Below is a brief account of the procedures and requirements for incorporating a company (“Chushik hoesa” in Korean language) in Korea from a foreign investor’s perspective.
- REPORT ON FOREIGN INVESTMENT
Prior to the establishment of the company (the “Company”), the foreign investor which will officially invest foreign capital in the Company must submit to a designated foreign exchange bank in Korea a Report on Foreign Investment.
In order to prepare the Report on Foreign Investment, the following information is required:
- Information on the foreign investor
– Trade name
- Jurisdiction of incorporation
- Address of head office
- Information on the Company
- Proposed equity capital of the Company
- The amount of the total foreign investment of capital in the Company
- A list of conceivable businesses in which the Company might be involved.
- Proposed corporate name of the Company
- Power of Attorney
- The foreign investors should appoint a local person to prepare the Report of Foreign Investment and to establish and register the Company.
- COMPANY ESTABLISHMENT
When the designated foreign exchange bank accepts the Report on Foreign Investment, the Company may be established.
To establish the Company, the following procedures will be taken.
- Preparation of the Company’s articles of incorporation.
The authorized capital of the Company must be determined for inclusion in the articles. In this regard it should be noted that under Korean law, the authorized capital may be up to 4 times the amount of the share capital at the time of the incorporation of a company.
- b) The necessary capital to be invested in the Company will be deposited in a foreign exchange bank in Korea in preparation for subscription.
- c) Pay the subscription amount into the Company’s account in a Korean bank.
- e) Holding of statutory general meeting. At the statutory general meeting, directors and the statutory auditor shall be appointed.
- f) Registration of the official seal (chop) of the Representative Director. A foreign Representative Director must complete, sign and have notarized a Report on Seal Impression, in which document personal data of each individual Representative Director/director are stated.
- g) When the aforementioned documents have been completed, the Company will be registered. After the registration, the Company will also receive a business ID from the local fax office.
The incorporation can be completed upon court registration of the Company. The tax office registration requires a copy of a lease agreement evidencing the Company’s actual presence in Korea.