Establishment of a local corporation

Contents
1. Procedures for establishing a local corporation
2. Procedures for Establishing a Stock Company

When a foreign investor establishes a local corporation in Korea, it is almost the same as the general domestic corporation's establishment procedure. However, you must report foreign investment before the establishment of a local corporation and proceed with the registration process of a foreign-invested company after the establishment.

Procedures for establishing a local corporation

The process of establishing a local corporation consists of reporting foreign investment, registration of incorporation, business registration, and registration of foreign-invested companies. Here, we will take a detailed look at the important corporate establishment registration and business registration procedures for establishing a local subsidiary.
 
1. Foreign Investment Declaration (KOTRA or Foreign Exchange Bank)
2. Transfer of investment funds (foreign exchange bank, customs portable transfer)
3. Registration of incorporation (Court Registry)
4. Corporate establishment report and business registration (tax office or KOTRA)
5. Transfer of paid capital to corporate account (foreign exchange bank)
6. Registration of a foreign-invested company (first reporting agency)

Procedures for Establishing a Stock Company
There are five types of companies recognized under the Commercial Act, including joint ventures, limited liability, and limited stock companies, but since the proportion of stock companies accounts for the absolute majority, we will focus on the process of establishing a stock company.
(1) Type of establishment of a corporation
First of all, the methods of establishing a corporation are the establishment of a promotion and the establishment of a recruitment. Establishment is a method in which the promoter acquires all the stocks issued at the time of establishment and establishes a company, and the promoter acquires only a part of the total number of stocks issued at the time of establishment and recruits shareholders for the remaining part.
(2) Registration of establishment of a corporation
The registration of the establishment of a corporation must be made within two weeks from the end of the investigation of the progress of establishment in the case of the establishment of a company, and within two weeks from the end of the founding meeting in the case of recruitment establishment.
Before you register, you must first review the promoter composition and the same name. Also, the same trade name as registered by another person for the same business within the same Seoul Metropolitan Government, metropolitan city, city, or county, etc.
Attachment of incorporation registration
1. Application for registration of incorporation of a corporation
2. Articles of Incorporation (notarized if the capital is more than KRW 1 billion)
3. a written document certifying the acquisition of shares
4. Stock subscription (in case of recruitment establishment)
5. Consent to the issuance of shares
6. Consent to shorten the period of the convening of the inaugural general meeting (when the period is shortened)
7. Minutes of the inaugural general meeting or minutes of the promoter's meeting (notarized if the capital is more than KRW 1 billion)
8. Minutes of the Board of Directors (notarization obligation is the same as in the preceding paragraph)
9. Certificate of main payment or balance
10. Investigation report by director, auditor, or audit committee
11. Property delivery certificate (in case of investment in kind)
12. Report on the establishment of metamorphosis by notaries
13. a written appraisal by an authorized appraiser
14. A copy of the inspection report
15. Foreign Investment Reporting Certificate
16. Acceptance letter of acceptance as an acceptance letter
① Koreans: Attaching a certificate of seal and a copy of resident registration after stamping
② Foreigner: Original notarized signature, passport copy attached
17. Seal report (signature notarization) *
18. Copy of resident registration (address certificate) *
19. Translation (if the required document, such as the inauguration acceptance letter of the executive, is written in a foreign language) *
20. Confirmation of receipt of registration tax (issued a bill by the district office and tax department where the head office is located)
21. the revenue stamp of the Supreme Court
22. Power of attorney (if an agent applies)
23. a corporate seal stamp
24. Application for issuance of corporate seal card (after registration of establishment)

※ 11, 12, 13, Item 14: Where there is a transformation establishment, such as investment in kind, etc
*In the case of 16, 17, and 18, apostille notarization is the principle. However, in countries where the Apostille Convention has not been signed, notarization of the consulate is required after notarization on site
※ Preparation of submission documents by foreign investors
• The documents that an investor needs to prepare abroad depend on whether the investor is an individual or a corporation, and if it is a Japanese and Taiwanese investor, it is the same as the documents prepared by individuals and corporations in Korea.




<Preparation documents for individual investors>
a corporate seal declaration The representative director of a corporation established in the personal seal stamp column of the corporate seal report or notarization after signing or signing (if there is no seal certification system)
an oath of office
a certificate of seal all members who take office as officers of an incorporated corporation
• Korea/Japan/Taiwan: Attachment of seal certificate after seal day to the inauguration certificate
• Other countries without a certification system: Notarization after signing the oath of office
An abstract of resident registration or proof of address of the CEO Attached to the Acceptance of Inauguration
• Korea/Japan/Taiwan: An abstract of resident registration or resident card
• Other countries: the certificate of address of the country or the certificate of address notarized
(However, it is not necessary for directors and auditors who are not representative directors)
a delegation When delegating foreign investment reporting duties, etc.
• Japan/Taiwan: Attaching a certificate of seal after stamping on the power of attorney
• Other countries without a certification system: Notarization after signing the power of attorney
a passport company All foreigners
<Preparation documents for corporate investors>
a copy of the corporate register
(An Investor Corporation) Taiwan/Japan Corporation: 1 copy of corporate registration
Other countries: Notarial deed on the document of the country's legal certificate or documents proving the existence of the legal entity
a corporate seal declaration
(Corporation to be established) The representative director of a corporation established in the personal seal stamp column of the corporate seal report or notarization after signing or signing (if there is no seal certification system)
the inauguration of the inauguration
a certificate certificate Power to take office of the corporation
• Korea/ Taiwan/Daeun: The Office of Education after the inauguration of the inauguration
• Except for the certificate system: After signing ceremony, the public certificate
An abstract of resident registration or proof of address of the CEO • attached to the inauguration of office
• Korea/ Taiwan/ Taiwan: resident registration elementary or resident registration
Other countries: the certificate of address of the country or the certificate of address notarized
(However, it is not necessary for directors and auditors who are not representative directors)
power of attorney If you delegate a foreign investment report,
• Japan/Daeun: The company's personal inspection after a corporation, and attachment certificate
• Other countries: The CEO of investment corporations in the delegation of investment corporation
a copy of one's passport all foreigners

(3) Cost of establishing a corporation
Expenses incurred when establishing a corporation include registration tax, local education tax, and registration application fee

<Case of company establishment cost (based on capital of 100 million won, overcrowded control area in the metropolitan area)>
Details Cost
registration tax 0.4% of the capital, three times more heavy when established in overcrowded control areas in the metropolitan area 1,200,000 won
local education tax 20% of the registration tax 240,000 won
the revenue stamp of the Supreme Court a fee for registration fee 30,000 won
notarization Articles of Incorporation, etc. (Some documents are exempted from notarization in case of establishment of less than KRW 1 billion) 약 1,000,000 won
Total 약 2,470,000 won
* Other charges may be incurred for attorney or attorney.

(4) Business registration
Business registration can be done at the tax office (or any other tax office under the jurisdiction of the head office) and the KOTRA Investment Consultation Office, and must be done within 20 days from the business commencement date.

※ Submission documents
• Application for business registration
• In the case of a corporation: a statement of shareholders or investors, a copy of the articles of incorporation, a copy of the corporate register
• A copy of the lease agreement (if the place of business is leased)
• a copy of a foreign investment declaration, a certificate of foreign exchange purchase (or foreign currency deposit certificate)
• A copy of the representative's alien registration card or passport
• Additional documents to be attached if applicable
- A copy of the power of attorney and the representative's identification card if the application is made through an agent
- Tax administrator's establishment report if it is not over in Korea
- A copy of a business license, registration, and report completion certificate for a government-licensed project
• Statement of funding sources (now wholesale/retail, household and vehicle fuel-related industries, materials for recycling, collection and sales, Persons engaged in taxation entertainment venues)
If a foreign investor establishes a corporation by investing in kind, a business registration card is required to receive a refund of VAT when customs clearance of the object of investment in kind, so business registration must be completed before importing the object of investment.

※ Documents to be submitted in case of business registration first (when investing in kind)
• Application for business registration
• a copy of the resident registration of all promoters
• Application for business license (if it is an authorization project)
• a business plan

* When applying for business registration, a copy of the corporate registration shall not be submitted, and all other necessary documents shall be submitted after the establishment of the company