Start a Profitable Business in Korea as a Foreigner

Starting a business in Korea as a foreigner requires understanding legal requirements, registration procedures, and tax obligations. This guide will walk you through the essential steps to successfully establish and operate a business in Korea.

Table of Contents

1. Choose a Business Structure

The first step is to decide on the type of business entity:

Sole Proprietorship (개인사업자) – Easy to set up, suitable for freelancers or small businesses.
Limited Liability Company (유한회사) – Offers legal protection for owners, commonly used by startups.
Corporation (주식회사) – Requires more capital and legal formalities but is ideal for large-scale businesses.

Understanding the right structure for your business is crucial as it impacts taxation, liability, and operation flexibility. Consulting a legal expert before making a decision is highly recommended.

2. Obtain a Business Visa

Foreign entrepreneurs are exploring opportunities to start a business in Korea as a foreigner in a busy commercial district.

Foreigners who want to start a business in Korea as a foreigner typically need an Investor (D-8) Visa. Requirements include:

A minimum capital investment of ₩100 million (approx. $75,000 USD).
A registered business address in Korea.
Business plan and proof of investment funds.
Company registration and financial documents.

The D-8 visa is ideal for entrepreneurs looking to establish a legitimate business in Korea. However, other visa options, such as the F-2 (long-term residence visa), may be available depending on your situation.

3. Register Your Business

A foreign entrepreneur is setting up a business in Korea as a foreigner, completing registration paperwork at the office.

To legally operate, you must register your business with the Korean government:

Check for availability and register your business name at the Supreme Court Registry Office.

Step 1: Business Name Registration

Step 2: Business Registration

Submit an application to the National Tax Service (NTS).
Required documents: Passport, Business Plan, Proof of Investment, Lease Agreement.
Receive your Business Registration Certificate (사업자등록증).

Step 3: Open a Corporate Bank Account

A local Korean bank account is needed for business transactions.
Some banks may require a resident visa or Korean business partner.
Consider banks that offer foreigner-friendly services, such as KEB Hana Bank or Shinhan Bank.

4. Tax & Accounting Compliance

All entrepreneurs starting a business in Korea as a foreigner must adhere to tax regulations.

Corporate Income Tax: Ranges from 10% to 25% based on revenue.
Value-Added Tax (VAT): Standard rate is 10%.
Payroll Taxes: Includes pension, health insurance, and employment insurance.
Annual Tax Filings: Required through the National Tax Service (Hometax).

It is highly recommended to hire a local accountant to manage tax filings and ensure compliance with Korean tax laws. Mistakes in tax reporting can lead to penalties or legal issues.

5. Business Licenses & Permits

Depending on your business type, you may need additional permits:

F&B Business: Food Safety and Sanitation License.
Import/Export Business: Customs Registration.
Education Business: Private Institute License.
E-commerce: Online Business Registration.

Failing to acquire the necessary permits can result in fines or business closure, so it’s crucial to check requirements with local authorities.

6. Hiring Employees

If hiring staff, you must comply with Korean labor laws:

Employment Contracts: Must be in writing and include salary, working hours, and benefits.
Minimum Wage: As of 2024, ₩9,860 per hour.
Work Visas for Foreign Employees: Requires employer sponsorship.
Mandatory Employee Benefits: Health insurance, pension contributions, and severance pay.

Before hiring employees, ensure you understand Korean labor regulations to avoid legal issues.

7. Common Challenges & How to Overcome Them

Starting a business in Korea as a foreigner comes with challenges. Here are common obstacles and solutions:

Language Barrier: Hiring bilingual staff or using translation services can help navigate official paperwork and contracts.
Cultural Differences: Understanding Korean business etiquette is crucial. Respect for hierarchy and indirect communication is key.
Regulatory Hurdles: Many industries require specific licenses, so consulting with a lawyer or business consultant is recommended.

8. Business Support & Resources

Several government agencies offer support for foreign entrepreneurs:

KOTRA (Korea Trade-Investment Promotion Agency) – Business consulting and investment support.
Seoul Global Business Center – Legal and financial guidance for startups.
Small & Medium Business Corporation (SBC) – Funding and grants for small businesses.
Hometax (국세청) – Online tax filing and compliance system.

Conclusion

Starting a business in Korea as a foreigner involves multiple legal and financial steps, but with proper planning, it is achievable. Understanding visa requirements, tax obligations, and business structures will help ensure a smooth startup process. For additional assistance, consulting with a business lawyer or local accounting firm is recommended.

Relevant Resources & Links

KOTRA – Starting a Business in Korea
National Tax Service (Hometax)
Seoul Global Business Center
For the latest updates on business regulations, visa policies, and expat news in Korea, visit our Expat Korea News section.

Business in Korea as a Foreigner | 2025 Guide