How Foreigners Can Start Business in Korea (2024)

FAQs

How Foreigners Can Start Business in Korea? ›

Foreigners can start business in Korea (including the establishment of corporations) by acquiring new or existing stocks as prescribed by the Foreign Investment Promotion Act, or by establishing a domestic branch or liaison office in Korea as prescribed by the Foreign Exchange Transaction Act.

Fees and timelines in 2023

South Korea company incorporation costs in Year 1 amount to US$3,500 and annual company costs in Year 2 amount to US$1,000. The average total fees per South Korea engagement amounts to US$13,093, including company incorporation, and corporate bank account.

With a GDP of $2 trillion, South Korea is one of the most developed and highly industrialized nations in today's world. As such, it is seen as a coveted place when it comes to the expansion of business internationally.

It may be difficult to set up a business in South Korea and remain compliant with all applicable regulations. Not all industries are open to foreign investment. Exporters must often navigate multiple import regulations and testing requirements.

What is the cost of starting a business in South Korea? The cost of starting a business in South Korea can vary depending on the company you want to start. However, the average cost of starting a business in South Korea is around $50,000. This number includes both startup costs and legal fees.

Foreigners can do business in Korea by: (1) establishing a local corporation; (2) opening a private business; (3) opening a branch; and (4) opening a liaison office.

Foreigners can start business in Korea (including the establishment of corporations) by acquiring new or existing stocks as prescribed by the Foreign Investment Promotion Act, or by establishing a domestic branch or liaison office in Korea as prescribed by the Foreign Exchange Transaction Act.

The country is a major exporter of electronics, automobiles, steel, and other manufactured goods. As of May 2022, Samsung Group remained the largest business group operating in South Korea, with a revenue of approximately 379 trillion South Korean won.

South Korea's economy heavily relies on foreign trade

South Korea is not only an export-driven country, but it also imports goods from China, the USA, and Japan. In fact, 70% of South Korea's GDP is based on world trade, which includes exports and imports, which are forecasted to increase in the upcoming years.

How long does it take to open a business in South Korea? ›

To establish and register a business in Korea, the Foreign Investment Promotion Act (FIPA) requires the following procedures, which normally take between four to six weeks to complete: Foreign investment notification. Investment capital remittance. Incorporation registration.

With its generous salaries and reasonable cost of living, a great benefit of expatriation in South Korea is the overall easy, comfortable way of life. Expats will find welcoming hosts among Korean nationals and fellow foreigners alike.

Some of the challenges faced by U.S. companies attempting to conduct business in Korea include unique industry standards, less than transparent regulations, resistance to foreign business models, and competition and price pressures from domestic manufacturers.

Foreigners are permitted to purchase real estate in South Korea. Foreign residents wishing to buy are subject to the Foreigner's Land Acquisition Act and the Registration of Real Estate Act.

Hence, if you are looking for a cheaper option, consider buying property in smaller cities or the suburbs. In general, you should expect to pay around 1.5–2.5 million KRW (130,000–215,000 USD) for a small apartment or a studio in Korea. Prices for bigger accommodation start at about 4 million KRW (340,000 USD).

How long can I legally drive in Korea? USFK Regulation 190-1 allows you to drive the first 30 days after arrival on your state side driver's license. Beyond the first 30 days, you must have a valid International Driver's Permit, a Korean driver's license or a USFK Driver's License (USFK 134EK).

For foreign employees, the Republic of South Korea requires a work permit and a work visa. Without these legal documents, lawful employment in the nation is not possible. Work visas are a form of protection for the employee, employer, and nation; they guarantee and prove your legitimate stay in the country.

Anyone wishing to move to South Korea and stay for a period longer than three months (90 days) needs a visa to move to South Korea. Depending on the purpose of your travel and how long you wish to stay in South Korea, you can choose which type of visa suits you best.

To work in South Korea or stay there for longer than 90 days, you must get a visa before leaving your home country. There are different types of work visas depending on the type of job.

Foreigner's Land Acquisition Act (FLAA)

Foreigners can acquire land in Korea by making a report, with the exception of land subject to prior permission. - Information on whether the land is subject to report or permission can be obtained from the Land Registration Divisions of the relevant Si/Gun/Gu offices.

Can a foreigner work at a cafe in Korea? ›

There are international language cafés in different places around the country. These cafés hire expats who are willing to work as an exchange for food and accommodation. Main tasks include making coffee for customers, cleaning up in the café, and teaching English to the customers.

The per capita annual income of the richest 0.1 percent was 1.85 billion won (US$1.4 million) in 2021, 69.5 times more than the 26.6 million won earned by those in the middle of the income bracket. The ratio continued to increase, rising from 61 times in 2018 to 60.4 times in 2019 and 64.7 times in 2020.

The 2022 Korean Wealth Report compiled by a think tank under KB Financial Group was based on a study conducted in June and July, including a face-to-face survey with 400 respondents with more than 1 billion won in financial assets. It defined “wealthy” as having financial assets over 1 billion won.

South Korea's education system and the establishment of a motivated and educated populace was largely responsible for spurring the country's high technology boom and economic development. South Korea began to adapt an export-oriented economic strategy to fuel its economy.

A major geoeconomic event occurred in 2018 when South Korea's real GDP per capita surpassed that of Japan. By 2026, the International Monetary Fund projects that South Korea will be 12 per cent ahead of Japan.

Jeju, the poorest region in the country, has a GDP per capita level equivalent to 72% of the GDP per capita in Chungcheong, the richest region in Korea.

Fewer than a handful saw their wealth increase and none more so than private equity maven Michael Kim, who tops the ranking for the first time and is this year's new No. 1.

South Korea's regulatory environment is generally supportive for entrepreneurs. The bureaucracy involved in exporting products is very low, as would be expected in a country that has based its development on exports.

Main Sectors of Industry

Industry represented 32.4% of the GDP and employed 25% of the workforce in 2022 (World Bank, 2023). The main industries include textile, steel, car manufacturing, shipbuilding and electronics.

How long can a foreigner work in South Korea? ›

There are several types of working visas in South Korea that allow for long-term employment. These permits let your employees stay for more than 90 days. E-1 professor visa: Expats wanting to give lectures or do research in their field at a college-level education facility should apply for this visa.

Visa is valid for 3 months once issued. This means that you will need to enter Korea within 3 months of its issuance or else the visa will lapsed. On the other hand, the period of sojourn listed on the Visa Grant Notice is the duration of stay allowed. The period of sojourn will start to count from the date of entry.

Many Koreans drink more than a single cup of coffee every day, and it is relatively easy to open a coffee shop in the country, with individuals able to open their own shops with 50 million to 70 million won, excluding the real estate costs. In other words, the entry barriers for cafes are low.

The average cost of living in South Korea ($1117) is 50% less expensive than in the United States ($2213). South Korea ranked 53rd vs 5th for the United States in the list of the most expensive countries in the world.

In addition to teaching English, other sectors where expats will find a lot of opportunities are in IT, general office administration jobs, manufacturing, and careers related to health, science, research, and technology.

Things to Know. All foreigners that enter South Korea intending to stay for longer than 90 days have to register with local immigration authorities within the first three months of their stay. South Korea sees visas as consul recommendations to allow the foreigner to enter the country.

While the Republic of Korea (South Korea) broadly respects the rights of its citizens, there are significant human rights concerns, especially regarding lesbian, gay, bisexual, and transgender (LGBT) people, women, migrants, racial minorities, older people, and people with disabilities.

Household debt and external exposure are the main sources of vulnerability. South Korea's short-term financing risk is deemed low, with the main area of concern being elevated and fast-growing household debt. Indeed, this stands at more than 100% of GDP and is tied to the booming property sector.

As of January 2023, the mean purchase price of housing in Seoul, South Korea amounted to around 912 million South Korean won. The average price of apartments amounted to around 1.27 billion South Korean won, while the price of detached and row houses were about 962.7 and 347 million South Korean won, respectively.

Among heads of households in their 70s in South Korea, about 70 percent owned homes in 2021, followed by those in their 60s at around 68 percent. According to the source, the home ownership rate overall that year was 56.2 percent.

How much does it cost to build a house in South Korea? ›

It costs about 3.5 million won to 6.5 million won per 3.3 square meters to build a house. People can choose interior or design firms separately. If these construction processes are separated, it can be cheaper but take longer to build a house.

One- and two-bedroom properties measuring up to 99 square meters in Seoul's wealthy central residential Gangnam district cost a median of $855,000 as of July 2021, according to government data collated by South Korean real estate app Zigbang.

In February 2021, the average monthly rent for one-bedroom flats in Seoul, South Korea, amounted to around 510 thousand South Korean won, up from about 480 thousand South Korean won in the previous month.

Is 2 million won a lot of money in South Korea? Yes, more than enough, but it depends on your lifestyle budget. 2,000,000 won is enough to cover this for example: Transportation: 150,000. Phone: 120,000.

Fees and timelines in 2023

South Korea company incorporation costs in Year 1 amount to US$3,500 and annual company costs in Year 2 amount to US$1,000. The average total fees per South Korea engagement amounts to US$13,093, including company incorporation, and corporate bank account.

The minimum paid-up capital for foreign investors to set up South Company Limited Company (Yuhan Hoesa) is KRW 100 million (US$70,000) to qualify under the FDI Act. A company that does not require to be qualified as FDI company can be registered with a minimum paid-up capital of US$10,000.

As of January 2023, the mean purchase price of housing in Seoul, South Korea amounted to around 912 million South Korean won. The average price of apartments amounted to around 1.27 billion South Korean won, while the price of detached and row houses were about 962.7 and 347 million South Korean won, respectively.

How much is business income tax in Korea? ›

Changes in the Corporate Income Tax (CIT) Rate

The 2023 Tax Reform introduced a one percentage point cut in each of the four CIT brackets as below. As a result, the corporate rates will be reduced from 10%, 20%, 22%, and 25%, to 9%, 19%, 21%, and 24%, effective for fiscal years beginning on or after 1 January 2023.

After holding one of the visas, you must apply for the F-5 visa, which is a permanent residence visa for South Korea. To be eligible for the visa, you must meet the following requirements: You invest nearly ₩600 million (approx. $500,000) or more in a Korean business and hire five or more locals.

Foreigners are permitted to purchase real estate in South Korea. Foreign residents wishing to buy are subject to the Foreigner's Land Acquisition Act and the Registration of Real Estate Act.

The average sale price of a home in the greater Seoul area shot up from 341 million won ($274,000) in May 2017, when Moon was inaugurated, to 626 million won ($503,000) as of March 2022, according to the Korea Real Estate Board.

South Korea relies upon exports to fuel the growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports.