Complete Guide to Incorporating a Company in Korea as a Foreign National: Process and Costs

Setting up a corporation in Korea as a foreign national involves six sequential steps: filing a foreign investment report → wiring investment funds → preparing the corporate seal and documents → court registration → business registration → foreign-invested enterprise registration. If the investment amount is KRW 100 million or more, you can register as a Foreign-Invested Enterprise (FDI) under the Foreign Investment Promotion Act; below that threshold, the company is simply treated as a general foreign-capital corporation. While it may look straightforward on paper, the wire transfer stage and the business registration step after court registration are where things most commonly go wrong.

Costs break down as follows: capital (minimum KRW 100 million recommended) + registration & license tax and local education tax (0.48% of capital, tripled in Seoul Metropolitan Overcrowding Control Zones) + notarization & registration fees + administrative agent fees. With headquarters in Seoul and KRW 100 million in capital, registration tax alone runs roughly KRW 1.44 million, and once you add notarization and legal fees, actual out-of-pocket expenses land in the KRW 2–4 million range. These costs are separate from the capital itself, so you need to budget for them independently to avoid throwing off your financial plan.

1. Three Things to Decide Before Incorporating

In practice, the first three questions we ask every client are always the same: how much capital, where will the headquarters be, and what percentage will the foreign investor hold? Until these three are settled, you can't even submit the initial report.

Capital Amount — KRW 100 Million Is the Threshold

Under Korean commercial law, there is no minimum capital requirement for a corporation. Technically, you could start one with as little as KRW 1 million. But that's where the problems begin. To register as a Foreign-Invested Enterprise (FDI) under the Foreign Investment Promotion Act, each individual investor must put in at least KRW 100 million. Without FDI registration, you can't get a D-8 investor visa, and you'll be locked out of the tax incentives and rent subsidies reserved for foreign-invested enterprises.

In other words, it's not just about getting money into the country — the funds must be "wired under a foreign national's name in an amount of KRW 100 million or more" to unlock any benefits.

Headquarters Location — Overcrowding Control Zones Matter

Most of Seoul, Incheon, and Gyeonggi Province fall within what's known as the Seoul Metropolitan Overcrowding Control Zone. If you set up your headquarters in this area, your registration and license tax triples. For KRW 100 million in capital, the tax would be KRW 480,000 in a regular area but KRW 1,440,000 in an overcrowding control zone.

Some companies consider registering outside the capital region to save on taxes, but if the registered address doesn't match where you actually operate, it can be flagged as a fraudulent registration. Your headquarters should be where you genuinely do business.

Foreign Ownership Ratio — Even 100% Is Possible

A corporation can be 100% foreign-owned. However, certain industries have restrictions on foreign investment. Broadcasting, newspapers, certain agriculture and fishery sectors, and nuclear power generation all have ownership caps. For most sectors — trading, IT, manufacturing, consulting — 100% foreign ownership is allowed without issue.

2. LLC vs. Corporation: Which One to Choose

This is the most common question from foreign clients. The short answer: if you plan to attract investors, pursue an IPO, or transfer shares in the future, go with a corporation. If a single owner will run the business with no complex ownership changes, an LLC works better.

Practical Differences Between the Two

Why Most Foreign Investors Choose a Corporation

In practice, when setting up a parent company → Korean subsidiary structure, the home-country headquarters often requires the entity to be a "Corporation." For companies based in the US, Japan, or China, having a Korean corporation makes it much cleaner to classify the entity as a branch or subsidiary on home-country documents. An LLC, on the other hand, can create ambiguity under some countries' accounting rules.

Also, if there's any plan to bring in additional investors down the road, a corporation is far more practical. With an LLC, transferring ownership requires the consent of all members, making equity changes cumbersome.

3. The 6-Step Incorporation Process in Detail

The entire process flows as shown in the table below. Each step must be completed in order — if one gets stuck, everything after it stops.

Step 1 — Foreign Investment Report

The investor (or their authorized representative) submits a report to a branch of a foreign exchange bank. The required attachments differ depending on whether the investor is an individual or a corporation. For individuals, the key documents are a passport copy and proof of address. For corporate investors, the essentials are the home-country certificate of incorporation (notarized with an apostille) and proof of the representative's current position.

This is typically where things first get stuck. Investors from China and Southeast Asia in particular are frequently rejected because they're missing the apostille or consular legalization on their home-country documents.

Step 2 — Wiring Investment Funds

After receiving the investment report confirmation, the foreign investor wires the funds into a Korean account under their own name. The wire transfer must explicitly state "foreign investment purpose" in the remittance details. If the money comes in as a general transfer, it won't be recognized as investment capital, and FDI registration will be denied later on.

After the transfer, the bank issues a "foreign currency purchase certificate" or "capital deposit certificate." This original document is required for the court registration step.

Step 3 — Notarizing the Articles of Incorporation and Proving Capital Deposit

If there's a single incorporator, drafting the articles of incorporation is straightforward. With multiple incorporators, all incorporators must sign, and the document must be notarized. Notarization can technically be skipped when capital is under KRW 1 billion, but when foreign incorporators are involved, getting it notarized upfront avoids identity verification issues that can cause headaches down the line.

Step 4 — Corporate Registration

You file for corporate registration at the jurisdictional district court registry office. This must be completed within two weeks of the filing date to avoid penalties. Registration typically takes 3–5 days to process, after which you can obtain the corporate registry extract.

Step 5 — Business Registration

After corporate registration is complete, you apply for business registration at the jurisdictional tax office. An original copy of the office lease agreement is mandatory. Even if you're using a virtual address or coworking space, you need to verify in advance that the landlord's business registration is active and that subleasing is permitted. Rejections happen most frequently at this stage.

Step 6 — Foreign-Invested Enterprise Registration

Once you have your business registration certificate, you return to the foreign exchange bank to complete the Foreign-Invested Enterprise registration. Once the Foreign-Invested Enterprise Registration Certificate is issued, all subsequent steps — including D-8 visa applications and tax incentive claims — become available.

4. Capital Requirements and FDI Registration Criteria

Minimum Capital — The Legal Minimum and Practical Minimum Are Different

Under Korean commercial law, there is no statutory minimum capital for a corporation. The practical minimum is a different story.

• For FDI registration: At least KRW 100 million per individual investor
• For D-8 visa eligibility: KRW 100 million or more (per Ministry of Justice standards)
• For tax incentive-eligible industries: Varies by sector (high-tech industries may require more)

Bottom line: if a foreign national actually intends to operate a business in Korea, KRW 100 million is the meaningful minimum.

Forms of Capital Contribution

Capital must be contributed in cash as a general rule. In-kind contributions — real estate, equipment, intellectual property — are also possible, but they trigger additional procedures such as appraisals and court-appointed inspectors, which can double or triple the timeline. The faster approach in practice is to contribute cash at incorporation and add in-kind contributions later through a capital increase.

The KRW 100 Million Per Person Rule for Joint Investments

This is a detail that joint investors frequently overlook. The threshold is KRW 100 million per individual investor, not KRW 100 million in total. If two investors each put in KRW 50 million, FDI registration will be denied. The foreign exchange bank will reject the application immediately if this requirement isn't met.

5. Required Documents and Home-Country Notarization

Apostille vs. Consular Legalization — What's the Difference?

If the investor's home country is a signatory to the Apostille Convention, a single apostille stamp is sufficient. This covers the US, Japan, Australia, and most EU countries. For non-signatory countries such as China, Vietnam, and Thailand, a two-step process is required: authentication by the home country's foreign affairs ministry, followed by consular legalization at the Korean embassy in that country.

Document Validity Periods

Home-country documents are generally only accepted if they were issued within the past three months. It's surprisingly common for investors to prepare documents too early, only to find they've expired by the time of incorporation and need to be reissued. Plan the document preparation timeline backward from the filing date.

6. Full Cost Breakdown by Category

Here's the actual cost breakdown for a typical case: KRW 100 million in capital, headquarters in Seoul, single incorporator.

Registration Tax Examples by Capital Amount

7. Post-Incorporation Steps You Must Complete

Completing the court registration and business registration doesn't mean your company is actually operational. You still need to open a corporate bank account, enroll in social insurance, and secure the D-8 visa conversion.

Opening a Corporate Bank Account — The Most Frustrating Step

Since 2022, banks have significantly tightened their screening for corporate accounts held by foreign nationals. Major commercial banks — Shinhan, KB Kookmin, KEB Hana — now require on-site office inspections and in-person interviews with the representative director.

Applications from companies with only a coworking space address are almost always denied. Without a physical lease agreement, office photos, and a detailed business plan, the account simply won't be opened. And without a bank account, you can't pay salaries or file taxes.

D-8 Investor Visa Conversion

If the foreign investor is already residing in Korea, they can apply for a change of status to D-8 after incorporation. If entering from abroad, they'll need to obtain a D-8 visa from the Korean embassy in their home country. The critical documents are the Foreign-Invested Enterprise Registration Certificate, corporate registry extract, and business registration certificate.

Social Insurance and Withholding Tax

As soon as you hire even one employee, enrollment in all four social insurance programs is mandatory. If the representative director holds a D-8 visa, they're also subject to national health insurance and national pension enrollment. Monthly withholding tax filings, quarterly VAT filings, and an annual corporate tax return will begin immediately.

Applying for Tax Incentives (If Applicable)

Under the Foreign Investment Promotion Act, certain sectors — high-tech industries and qualifying service businesses — are eligible for corporate and income tax reductions. These incentives are not applied automatically; you must file a separate application, and it must be submitted before commencing business operations. In practice, companies typically start coordinating with KOTRA immediately after incorporation.

8. Common Mistakes and Reasons for Rejection

When we look at cases that were rejected or delayed, the patterns are remarkably consistent.

Mistake 1 — Omitting Investment Purpose in the Wire Transfer

If the transfer is processed as a general remittance, FDI registration itself will be denied. Before wiring funds, you must coordinate with the foreign exchange bank to include the correct language in the remittance details.

Mistake 2 — Missing Apostille on Home-Country Documents

This is especially common with corporate investors whose articles of incorporation or corporate registry extracts from their home country are submitted without an apostille, resulting in outright rejection. Coordinate the timeline with a home-country attorney or notary well in advance.

Mistake 3 — Lease Agreement Name Mismatch

It's common for the representative to sign an office lease under their personal name before the company is incorporated. You cannot complete business registration with this arrangement. The lease must either be re-signed under the corporate name after incorporation or include a name transfer clause.

Mistake 4 — Premature Capital Withdrawal

Withdrawing capital immediately after registration and sending it back to the parent company will be treated as fictitious capital contribution. The capital must be structured to be used as actual operating funds.

Mistake 5 — Representative's Address Discrepancy

There are frequent cases where a foreign representative's home-country address is recorded differently in the articles of incorporation versus the corporate registry, triggering a registration correction. The address must be consistent down to every letter and number across the passport, home-country proof of address, and articles of incorporation.

Mistake 6 — Incorrect Industry Classification Code

Whether foreign investment is permitted and whether tax incentives apply depends on the Korea Standard Industrial Classification (KSIC) code. Selecting the wrong code during business registration means paying additional fees and losing time later to add or change the classification.

9. Frequently Asked Questions (FAQ)

Q1. Can I incorporate a company in Korea without physically being in the country?

Yes, you can. By preparing a power of attorney (notarized and apostilled in your home country) and granting authority to a representative in Korea, the entire process from the investment report through corporate registration can be handled by your agent. However, opening a corporate bank account and obtaining a D-8 visa are steps that typically require the representative director to be physically present in Korea. Realistically, you should plan to visit Korea around the time of incorporation completion.

Q2. Can I start a company with only KRW 50 million in capital?

Yes, incorporation itself is possible. Since Korean commercial law has no minimum capital requirement, you can technically form a corporation with as little as KRW 1 million. The issue is that KRW 50 million won't qualify you for Foreign-Invested Enterprise (FDI) registration, and you won't be eligible for a D-8 investor visa either. You can run a business, but the foreign representative will have no means of staying in Korea long-term.

Q3. Can a single foreign national be the sole incorporator?

Yes. Korean commercial law recognizes single-shareholder corporations. You can incorporate with just one director and one shareholder. If capital is under KRW 1 billion, you don't even need to appoint an auditor. That said, when the sole incorporator is a foreign national, the identity verification and notarization steps can actually become more demanding, so thorough preparation is essential.

Q4. How much can I save by locating headquarters outside Seoul?

Looking at registration tax alone for KRW 100 million in capital: Seoul is KRW 1.44 million vs. KRW 480,000 in non-metropolitan areas — a difference of roughly KRW 1 million. The gap widens with larger capital amounts. At KRW 1 billion, it's KRW 14.4 million vs. KRW 4.8 million — a difference of about KRW 9.6 million. However, registering at an address that differs from your actual place of business constitutes a false filing and can create legal problems, so the address must be where you genuinely operate.

Q5. How do I send additional funds from abroad after incorporation?

This isn't as simple as a regular wire transfer — you need to choose between a capital increase (new share issuance) or a loan. A capital increase requires a board resolution, shareholders' meeting resolution, and amendment registration, and you'll owe registration tax again on the increased capital. A loan requires a separate foreign borrowing report, and withholding tax applies when interest is paid. Either way, simply wiring money from the parent company's account without proper classification means the funds won't be recognized as investment capital and won't count toward expanding your FDI stake.

10. Consultation Information

Incorporating a company as a foreign national in Korea involves the intersection of legal affairs, foreign exchange regulations, taxation, and immigration — all at once. If even one document has inconsistent information across these areas, the entire timeline can slip by 2–3 weeks. VISION Administrative Office handles the full process under one roof: from the foreign investment report through corporate registration, business registration, Foreign-Invested Enterprise registration, and D-8 visa coordination.

VISION Administrative Office

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

If you haven't wired your investment funds yet, reaching out early saves the most time. We'll help you get the remittance wording right, plan the sequence for home-country document preparation, and choose the optimal headquarters location — all before a single dollar moves.