Establishment of
Local Corporation
-
The
Procedure for Local Corporation Establishment
The procedure for establishing a local
corporation consists of foreign investment notification, registration of
incorporation, registration of business and foreign-invested company
registration. The following provides the details of the important steps of the
incorporation registration procedure and business registration procedure.
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The Procedure for Stock Company Establishment
Partnership company, joint stock
company, limited liability company, stock company and incorporated company are
recognized as companies under the Commercial Act. As most companies fall into the
category of "stock company," the procedures of stock company
establishment will be explained here.
Types of Stock Company Establishment
There are two types of stock company
establishment: promotion of incorporation and subscriptive incorporation.
Promotion of incorporation means that promoters subscribe for all of the shares
issued at the time of incorporation. Subscriptive incorporation means promoters
do not subscribe all the shares issued at the time of incorporation and offer
shares for subscription.
Registration of Incorporation of Stock Company
The
registration of incorporation of a stock company shall be effected within two
weeks from the day when the investigation in the process of establishment has
been completed in cases where the promoter subscribed for all the shares issued
at the time of incorporation, and within two weeks from the day on which the
inaugural general meeting has been closed in cases where the promoters have
offered shares for subscription. The composition of promoters and whether the
trade name or title has been used by other companies shall be reviewed before
the registration. Since no trade name which has been registered by another
person shall be registered as a trade name of the same kind of business in the
same Seoul Special Metropolitan City, Metropolitan City, and city/gun, the
company name shall be checked in advance on the Supreme Court website (www.iros.go.kr).
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Required Documents in Registration of Incorporation |
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1. Application for the
registration of the incorporation of a stock company
2. Articles of incorporation (It shall be notarized by a public notary -
Notarization is exempted where the total capital of the newly incorporated
stock company is less than one billion won.)
3. Documents certifying subscription for shares
4. Subscription form (in the case of subscriptive incorporation )
5. Written consent to matters concerning issuance of shares
6. Written consent to the shortening of the period for notice of convocation
before the date of the inauguration general meeting (if the period is
shortened)
7. The minute of the inaugural general meeting (It shall be notarized by a
public notary. Notarization is exempted where the total capital of the newly
incorporated stock company is less than one billion won.)
8. The minute of the Board of Directors (It shall be notarized by a public
notary. Notarization is exempted where the total capital of the newly
incorporated stock company is less than one billion won.)
9. A certificate of paid-up stocks or balace certificate
10. An investigation report of a director, auditor, or the audit committee
11. Certificate of the delivery of pertinent property (in the case of
investment in kind)
12. The public notary's report on particulars of abnormal incorporation
13. A written statement by an appraiser
14. A certified copy of the report by an inspector |
15. Report certificate
of foreign investment
16. Certificate of inauguration acceptance
a. A Korean national shall put his/her seal on the certificate, and attach a
certificate of the seal and a certified copy of resident registration
b. A foreign national should attach the original copy with his/her signature
notarized and a copy of his/ her passport
17. Certificate of seal registration (with his/her signature notarized)
18. Resident registration certificate (certification of address)
19. Translation of documents (in cases where the required documents including
the director’s inauguration acceptance are written in a foreign language)
20. Receipt for payment of registration tax (issued by the district office
which has jurisdiction over the area where the company headquarters is
located)
21. Revenue stamp of the Supreme Court of Korea
22. Power of attorney (where an agent makes the application)
23. Corporate seal 24. Application form for issuance of corporate seal card
(after registration of incorporation)
* The foregoing 11, 12, 13 and 14 are applicable in cases where there are
particulars of abnormal incorporation, such as in-kind investment. |
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For documents 16, 17 and 18, an
Apostille is required. In the case of countries that are not signatories of the
Apostille Convention, notarization by the consul in Korea is required after
obtaining notarization in the home country.
Required Documents for a
Foreign Investor
The
documents a foreign investor shall submit differ, depending on whether the
investor concerned is an individual or a corporation. A foreign investor of
Japan and Taiwan shall submit the same documents with a national of the
Republic of Korea and a Korean corporation.
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A report card of seal
impression |
Put a seal or signature on a
report card of seal impression and have it notarized |
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A certificate of
inauguration acceptance a certificate of seal impression |
Those who are inaugurated as
executives of new corporations
- Korea/Japan/Taiwan: put a seal on the certificate of inauguration
acceptance with a certificate of seal impression attached
- Other countries: put their sign on the certificate of attorney and have it
notarized |
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Abstract of resident
registration or Address certificate (for CEOs) |
Attached to a certificate of
inauguration acceptance
- Korea/Japan/Taiwan: Abstract of resident registration or card - Other
countries: notarized address certificate of respective countries
(not a requirement for directors and auditors) |
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Power of attorney |
When delegating registration
of foreign investment
- Japan/Taiwan :Put a seal on the power of attorney with a certificate of
seal impression attached
- Other countries :put their sign on the power of attorney and have it
notarized |
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Passport copy |
All foreigners |
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Corporate certified copy of
register (Corporation as investors) |
Taiwan and Japan:1 copy of
certified copy of register Other countries: Certificate of corporation with
notarization |
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Corporate report card of
seal impression (for newly founded corporations) |
Put a seal or signature on a
report card of seal impression and have it notarized |
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A certificate of
inauguration acceptance a certificate of seal impression |
Those who are inaugurated as
executives of new corporations
- Korea/Japan/Taiwan: put a seal on the certificate of inauguration
acceptance with a certificate of seal impression attached
- Other countries: put their sign on the certificate of attorney and have it
notarized |
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Abstract of resident
registration or a certificate of address (for CEOs) |
Attached to a certificate of
inauguration acceptance
- Korea/Japan/Taiwan: Abstract of resident registration or card
- Other countries: notarized address certificate of respective countries (not
a requirement for directors and auditors) |
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Power of attorney |
When delegating registration
of foreign investment
- Japan/Taiwan: put a seal on the power of attorney with a certificate of
seal impression attached
- Other countries:put a signature of CEO and have it notarized |
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Passport copy |
All foreigners |
Stock Company Establishment Costs
Registration
tax, local education tax, registration application fees etc. are the costs
involved in establishing a stock company.
|
Item |
Details |
Costs |
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Registration Tax |
0.4% of the capital, 3 times
when a stock company is established in an overpopulation control area |
1,200,000 won |
|
Local Education Tax |
20% of registration tax |
240,000 won |
|
Revenue Stamp of Supreme
Court |
Fee for registration
application |
30,000 won |
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Notarization Fee |
Articles of association,
etc. (exempted in case of promotion of incorporation whose capital is KRW 1
billion or less) |
Approx. 1,000,000 won |
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Total |
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Approx. 2,470,000 won |
Business
Registration
Business
registration may be carried out at a jurisdictional tax office of the company
headquarters or at all tax offices, or at KOTRA (Inbound Investment Consulting
Division). It shall be done within 20 days after the commencement of business
operation.
Required Documents
Application form for incorporation notification
and business registration
A certified copy of corporate registration
certificate
A copy of the articles of association
Specification of shareholders or investors
A copy of the lease contract (if the business
establishment has been leased)
A copy of the foreign investment notification form
and foreign currency purchase (or deposit) certificate
A copy of the representative’s alien registration
card or passport
A copy of the foreign currency purchase (or
deposit) certificate
Additional documents when required
- A copy of
the power of attorney and the agent’s ID when applying through an agent
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Notification form of the appointment of a tax agent (in the case where the
representative is a non-resident)
- A copy of
the required business permit, registration or notification certificate in the
case of government licensed businesses
In cases where a foreign
investor makes an investment in kind to establish a corporation, a certificate
of business registration is required to receive value added tax refund when the
object of investment in kind clears customs. Therefore, the business
registration has to be completed prior to the import of investment object.
Required Documents for Business Registration Prior
to Investment
Application form of business registration
Certified copies of resident registration of all
promoters
Application form for business permission (where
the business requires authorization and permission)
Business plan
* A certified
copy of corporation registration is not required when applying for business
registration, while all other required documents shall be submitted after
establishing the company.
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