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Procedures for Establishing a Branch in Korea
Procedures for Establishing a Branch in Korea
Judicial Agent Sungsoo Kim’s Office, Address: 37, 302 seochodaero52Gil, Secho, Seoul, South Korea, Tel: 822 584 1122, Fax: 822 6455 1155 Email: iwoo8517@naver.com, iwoo8517@naver.com, Website: www.bubmoo.com
1. Flow (1) Notifying to Foreign Exchange Banks (2) Approval from Ministry of Finance and Economy (3) Taking relevant administrative procedures on to the individual laws (4) Applying for Court Registration (5) Applying for Tax Identification Number
2. Types of Branches A domestic branch of a foreign company falls into two types: (1) a regular “branch” conducting profit-generating activities in Korea, and (2) a “liaison office”, which does not carry on profit-generating activities but merely undertakes non-profit-making functions such as liaison of business affairs, market research, and research and development. 3. Notification of Branch Establishment A notification of branch establishment shall be filed to a foreign exchange Bank. In the following cases, however, the notification should be made to the Ministry of Finance and Economy: (1) Finance-related business activities other than banking business activities (i.e. lending of funds, arrangement or intermediate of foreign finance, credit card business, installment financing, etc.) (2) Securities- and insurance-related business activities (3) Business activities which are not permitted pursuant to laws and regulations of Korea, including the Foreign Investment Promotion Act (4) Business activities which are regarded to harm public morals and order
4. Required Documents: (1) Notification form for branch establishment (provided); (2) Articles of incorporation (shall be notarized in the country where the head office is located); - For a corporation: Articles of incorporation - For a private business: Financial statement
(3) Documents attesting the appointment of branch representative; (4) Business plan; (5) Power-of-attorney, if a proxy takes care of the procedures; (6) Certificate of company registration or business approval certificate (if a copy is submitted, it shall be notarized in the country where the head office is located) (7) Other documents requested by the Ministry of Finance and Economy (if deemed necessary)
5. Registration of Branch Establishment A "liaison office" is not subject to the registration since it cannot engage in profit-making business activities; however, a regular "branch" needs to file the registration in order to operate profit-generating business activities in Korea. (1) Place Commercial Registry Office at the competent district court (2) Registration Period Within 2 weeks from the date on which the branch was established (3) Matters to be registered A foreign company shall effect the same registration as that of a branch office of a company incorporated in Korea either of the same kind or of the kind which it most closely resembles A foreign company shall register the governing law under which it was incorporated; and the name and address of its representative in Korea. (4) Matters to be stated in the form Trade name (It must be written in Korean and indicate the type of incorporation, i.e. Partnership company, Limited partnership company, Limited liability company, Corporation); Address of overseas head office; Address of branch in Korea; Purpose of registration; Reasons for registration; (5) Matters to be registered Date on which necessary approval or permission were acquired; Tax receipt; Date of registration; Trade name/address of overseas head office; and name/address of a branch representative in Korea (When applying through a proxy, proxy's name and address should be entered); (6) Required Documents
6. Closure of Branch If a domestic branch is closed, a notification of closure needs to be filed. And if overseas remittance of the proceeds from the disposition of domestic assets is to be made, a certificate of full tax payment issued by the competent district tax office must be submitted to the designated foreign exchange bank. (1) Procedure to closure of branch Abolition of the Board of Directors decided Headquarters Office Liquidation proceedings and newspaper announcements Applying for Office abolition to the Court Registration Report of Office abolition to the from Ministry of Finance and Economy Transfer of remaining assets through designated bank (2) Required Documents: Application form (provided); Documents explaining reasons for closing the branch; Documents reporting liquidation matters certified by a CPA (Including a balance sheet and an income statement); Certificate of tax payment (for national and local tax); Statement of capital introduction, retained earnings and other reserves; Bank balance statement (the amount of the bank balance shall be the same as the amount to be remitted on the liquidation report); Transcript of final statement of liquidation (for a branch carrying on profit-making business activities); If such transcript is not available: Notification of business close-down (issued at the competent tax office) Document stating a liquidator Document verifying a final public notice regarding the bond (a copy of newspaper announcement) Documents verifying that employees' wages have been fully paid (issued at 46 local labor offices nationwide) Notification of business close-down
Judicial Agent Sungsoo Kim’s Office, Address: 37, 302 seochodaero52Gil, Secho, Seoul, South Korea, Tel: 822 584 1122, Fax: 822 6455 1155 Email: iwoo8517@naver.com, iwoo8517@naver.com, Website: www.bubmoo.com
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