Procedures ofcorporation Establishment

Foreign Investment Promotion Act offers taxcuts and benefits to foreign invested companies which make a certain amount ofinvestment. The investment capital should exceed 100 million won and where investmentshares exceed 10 percent it is subject to notification of investment and iseligible for tax benefits.

If the investment capital does not exceed 100million won Foreign Currency Regulation is applied but cannot be deemed aforeign invested company.

(1) Professional consultation beforeestablishing a company in Korea

In order to decide the type of investmenthaving professional consultationis very important to save time and energy to have required documents and foreign investment notification thoroughlyprepared.

Ø  Checkthe products and services and categories of business (Korea standard industrialclassification(KSIC))

Ø  Decidethe type of corporation (stock company, limited company etc.)

Ø  Decidethe scale of investment and equity structure (whether the investment meets therequirements of the Foreign Investment Promotion Act)

Ø  Decidethe site of business

(2) Fill out foreign investment notificationform (English and Korean)

Ø  Thecategory of business: business and services on Korea standard industrialclassification

Ø  Investmentmoney: KRW 100 million or more per investment

Ø  Proportionof investment: 10 percent or more per investment

Ø  Investor'scompany name and nationality

Ø  Investingcompany's trade name and address

(3) Foreign investment notification and foreigninvestment notification certificate

Ø  Makenotification to KOTRA or headquarters and domestic branches of delegatedforeign banks

Ø  Wherethe capital is remitted in advance changing the remittance must be after the notification

(4) Transfer of paid-in capital to corporateaccount

Ø  Transferringpaid-in capital to corporate account is usually carried out right after foreigninvestment notification but it does not matter if it's done before notificationbut exchanging the capital for Korean Won must be after notification.

(5) Preparation for required documents beforecorporation establishment

The procedures of foreign-invested corporationare the same with what are required for domestic corporation establishment.However where the share-holders or executives are foreigners more documentsshould be prepared which needs more time and energy preparing for requireddocuments. The required documents differ based on the fact weather the foreignshare-holders or executives stay in Korea.

(6) The procedure of registration ofincorporation

Ø  Theprocedures are the same with what domestic corporations go through inregistration of incorporation but foreign-invested companies are required tosubmit more documents.

(7) Registration of incorporation and businessregistration

Ø  Aftercompleting registration of incorporation applying for business registration isrequired to the tax office having jurisdiction over the place of tax payment

Ø  Oncebusiness registration certificate is issued opening a corporate account isrequired as a next step

Ø  Then,paid-in capital should be transferred to corporate account and then make acorporate credit card

(8) Application for foreign-invested companyregistration certificate

Ø  Applyfor foreign-invested company registration

Ø  Startbusiness in Korea as a foreign-invested company

(9) Issuance of the D-8 corporate investmentvisa

Ø  D-8corporate investment visa is issued and granted for an investment exceeding KRW100 million