liaison office is established to carry out tasks such as local contact work, market research, research and development, and contracts before a foreign company starts full-scale business activities in Korea.
The key difference between a liaison office and a branch is the availability of profitable sales activities. Liaison offices are only allowed for non-business activities, and direct sales or sales agents from overseas headquarters are not permitted.
Establishing a liaison office is simpler than establishing a foreign-invested corporation or branch office because it does not require court registration procedures.
However, it may be difficult for foreigners to do this on their own, as they have to prepare necessary documents for each step, such as reporting the establishment of a liaison office to the bank and tax office, reporting foreign exchange transactions, and opening a foreign exchange account, and various notarized documents are required. Therefore, seeking professional help can save you time and money.
- Foreign head office corporate registration certificate (notarization required)
- Minutes of board of directors at foreign headquarters (notarization required)
- A copy of the passport of the representative of the foreign head office
- A copy of the Korean representative’s passport
- Power of Attoney
- A copy of the domestic liaison office rental agreement
- Foreign company documents notarized and sent to Korea
- Notification of establishment of liaison office
- Issuance of foreign exchange remittance account
- Issuance of business registration certificate (unique identification number)
- opening a bank account
After establishing a liaison office, you can apply for a D7 expatriate visa. If there is no introduction of operating funds after the establishment of the liaison office, it may be difficult to issue a D7 visa.
D7 visa application conditions
- The dispatched person must have worked at the head office for at least one year.
- In the case of less than one year of installation, the operating capital introduction amount must be at least 500,000 USD.
- Visa qualification cannot be changed in Korea (issued as an invitational visa)
- Except for the representative, you must prove that you are a professional.
- There is no obligation to report and pay corporate tax.
- There is no obligation to report and pay VAT because business activities are not possible
- If an employee receives wages from a foreign corporation, there is no obligation to pay withholding tax and the 4 major insurance reports.
- If an employee is paid with a domestic bank account, they are obligated to withhold tax and report the 4 major insurances.
- Foreign exchange in the Republic of Korea, foreign exchange transactions in the Republic of Korea, and other acts related thereto
- Transactions between the Republic of Korea and foreign countries, payment, receipt, and other related acts (including acts performed in a foreign country that have the effect in the Republic of Korea)
- Transactions between an individual with a domicile or residence in a foreign country and a corporation with a main office in a foreign country that can be displayed or paid in Korean currency and other acts related thereto
- An act performed by an individual or his/her agent, employee or other employee with a domicile or residence in the Republic of Korea in relation to the individual’s property or business in a foreign country
- Activities performed by a representative, agent, or other employee of a corporation whose main office is located in the Republic of Korea in relation to the property or business of the corporation in a foreign country;
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