Foreign entities can set up branches in Korea without investing.
Advantages of Establishing a Branch Office
Unlike the establishment of a foreign-invested company, setting up a branch office in Korea does not require invested capital. A branch office is still recognized as a legal entity in Korea and can engage in revenue-generating business activities within the country. In addition, if necessary, once the requirements for the D-7 visa are met, employees from the overseas headquarters can be dispatched to Korea to work at the branch.
Disadvantages of Establishing a Branch Office
Since a branch office is classified as an extension of the overseas corporation, any business-related liabilities or legal issues are attributed directly to the foreign headquarters. In addition, a branch office is not eligible for certain benefits available to domestic corporations in Korea, such as SME (Small and Medium-sized Enterprise) registration.
Closing an established branch office and re-establishing another type of company requires significant time and costs. Therefore, it is advisable to carefully consider the scope and future expansion of your business in Korea before deciding on the type of entity to establish.
Preparing for overseas headquarters
The overseas headquarters must have the following documents notarized either by Apostille or by a Korean Consulate and submit them.
- Certificate of Incorporation
- Articles of Incorporation
- Shareholder List
- Board resolutions
- Inauguration acceptance letter
- Notarize the address signature
- A copy of the headquarters representative’s passport
- Copy of the passport of the representative of the Korean office (ID if Korean)
- Letter of appointment for representative in Korea
- Power of Attorney
In-country documentation
- office lease agreement
- Copy of passport, seal stamp, seal declaration (if branch manager is Korean)
Preparing Apostilled documents from the overseas headquarters usually takes the most time, but once the documentation is ready, the entire procedure can be completed in about one week.
| Procedure | Timeline |
| Notarization and apostille of foreign headquarters documents | |
| -> Report of establishment of a domestic branch of a foreign company (foreign exchange bank) | 1 day |
| -> Report Designation of Foreign Correspondent Bank for Transactions (Foreign Correspondent Bank) | 1 day |
| -> Domestic Branch Corporation Registration (Registrar of Companies) | 4 days |
| -> Business License Issuance (Jurisdictional Tax Office) | 2 days |
| – Open Corporate Bank Account at> (Bank) | 1 day |
If the business address changes, it is necessary to file a change report for the foreign company’s domestic branch and amend the corporate registration. In relation to the changes, the relevant documents from the overseas headquarters must be Apostilled and submitted.
If a branch office relocates to an address outside the competent jurisdiction, you may be required to file a closure (deregistration) of the branch and then re-register it at the new location. Therefore, please decide the office address carefully from the outset.
If the representative director of the domestic branch is changed, a branch change report, an amendment to the corporate registration, and Apostilled documents from the headquarters related to the change are also required.
- Resignation letter
- Inauguration acceptance letter
- Board resolutions
- Signature Notarized
- Seal declaration (Japan)
- Corporate seal, corporate card
After a foreign company establishes a domestic branch, it can apply for a D7 expatriate visa if it meets certain requirements.
D7 visa application conditions
- The dispatched person must have worked at the head office for at least one year.
- Depending on the size of your foreign headquarters and the amount of working capital you bring in, you may be approved for a D7 visa
- Visa qualification cannot be changed in Korea (issued as an invitational visa)
- Except for the representative, you must prove that you are a professional.
If a foreign corporation has a permanent establishment, it must report and pay business income as well as domestic source income related to that permanent establishment.
- You can hire foreign employees locally with an E7 work visa.
- Only income generated in Korea is subject to tax.
Why hire an Ima Korea administrative agency?
- We have extensive experience dealing with foreigners/foreign companies and handle them quickly and accurately.
- In order to eliminate errors in the preparation of documents, the overseas headquarters will prepare the documents that need to be apostilled in both foreign languages and Korean. You only need to send the apostille to the headquarters.
- Provide sample documents, translation, filing, registration, business license, bank account opening, etc.
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