What is a Korean Branch Office for a Foreign Corporation?
A Korean branch office (국내지사) is one of the most accessible ways for foreign companies to enter the Korean market. Unlike establishing a separate Korean subsidiary, a branch office operates as an extension of the parent company and can conduct revenue-generating business activities.
Branch Office vs. Liaison Office Comparison
| Category | Branch Office | Liaison Office |
|---|---|---|
| Business Activities | Permitted (revenue-generating) | Not permitted (non-commercial only) |
| Corporate Tax | Required | Not applicable |
| Setup Process | Foreign exchange bank notification | Foreign exchange bank notification |
| Best For | Sales and service delivery | Market research, promotion |
Requirements
- Parent company must be a foreign corporation with a main office abroad
- Purpose: conducting business activities in Korea
- Branch manager appointment required (foreigners eligible)
Setup Procedure
- File branch office establishment notification at a foreign exchange bank
- Register the foreign company at the court (Commercial Act Article 614)
- Apply for business registration at the tax office
- Prepare visas for foreign employees (D-7 intra-company transferee visa, etc.)
Tax and Accounting Obligations
- Corporate tax on Korea-sourced income
- VAT registration and filing
- Annual financial reporting
Frequently Asked Questions
Q1. Is there a minimum capital requirement for a branch office? A. There is no statutory minimum capital. However, sufficient operating funds for the scale of business are needed.
Q2. Does the branch manager need to reside in Korea? A. Yes, practically speaking. The branch manager must be able to conduct operations in Korea.
Q3. What visa do foreign staff at the branch need? A. Staff dispatched from the parent company typically need D-7 (intra-company transferee) visas. Locally hired foreign staff need appropriate work visas (e.g., E-7).
Vision Immigration Law Office handles foreign branch office registration — from foreign exchange bank notification to court registration and tax filing. Initial consultation is free.