Q. Can a foreign company and a domestic (Korean) company merge?

Under the Commercial Codes of Korea, a foreign company and a domestic company cannot merge.

Q. Can a foreign company and a domestic company invest together and establish a FDI corporation (joint venture)?

Yes, they can. However a foreign company’s investment ratio should be above 10 % to be registered as FDI Corporation.

Q. Can I establish a FDI corporation by investment in kind?

Yes, you can.

Q. Can a 3^rd party wire investment money, on behalf of the investor?

Yes he/she can, however, the remitting bank has to send a telegraphic message that verifies the real investor.

Q. Company X, the investor, was supposed to wire 50million Won for investment, however, due to the exchange rate, it became 55million Won after exchanging. What should I do if I have the difference?

There are 3 ways to solve the problem,

1) Send the difference back to the investor, or

2) Modify the investment notification, and change the capital amount of the Corporation to be established, or

3) Keep the balance as a gift (miscellaneous income in accounting)

Q. Is there any way that I can form a company (a legal entity/a branch/liaison office) in Korea without renting an office?

Office is a must to set up a legal entity, a branch, or liaison office.

Q. What is the difference between a branch and a liaison office?

While a branch undertakes sales activities in Korea for profit, liaison office does not conduct any sales activities to create profits, but instead carries out a non-sales function such as business contacts, market research, R&D etc. Liaison offices can carry out quality management, market surveys, advertisements, and other incidental and supportive roles. However, they are limited in their scope of activities since they are not allowed to sell directly, or hold shares to sell on their headquarters' behalf.

Q. Does the representative of a branch or liaison office in Korea have to be Korean? If not, can the same Representative Director of the head office also be the Representative of the Korean branch (or Liaison office)?

No, it doesn’t have to be Korean; a foreign national can also be Representative of a branch liaison office. However, Rep. of a branch or liaison Office cannot be the same person as the Representative of the Head Office. In other words, Representative Director of the Head office cannot be the branch rep. or liaison office rep.

Q. What if the country that I am residing in or the country that I am from is not a signatory of Apostille (The Hague Convention)? What should I do?

If so, you should get document acknowledgment or confirmation from the Korean Embassy in that country.

Q. Is it mandatory to hire employees in Korea?

No, it is not.

Q. What is the minimum number of executives for a legal entity or a branch or liaison office in Korea?

In every case, the minimum number of executives is one, and he/she will be the representative of a legal entity/ a branch/ a liaison office.

Q. I am a foreign passport holder and would like to incorporate a company with Korean Won that I have. Can it be registered as FDI Corporation since I am a foreigner?

No, it can’t be. The principle of FDI is the investment of non-residents, and those include foreign passport holders and Korean citizens residing overseas. The investment should be made by a non-resident in foreign currency only, so the investment in Korean won cannot be considered as FDI, even though you are a foreigner.

Q. Can a branch or liaison office of a foreign enterprise be a shareholder of FDI Corporation?

No. A branch or liaison office cannot be a shareholder of a corporation. The investment can be made by the head quarter only.

Q. What procedure should I follow if I already have brought money into Korea in person?

At the time of carrying in money, you should report to Customs and receive Declaration of Currency or Monetary Instruments. Then, you can simply notify a foreign exchange bank with cash that you brought. However, if you haven’t reported the carrying-in to Customs, it is almost impossible to be considered as Foreign Direct Investment.

Q. What are the advantages and disadvantages of FDI Corporation?

FDI Corporation has some incentives such as Tax Support, Cash Grant, Site Location Support, and so on. However, not every FDI Corporation is eligible for these advantages; the qualification and application for those incentives are very strict.

Disadvantages of FDI Corporation may be the limitation on the investment categories under the Foreign Investment Promotion Act. Foreign Direct Investment cannot be made into government-related administration, foreign affairs, and safety.    

Q. Does the investment have to be made in USD only?

No, it doesn’t have to. EUR, AUD, HKD, JPY, CAD are also acceptable, but please check with us before you wire the money, as there are some exceptions. 

Q. Is it true that I can obtain D-8 Visa if I have Certificate of FDI Corporation?

Q. Can two individuals or two legal entities invest a total amount of 50million Won (KRW) together and register as FDI Corporation?

No. To be registered as FDI Corporation, minimum investment amount of a single investor should be more than 50million Won (KRW) and its ratio should be above 10% of the total invested capital.

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What is Apostille?

Apostille is a French word which means a certification and commonly refers to the legalization of a document for international use. Documents which have been notarized by a notary public, and certain other documents, and then certified with a conformant apostille are accepted for legal use in all the nations that have signed the Hague Convention.

 An Apostille issued by the State of Alabama.

What if my country is not a signatory of Apostille?

In countries which are not signatories to the 1961 convention and do not recognize the apostille, a foreign public document must be legalized by a consular officer in the country which issued the document.

e.g. Documents from Singapore, a country that has not signed the Hague Convention, should be acknowledged by the Korean Embassy in Singapore.

What is this for?

When setting up a branch or a liaison office in Korea, the Korean court needs to verify the documents (Head Office that are issued overseas. For that reason, only apostilled documents are acceptable.