♦ In principle, there are generally four ways a foreign national can enter the Korean market.
They are: establishment of a company or individual investment, which are both based on
FIPA; or establishment of a branch or liaison office, which are based on the Foreign
Exchange Transactions Act.
– The establishment of a company (minimum KRW100 mil.; for two investors, min. KRW100
mil. investment each) and individual investment of at least KRW100 mil. will be regarded
as foreign investment in accordance with FIPA.
– A branch of a foreign headquarters has to pay the same corporate tax rate as domestic
companies for their profits made in Korea, and a liaison office can only conduct non-
profit-making business activities for its headquarters and thus is not considered foreign
investment.
| Foreign-invested company | Domestic branch of a foreign company | |
| Applicable Legislation | Foreign Investment Promotion Act | Foreign Exchange Transactions Act |
| Corporate Identity | Domestic company | Foreign company |
| Relationship | Foreign investor and invested company are separate (accounting and settlement of accounts are separate) | Headquarters and branch are the same (accounting and settlement of accounts are not separate) |
| Notification and Approval | Invest KOREA and KOTRA offices in Korea and overseas as well as foreign exchange banks and their branches | Foreign exchange banks for notifications and Financial Supervisory Service for approvals |
| Investment Amount | Minimum KRW100 mil. (no maximum amount of investment) | No limitation |
