Company Formation & Entity Setup in South Korea
Chusik Hoesa and Yuhan Hoesa incorporation via court registry filing, business registration certificate, and post-formation compliance setup.
South KoreaCurrency
KRW (Korean won)
Legal forms
Chusik Hoesa (주식회사, stock company) · Yuhan Hoesa (유한회사, limited liability company)
Minimum share capital
No statutory minimum under the Commercial Code; KRW 100 million is the practical benchmark tied to FDI registration and the D-8 investor visa
Registration body
Local district Court Registry (법인등기소) for corporate registration, followed by business registration with the local tax office
Formation timeline
2–3 weeks (commonly cited as 15–30 business days) for a Yuhan Hoesa; a Chusik Hoesa follows a comparable sequence
Corporate tax rate
Progressive 10% / 20% / 22% / 25% (FYs from 1 Jan 2026) + 10% local surtax on the national tax — up to 27.5% effective
How company formation works in South Korea
South Korea's corporate income tax is progressive across four brackets, raised for fiscal years beginning on or after 1 January 2026: 10% up to KRW 200 million, 20% up to KRW 20 billion, 22% up to KRW 300 billion, and 25% above that, with a further 10% local income tax surcharge on the national tax lifting the effective top rate to 27.5%. VAT is a flat 10% with no reduced rates. Employers also administer four mandatory social insurances — National Pension, National Health Insurance (with a linked long-term care premium), Employment Insurance and Workers' Compensation Insurance — each with its own base, cap and cost-sharing structure.
Discuss your South Korea market-entry structureMatched to your business objective
Chusik Hoesa (주식회사, stock company)
The standard vehicle for an operating subsidiary of a foreign company — the default choice for most market-entry engagements in South Korea.
Yuhan Hoesa (유한회사, limited liability company)
Used for larger operations, more formal governance needs, or entities seeking to raise capital publicly.
Branch
Useful for testing the South Korea market before committing to a subsidiary, or for keeping a single legal entity across borders. Creates a taxable presence — profits are generally taxed in South Korea.
Representative office
For market research and liaison activity only — cannot sign contracts, invoice, or trade locally in most jurisdictions.
What it takes to register, and how long
Formation runs through the Local district Court Registry (법인등기소) for corporate registration, followed by business registration with the local tax office, typically taking 2–3 weeks (commonly cited as 15–30 business days) for a Yuhan Hoesa; a Chusik Hoesa follows a comparable sequence.
- Year-end tax settlement (yeonmal jeongsan) — — the employer, not the employee, reconciles actual annual income tax liability against monthly withholding, collects deduction documentation, and finalizes the report to the National Tax Service by end-February
- Four major social insurances tracked in parallel — , each with a distinct contribution base and cap — National Pension is mid-way through an eight-year phased rate increase running to 13.0% by 2033
- 2026 corporate tax rate increase — — all four brackets were raised for fiscal years beginning on or after 1 January 2026, changing prior-year comparables for budget planning
- Workers' Compensation Insurance is employer-only and industry-rated — (0.6%–18.5%), unlike National Pension, Health Insurance and Employment Insurance, which are cost-shared with the employee
Frequently asked questions
Talk to a South Korea formation expert
The year-end settlement is the single most consequential recurring obligation for any employer of record in Korea, precisely because it sits on the employer's calendar rather than the employee's. It should be built into the payroll cycle as a hard end-February deadline, with deduction documentation collection starting well before January, not treated as a year-end formality.