Foreigners wanting to enter Korea have to be in possession of a valid passport and a visa issued by a Korean embassy or consulate. However, in the following cases, it is also possible to enter the country without a visa:

– In possession of a permission for re-entry and returning to Korea before its expiration
date;
– Citizen of a country having a visa waiver agreement with Korea, and thus according to
the agreement being exempt from a visa;
– Working for a foreign government or an international organization and without a visa due to unforeseen circumstances;
– Purpose of travel or transit;
– Other reasons determined by the Minister of Justice where the entry to the country will
bring benefits to Korea.

Regarding the visa waiver agreement, it is in principle limited to foreigners for the purpose of short-term travel or visit (less than three months) without conducting profit-making business or any paid activities.
As of end of April 2004, there are a total of 78 countries having concluded a visa waiver agreement with the Korean government including the United Kingdom, France, Germany, Singapore and New Zealand. Citizens from these countries receive a B-1 visa waiver with a specific period of sojourn (usually 3 months).Countries with visa-free entry permission to Korea as of April 2004 totaled 50 countries, including the USA, Canada, Japan, and Australia. If citizens from these countries wish to enter the Republic of Korea for the purpose of travel or transit, they will be issued a B-2 visa with a sojourn period of 30 days. However, citizens of Canada are allowed 6 months, and citizens of Australia, Hong Kong and Slovenia are allowed 90 days sojourn (based on reciprocity).Citizens from countries, with which no diplomatic have yet been established, such as Cuba and Macedonia, as well as citizens of countries with many illegal entries to Korea, such as China, Mongolia, the Philippines, Nepal and Nigeria are not allowed entry without a visa.

There are generally two types of visa: single entry and multiple entry.

– Single entry visas have a validity of three months from the date of issue.
– Multiple-entry visas have a validity of principally one year from the date of issue.
However, holders of diplomatic and government passports are issued a visa with a
validity of three years. Visas issued by agreement are valid until the date of
agreement.

In practice, the types of visa can be divided into four categories:

1. Visa for foreigners conducting diplomacy, official duty and negotiation (SOFA) and their
families: diplomacy (A-1), official duty (A-2), agreement (A3).
2. Visa for non-profit activities and short-term stay (less than 90 days): temporary news
coverage (C-1), short-term business (C-2) and short-term visitors (C-3).
3. Employment visa: short-term employment (C-4), professors (E-1), teaching foreign
languages (E-2), research (E-3), special technology instruction (E-4), special
occupations (E-5), arts and entertainment (E-6), other particular occupations (E-7),
industrial trainees employment (E-8), non-special employment (E-9),
working holiday (H-1).
4. Others: culture/art (D-1), students (D-2), industrial trainees (D-3), general trainees
(D-4), residence reporters (D-5), religious workers (D-6), intra-company transferee
(D-7), treaty investors (D-8), treaty traders (D-9), visiting and joining families (F-1),
residence (F-2), dependent families (F-3), overseas Korean residents (F-4),
permanent residence (F-5), others (G-1).

Further information about visa issuance: refer to the English homepage of the Ministry of Justice. ww.moj.go.kr/english/index.php

Korea has a system to manage the immigration and period of sojourn of foreigners, of which requirements for sojourn refer to the social activities or personal status the foreigner can assume during his stay in Korea. They are therefore a standard for managing the sojourn of foreigners.So if a foreigner entering Korea meets specific requirements, he or she is guaranteed sojourn in Korea as long as he or she maintains the authorized activities or personal status. However, if the person?s circumstances have changed or engagement in other activities is planned, the foreigner must apply for a visa of another type corresponding to his or her desired activities or status.In general, countries define sojourn requirements and apply the appropriate visa to the requirements in order to facilitate the management of foreigners entering the country. Thus, with the issue of the visa, the conditions for sojourn are given at the same time (‘one-time inspection’). There exists also the “double inspection”, which means that the visa is only an entry inspection, and the immigration inspector will issue separate sojourn permission. Korea falls into the former category of a “one-time inspection”.Accordingly, the Korean visa contains both, the sojourn conditions and requirements as well as the sojourn period. Thus, the foreigner is permitted to stay in Korea during that period under the given conditions. If the foreigner wishes to engage in employment in Korea, a C-4 visa or an E-range visa has to be issued. Work is only permitted in the designated workplace.The requirements and conditions for sojourn are composed of alphabetic letters and numbers (ex. A-1). There are presently 34 types of visas according to Art.12 (appendix 1) of the Enforcement Decree of the Immigration Control Act.Korea distinguishes between short-term sojourn (less than 90 days) and long-term sojourn (91 days and longer). Foreigners who wish to stay longer than 91 days in Korea have to apply for alien registration within 90 days of the date of their entry

A visa allows the legal entry into and sojourn in a foreign country under the conditions of the visa, which may vary according to the type of visa. Furthermore, it confirms the validity of the passport and its legal status through its issue by the foreign government. A visa is perceived in some countries as a “confirmation of permission to enter the country”, and in other countries as a “recommendation of the consulate to enter the country”. The United States, Japan and Korea perceive the issue of a visa as a “recommendation of the consulate”.Accordingly, even if a foreigner who wishes to enter Korea and is in possession of a valid visa, he or she might get rejected by an official at the immigration if the person does not meet certain entry requirements — for example, in case of prohibited entry, attempting illegal employment, or having no specific reason for entry, etc.The right to issue a visa is in the hands of the Ministry of Justice. But it can be transferred also to the heads of other government institutions such as embassies, government agencies, consulates, and consular offices

=> Some 95% of all Korean companies are chusik hoesa (stock, or incorporated
companies) with very few of the other three kinds of companies, namely hapmyung
hoesa (partnership companies), hapcha hoesa (limited partnership) and yuhan hoesa
(limited liability companies).

=> The procedure for incorporation is as follows:

1. Organizing promoters (at least one promoter is required);
2. Studying the existence of similar company names;
3. Inaugural meeting of promoters and preparation of minutes;
4. Preparing and notarizing the articles of incorporation;
5. Deciding matters concerning the issuance of shares (incorporation through
subscription and incorporation through promotion)
6. Subscription and distribution of shares;
7. Capital contribution (including contribution in kind);
8. Inquiry about progress of establishment;
9. Inaugural general meeting;
10. Board of directors meeting;

=> Objective of registration: The incorporation is completed through the registration and
has the objective to notify about the incorporation of the company as well as about the
general principles of its organizational structure.

=> Period of registration:

– Incorporation through promotion: within two weeks from the date of terminating the
inspection about the incorporation process.
– Incorporation through subscription: within two weeks after closing the inaugural general
meeting or procedures according to Art. 314 of the Commercial Act were completed.

=> Contents of the registration (Art. 314)

• Purpose, trade name, total number of shares authorized to be issued, par value per share, method of public notice, and place
of principal office;
• Total amount of the capital;
• Total number and class of the outstanding shares and contents and number of each class of shares;
• Provision that the transfer of shares shall be subject to the approval of the board of directors, if so determined;
• Places of branch offices;
• Duration or reasons for dissolution of the company, if determined;
• Dividend of interest prior to the commencement of business, if determined
• Matters regarding convertible shares;
• Name and residence registration number of each director and auditor as well as name, residence registration number and
address of the representative director;
• Name, residence registration number and address of the director to represent the company;
• Provision that two or more representing directors shall jointly represent the company, if so determined;
• Provision about the redemption of shares out of profits to be distributed to the shareholder, if so determined;
• Trade name and principal office of a transfer agent, if any.

=> Documents to be submitted for the registration

• Certificate of FDI notification (copy)
• Power of attorney

– when the CEO is applying for registration: the CEO has to be the appointee for all
documents;
– when the judicial scrivener is applying for registration: the proxy is the appointee
(not the promoter or executive).

• Executive’s written consent to take a position in the company

– Korean national: residence registration ID and certified seal impression
registration after the seal;
– Foreign national: authentication of signature (original) and copy of passport;

• Custody certificate of paid-in capital
• Corporate registered seal
• Purchase of bonds
• Su preme Court Revenue Stamp
• Receipt of local registration tax payment: issued at the competent “gu” office
• Seal of each individual director and promoter (including foreign directors and promoters)
• Articles of incorporation (notarized)
• Certificate of underwriting
• Written subscription
• Report of the incorporation process
• Written agreement of curtailing the period of the inaugural general meeting
• Minutes of the inaugural general meeting (notarized)
• Minutes of the board of directors meeting (notarized)
• Notification of the seal and application form for the corporate seal card
• List of shareholders
• Written consent agreed upon the matters concerning the issuance of shares

=> Several types of taxes and fees as described below have to be paid in order to
establish a corporation in Korea:

1. Registration Tax: 0.4% of paid-in-capital (in large cities often three-fold this amount)
2. Education Tax: 20% of the registration tax
3. City Railroad Public Bond: 0.1% of paid-in capital
4. Application Fee: KRW 5,000
5. Notarization Fee: around KRW150, 000 (for articles of incorporation, etc.)

=> Thus, for establishing a foreign-invested corporation with the minimum capital
requirement of KRW50 million, the total expenses would amount to KRW 935,000,
excluding the fee for the notary public.

=> If notification of incorporation and business registration are made concurrently,
the application form for both can be obtained at the tax office.

1. Place of Notification / Registration:
Invest KOREA or competent tax office, which has jurisdiction over the corporation.
2. Notification / Registration Period:
For notification of incorporation — within two months from the date of incorporation
registration;
For business registration — within 20 days from the date of business commencement.
3. Required documents:

– Application form (provided)
– Articles of incorporation (including detailed list for investment in kind)
– Incorporation register book
– Initial balance sheet (can be prepared by Invest KOREA)
– List of shareholders and investors (with seal)
– Copy of FDI notification
– Certificate of foreign currency exchange (purchase and deposit)
– Copy of business permit (if required)
– Certificate of foreigner registration or passport (if the representative is not a domestic
resident), show original and submit a copy
– Copy of lease contract or proof of ownership for office space

3. – (e.g. building register book)

– Notification of designating a tax manager (if the representative is a foreign national
and there is no Korean employee to receive documents) — with a copy of the resident
register book or business register book of the tax manager.

=> If business registration is done prior to incorporation (investment in kind):

– Normally, application for notification of incorporation and business establishment is
done concurrently.
– In cases where a foreign national establishes a company by means of investment i
kind, the business registration should be filed before the registration of incorporation in
order to get deduction of the VAT when the capital goods are brought into Korea.
In this case, the required documents when applying for business registration are
as follows:

1. Resident register book of all promoters (instead of the incorporation register book);
2. Application for business permit (if required);
3. Business plan;
4. Other documents required for business establishment are to be submitted after

business establishment.

Different types of business:
1. Private company:
– All business is conducted in the name of the owner of the private business. That is, all business transactions are conducted in the name and responsibility of the owner, and holds also unlimited liability.
2. Corporation
– The company and individuals are completely different entities, and if the company representative conducts business activities under the company’s name, then all liability or security can take place only within the range of company assets. Individuals making up the company (CEO, director, shareholder etc.) do not hold liability.

Different process of establishment
1. Private company:
– No special process is necessary except FDI notification. Business activities can be conducted after business registration is filed at the competent tax office.
2. Corporation
– The process is more complicated and a separate incorporation procedure is necessary in addition to FDI notification. For the preparation and process of the required documents, 1-2 weeks of additional processing time might be necessary.

1. Foreign-invested company
A foreign-invested company is a company established in Korea through foreign investment. It is therefore a domestic company subject to the application of the FIPA and Commercial Act. According to the Commercial Act, a minimum capital investment of KRW 50mil. is required, and pursuant to FIPA, the minimum investment for each investor is KRW 50mil.
– The foreign-invested company and the foreign investor are separate entities and therefore the accounting and settlement of accounts are done individually.
2. Branch office
A branch office is to conduct business activities of a foreign company in Korea. The branch office has to be established according to the regulations stipulated in the Foreign Exchange Transactions Act and go through court registration. The same tax rate as for Korean companies is applied to profits that are made in Korea.
3. Liaison office
The main difference between a branch office and a liaison office is that a branch office can conduct profit-generating business activities whereas a liaison office can only engage in nonprofit-making activities. Accordingly, the liaison office does not require a court registration, but gets only an individual number from the competent tax office.