Guide to Establishing a Foreign Company Branch in Korea 2026

1. What is a Foreign Company Branch?

A foreign company branch is a dependent business entity established in Korea by a foreign corporation under Article 2 of the Foreign Investment Promotion Act and Article 614 of the Commercial Act. It operates as an extension of the head office without separate legal personality and can enter contracts and generate revenue in the branch's name.

2. Legal Basis

Article 614 of the Commercial Act requires that foreign companies engaging in continuous transactions in Korea register with the court. Additionally, under Article 18 of the Foreign Exchange Transactions Act, remittance of funds requires reporting to the Bank of Korea.

3. Eligibility Requirements

• Country of incorporation: Legal entities from any country with diplomatic relations with Korea
• Capital: No minimum capital requirement (varies by industry license)
• Representative: Appointment of a responsible representative (agent) in Korea is mandatory
• Office: An actual business premises must be secured

4. Required Documents

• Corporate registration application form (court format)
• Head office articles of incorporation and certificate of incorporation (notarized + apostille or consular authentication)
• Board resolution (decision to establish branch)
• Branch representative appointment letter
• Branch representative's seal certificate and ID copy
• Korean office lease agreement
• Foreign exchange transaction reporting documents (for fund remittance)

5. Registration Procedure

1. Obtain notarization and apostille for head office documents (in home country)
2. Submit corporate registration at the competent court commercial registry
3. Business registration (competent tax office)
4. Foreign exchange transaction reporting (Bank of Korea or foreign exchange bank for fund remittance)
5. Obtain industry-specific licenses (if applicable)

6. Operational Obligations

• Corporate tax filing and payment (within 3 months after fiscal year end)
• VAT filing and payment (quarterly)
• Four major social insurance enrollment (upon hiring employees)
• Preparation of financial statements (check external audit requirements separately)

7. Taxes and Accounting

Branches have independent corporate tax filing obligations. Corporate tax (rate 9–24%) is levied on income generated in Korea. Internal transactions with the head office (transfer pricing) are subject to the arm's length principle under the Law on Coordination of International Taxes.

8. Difference from Liaison Office