South Korea enjoys a good reputation among other countries worldwide when it comes to company formation. However, there are some basic precautions that must be taken into account when doing business in this country. For example, government transactions required to complete corporate documents are conducted in Korean. Because of this, there may be times when you need the help of a professional who speaks this language to settle business matters.

Doing business in South Korea
Another requirement is that if he or she is a South Korean shareholder, the joint venture partner should not be a nominee in order to comply with the foreign company incorporation rules. Due to Confucian ethics, Koreans respect senior members of every community, including the business community; Therefore, senior business partners are welcome to attend important business meetings when concluding contracts with Korean customers or suppliers.

When starting a business in South Korea, documents such as tax returns and audited financial statements should be submitted to the country's authorities. To effectively fulfill this annual legal obligation, you may need professional advice from a Korean business specialist.

Business structures available in South Korea
There is a Korean commercial law, the Commercial Code of Korea, which provides for three main types of business organizations: private companies, corporations, and offices. Corporations are usually divided into General Partnership (GP), Limited Liability Partnership (LLP), Joint Stock Corporation (JSC), and Limited Liability Corporation (LLC).

In general, there are several business structures in South Korea these days: local companies, private companies, branch offices, and liaison offices. There are two types of corporations when it comes to incorporating a local corporation (company): a joint stock company (company) or JSC and a limited liability company (company) or LLC. The number of LLC shareholders usually does not exceed 50 and there are no board requirements. JSC must have at least one Director who is elected and represents the Board of Directors.

Private business also includes investments of the same amount. Such businesses are often treated as a local entity as the owner takes any profits made while doing business and has unlimited liability. On the other hand, a branch is when there is a representative of a foreign company under a Korean branch that needs to be registered with the court.

Business forms
In a partnership, the members have unlimited liabilities, meaning that each member has the power to represent the company, who is obligated to repay the company's debts in the event that it fails to repay its debts. However, the transfer of ownership is limited. In a limited partnership, the members have unlimited liabilities and limited liabilities. Unrestricted Members have the authority to conduct the corporate affairs of the Company. Limited Liability Members participate in the Company only through capital contributions and have no executive powers.

Korean company formation requirements and restrictions
In case if a foreigner wants to register himself as a foreigner-invested business - JSC or LLC the investment amount not less than 100 million is needed. Shares in such companies not necessarily must be held by Korean resident shareholders. JSC and LLC have higher compliance and administrative requirements than other business structure referred to as Branch office. There must be minimum two partners who are not limited by nationality. There are restricted series of sectors for foreign investment existing.

Branch office usually is not recognized as direct foreign investment and is treated as a single legal entity with no limits regarding investment or ownership and no requirements regarding formal incorporation while having rights to engage in sales activity that is why they are best for small-scale operations with an opportunity to move to a local subsidiary later in case it will be needed. Branch office establishment procedure is simpler than as it is with the previous business structure described.

Liaison office usually undertakes non-sales function referred to as market research etc. while not carrying out business that generates profits in the country. It is a business activity which is usually conducted in the name of the parent company. It is quite simple to establish. Such business structure must have been registered at the tax department while being also granted a distinct number, stating business registration.