 million as capital? A. Under the Foreign Investment Promotion Act, the minimum to qualify as foreign investment is KRW 100 million. Anything less is classified merely as a general foreign-capital company — no FIC certificate, and no D-8 visa eligibility. Two or more foreign investors may pool funds to reach KRW 100 million collectively, but each must hold at least 10% of equity to be individually recognized as a foreign investor.

Q2. Can the entire process be completed from the home country before entering Korea? A. The foreign investment notification, remittance, and business registration can be handled remotely through a power of attorney without entering Korea. However, opening a corporate bank account often requires the representative to appear in person at the bank, and signing the office lease agreement typically requires the in-person presence of the representative or an authorized agent.

Q3. What is the difference between a foreign corporation investing in a Korean subsidiary and an individual investor making the investment directly? A. Investment by a foreign corporation imposes a heavier document burden — the parent's corporate registry, financial statements, and board resolutions all require apostille or consular authentication. Investment by an individual is documentarily simpler (passport and identity verification), but the source-of-funds proof for that individual is examined more strictly.

Q4. What happens if I increase the capital after FIC registration? A. Capital increases require a fresh foreign investment change notification, a separate capital custody certificate for the additional remittance, and a corresponding registration amendment. The FIC certificate must also be reissued. Going forward, the higher capital is reflected in the assessment of business scale at D-8 visa renewal.

Q5. What happens to FIC status if the foreign investor sells shares to a Korean buyer after incorporation? A. If foreign equity falls below 10% or the foreign investment amount drops below KRW 100 million, FIC status is lost. The FIC registration is then canceled, and the affected foreign officer also loses the eligibility basis for the D-8 visa, which becomes a ground for refusal at renewal. Before any share transfer, consider switching to a different status of stay (such as F-2) first.

Consultation

Setting up a foreign-invested corporation often forces applicants to start over from scratch when the sequence — notification → remittance → registration → business registration → FIC registration — is disrupted at any single step. To avoid lost time, the apostille of headquarters documents, the source-of-funds documentation, and the timing of the D-8 visa must all be designed together as one package.

VISION Administrative Office specializes in foreign-invested corporation setup and the related D-8 visa work as its core practice.

• Phone: 02-363-2251
• Email: 5000meter@gmail.com
• Address: 3F Seongwoo Building, 324 Toegye-ro, Jung-gu, Seoul 04614, Korea

We will organize your incorporation timeline, capital structure, and visa application timing in a single coordinated plan.