Includes steps involved in establishing a local office.
Last Published: 8/29/2019

The dynamism and maturity of the Korean market, coupled with its strategic location in East Asia, may lead U.S. companies to consider opening an office in Korea.  The following options exist:

  • Subsidiary Office:  Established as a local company, a subsidiary has a closer relationship with the local business community and can provide the local firm the opportunity for Korean government investment incentives, as it would be eligible to receive corporate income tax incentives (Special Tax Treatment Law STTCL), if it meets certain requirements.  These tax incentives are not available to branch or liaison offices.
  • Branch Office:  Not subject to audits by external auditors in Korea, a branch office’s net income is automatically viewed as being included in the headquarters balance sheet.  A company expecting to grow large enough to require the establishment of a subsidiary in the future should consider doing so from the beginning, rather than starting as a branch operation.
  • Liaison Office:  A liaison office can only conduct marketing and support and cannot conduct direct sales. A liaison office is subject only to the tax code of the headquarters country and is the simplest form of conducting business in Korea.
A basic checklist for setting-up an office in Korea includes:
  • Review Invest KOREA:  Consult the one-stop services offered by Invest KOREA (Consult: http://www.investkorea.org) a government-sponsored, non-profit organization of the Korea Trade-Investment Promotion Agency (KOTRA; https://www.kotra.or.kr/foreign/main/KHEMUI010M.html?LOCALE=en).
  • KOTRA maintains offices throughout the United States and is poised to guide U.S. companies through the administrative, legal, and tax implications of opening an office in Korea.  Consult:
    https://www.kotra.or.kr/foreign/main/KHEMUI010M.html?LOCALE=en
  • Authorization:  Once ‘authorization to proceed’ with an investment is granted, companies must notify the Ministry of Trade, Industry and Energy (MOTIE), a delegated authority (major Korean bank), or Invest Korea.  Consult: http://www.investkorea.org.
  • Your Office in Korea:  Consult a reputable real estate agent or real estate consulting firm when deciding on the best location for your office.  A partial list is available at: https://2016.export.gov/southkorea/usefullinks/majorrealestateaccountinghrfirmsinkorea/index.asp
  • Under Korea’s Foreign Land Acquisition Law, foreigners can purchase land regardless of size or purpose.  Local zoning laws regulate categories of activity allowed and should be reviewed prior to making final investment decisions.  It is highly recommended that anyone desiring to purchase land consult with a reputable Korean or U.S. law firm.
  • Register with the Tax Office:  Investors must register their office/investment with the local tax office.  Given language issues, the complexity of Korean tax laws, and the potential for misunderstanding, companies should hire a local accounting firm to file taxes.  Consult: https://2016.export.gov/southkorea/usefullinks/majorrealestateaccountinghrfirmsinkorea/index.asp
  • Seek Qualified Employees:  Koreans are attracted to U.S. firms based upon issues such as salary rates, work environment, prestige, opportunities for travel, the ability to use and learn English, and the possibility to transfer to the company’s home office or another foreign branch office.

Korea has a large pool of conscientious and highly-educated workers.  Female employees are especially strong candidates, given their educational achievements, language abilities, and the prevalence of traditional Korean cultural attitudes toward female employees (which have historically prevented women from progressing as quickly as they would in a U.S. company).

Due to differences in U.S. and Korean employment practices, CS Korea recommends consulting with Korean employment agencies before hiring.
Contact the Seoul Global Center website for information on the Seoul Metropolitan Government’s program which occasionally offers free or reduced rent/office space for foreign residents (http://global.seoul.go.kr/).

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.