Korea Branch Office vs Subsidiary 2026 — Best Structure for Foreign Companies
Foreign companies entering Korea have two main entity options: Branch Office and Subsidiary.
Branch Office
A branch office is an extension of the foreign parent company with no separate Korean legal personality. No minimum capital requirement, simpler setup, but unlimited parent liability.
Subsidiary
An independent legal entity in Korea with separate legal personality. Minimum 100M KRW paid-in capital required (for D-8 visa). Liability separate from parent company.
Comparison Table
| Factor | Branch | Subsidiary |
|---|---|---|
| Legal entity | None | Independent |
| Capital | None required | 100M+ KRW |
| Setup time | 2–4 weeks | 4–8 weeks |
| Parent liability | Unlimited | Limited to investment |
| D-8 visa | Not available | Available |
| Tax | Branch tax | Standard corporate tax |
Which to Choose?
Choose Branch: Early market exploration, small-scale operations, minimizing capital.
Choose Subsidiary: Large-scale localization, D-8 visas needed, liability separation required, IPO or fundraising planned.
Frequently Asked Questions
Q1. Can we convert from branch to subsidiary later? Yes, you can establish a subsidiary while operating a branch or convert the branch to an incorporated entity.
Q2. Does a branch pay Korean taxes? Yes, Korean-source income is subject to branch tax (corporate tax + branch surtax).
Q3. Difference between liaison office and branch? Liaison cannot do revenue-generating activities — only market research and PR. Branch can conduct limited commercial activities.
Q4. Do subsidiary executives need D-8 visas? Foreign executives managing the business in Korea need D-8 visas.
Q5. Which is more tax-efficient? Depends on specific business situation. Fees vary — accurate guidance provided during free consultation.
Vision Administrative Office provides one-stop support for branch office and subsidiary establishment, including D-8 visa coordination. Get Expert Consultation →