With multiple business opportunities, South Korea is an excellent destination for foreign entrepreneurs looking for economic stability, a solid global financial center, and much more. If you are looking to open a company in Korea, this article presents you with useful information about the business climate, available entities, and other relevant information. You can rely on the support of our agents for assistance in company formation in Korea.
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Types of companies available in South Korea
Here are some of the most popular types of business entities available in South Korea:
- the limited liability company is a popular business option for overseas entrepreneurs. There is no minimum share capital imposed;
- the joint stock company in South Korea is often the choice for foreign investments and/or large enterprises;
- the limited partnership company is a mix of general and limited liability partners who want to start a business in South Korea. A partnership agreement stands at the base of this business entity;
- individuals wanting to do their own business can set up a sole proprietorship in South Korea;
- branches are also available for international investors wanting to do business in South Korea;
- a representative/liaison office in South Korea is optimal for foreign entrepreneurs who want to test the market first.
Considering the business entities available in South Korea, you can ask for information and guidance in company formation from our local experts. Our specialists can act as company representatives and deal with the company incorporation formalities in South Korea.
Main taxes in South Korea
If you want to set up a company in South Korea, it is good to know the tax system in this country. Here are some of the most important fees:
- the corporate income tax (CIT) ranges from 10% to 24%, the latter rate being imposed on profits above KRW 300 billion.
- 10% is the VAT in South Korea;
- the individual income tax ranges between 6% and 45%. There is also a local 10% income surtax, which additionally applies to the national income tax amount in South Korea;
- the Foreign Worker Special Tax rate is 19% applied on employment income, alongside the local surtax;
- the inheritance and gift tax ranges from 10% to 50%;
- the real estate tax is normally up to 4%. However, a 12% acquisition tax is imposed on individuals owning multiple properties in South Korea.
These are some of the most important taxes in South Korea. You can collaborate with our tax advisors if you want more information about the tax system in Korea.
Why invest in Korea?
South Korea is appealing for business development and foreign investments. Being a solid business and logistics hub in Northeast Asia, the country is in a strategic market position that attracts investors worldwide. Plus, South Korea is a major player in renewable energy, artificial intelligence, and the massive production of electric vehicles. Here are other reasons why foreign entrepreneurs choose Korea for business development:
- the South Korean government provides various cash grants and tax incentives to those owning a company in the existing free economic zones;
- South Korea is the 4th largest economy in Asia, with solid business sectors like Research & Development, advanced technology, automotive, etc.;
- a highly skilled workforce and world-outstanding infrastructure are also great advantages in the business climate of South Korea for international entrepreneurs.
Ready to set up a company in South Korea? Please contact our local team and discover the personalized services and offers provided to our local and foreign customers.