How Can a Foreign Company Set Up a Branch Office in Korea?

Short Answer

A foreign company can set up a branch office in Korea by preparing parent company documents, appointing a branch representative, completing required notarization or apostille procedures where applicable, and completing the relevant registration steps, including court registry registration and tax/business registration.

A Korean branch is generally not a separate Korean legal entity. It operates as an extension of the foreign parent company in Korea. This is different from a Korean subsidiary, which is a separate Korean corporation.

Before entering Korea, foreign companies should compare whether a branch office, liaison office, or Korean subsidiary is more suitable. If the company intends to make a foreign direct investment and register a foreign-invested company, a Korean subsidiary is often the structure that needs to be considered.

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Why This Matters for Korea Market Entry

Foreign companies entering Korea often consider several different structures.

In a previous article, we discussed key legal checks for forming a joint venture or foreign-invested company in Korea. As a practical first step into the Korean market, some foreign companies may consider setting up a branch office or liaison office instead of incorporating a Korean subsidiary.

The correct structure depends on the company’s business model, revenue activities, tax and accounting position, liability concerns, licensing requirements, banking needs, and long-term plans in Korea.

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What Is a Branch Office in Korea?

A branch office in Korea is a registered business presence of a foreign company.

Unlike a Korean subsidiary, a branch office is not a separate company incorporated under Korean law. The foreign parent company remains the legal entity conducting business through the Korean branch.

This means that the branch may generally conduct revenue-generating business activities in Korea, but the foreign parent company may remain directly responsible for the branch’s obligations.

A branch office may be suitable where the foreign company wants to conduct business in Korea directly under the parent company’s name without establishing a separate Korean corporation.

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Branch Office vs. Subsidiary: What Is the Difference?

The main difference is legal identity.

A Korean subsidiary is a separate Korean legal entity. It has its own corporate registration, shareholders, directors, capital, and legal responsibility.

A Korean branch office, by contrast, is an extension of the foreign parent company. The branch is registered in Korea, but it is not legally separate from the overseas company.

In practice, this difference affects:

• legal liability;
• tax and accounting treatment;
• management structure;
• banking and contracts;
• employment arrangements;
• immigration and visa planning; and
• long-term business expansion.

For foreign companies expecting larger operations, local investment, Korean partners, or a separate Korean liability structure, a subsidiary may sometimes be more suitable. For companies that want a direct Korean operating presence without forming a separate entity, a branch may be considered.

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Is a Branch Office the Same as a Foreign-Invested Company?

Generally, no.

A branch office is typically not a Korean legal entity and is generally not the structure used for foreign-invested company registration.

Foreign investment filings and foreign-invested company registration are usually more relevant where a foreign investor establishes or invests in a Korean subsidiary or Korean corporation.

This distinction is important because foreign companies sometimes use “Korea office,” “branch,” “subsidiary,” and “foreign-invested company” loosely. However, each structure has different legal, tax, registration, and operational consequences.

If a foreign company wants to establish a Korean corporation, inject investment capital, register as a foreign-invested company, and potentially support investment-based business planning, a subsidiary structure should be reviewed together with the branch option.

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Branch Office vs. Liaison Office: What Is the Difference?

A branch office and a liaison office are also different.

A branch office may generally conduct business activities and generate revenue in Korea.

A liaison office, on the other hand, is generally limited to non-revenue activities, such as market research, communication, advertising support, and business coordination for the foreign head office.

A liaison office is usually not appropriate if the foreign company intends to directly conduct sales, issue invoices, receive revenue, or provide paid services in Korea.

However, the scope should always be confirmed based on the actual activities. If the Korea office will engage in activities close to sales, contracting, service delivery, or revenue generation, the company should carefully review whether a liaison office is sufficient.

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What Are the Main Steps to Set Up a Branch Office in Korea?

The exact process may vary depending on the company, documents, and business sector, but the general process usually involves:

• preparing the foreign parent company’s corporate documents;
• appointing a Korean branch representative;
• preparing a power of attorney and related documents;
• completing notarization, apostille, or consular legalization where required;
• filing any required branch establishment report;
• completing court registry registration for the Korean branch;
• completing tax and business registration;
• opening a Korean bank account; and
• preparing basic post-registration documents for operation.

The process can take longer if overseas documents need notarization, apostille, translation, or additional review by banks or authorities.

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What Documents Are Usually Needed?

The required documents may vary, but foreign companies commonly need to prepare documents proving their legal existence and authority.

Typical documents may include:

• certificate of incorporation or corporate registry extract;
• articles of incorporation or equivalent constitutional document;
• board resolution approving the Korean branch;
• appointment document for the Korean branch representative;
• power of attorney;
• passport or ID documents of relevant representatives;
• registered office address information;
• Korean branch office address;
• business purpose description; and
• notarized, apostilled, legalized, or translated documents where required.

Because document requirements differ by jurisdiction, the foreign company should confirm the exact format before preparing overseas documents.

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Does a Korean Branch Need a Local Representative?

Yes. A Korean branch usually needs a branch representative who is registered for the Korean branch.

The representative does not necessarily need to be a Korean citizen. However, practical issues may arise if the representative is overseas, does not have Korean identification, or cannot sign, verify, or communicate regarding documents easily.

The branch representative may be involved in the Korean branch’s local filings, tax matters, bank communications, and business operations.

For this reason, foreign companies should carefully choose the branch representative and clearly define the representative’s authority internally.

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Can a Branch Office Hire Employees in Korea?

Yes. A Korean branch office may generally hire employees in Korea.

However, if the branch hires employees, it should comply with Korean employment laws, payroll obligations, social insurance requirements, tax withholding obligations, and workplace compliance rules.

Foreign companies should not assume that employment practices from the home country can be used in Korea without adjustment.

Employment contracts, workplace policies, wage payment, termination, severance pay, and social insurance matters should be reviewed under Korean law.

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Can a Branch Office Open a Bank Account in Korea?

Yes, but bank account opening can be a practical challenge.

Banks in Korea may require detailed documents regarding the foreign parent company, Korean branch registration, business purpose, beneficial ownership, representative authority, and source of funds.

Even after the legal registration is completed, banks may request additional documents or internal compliance review.

For this reason, foreign companies should prepare corporate documents carefully and expect bank compliance questions during the process.

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What Are the Tax and Accounting Considerations?

A Korean branch office may have Korean tax and accounting obligations if it conducts business in Korea.

The tax treatment of a branch may differ from that of a Korean subsidiary. A branch may be taxed in Korea on income attributable to the Korean branch, and additional issues may arise under tax treaties, transfer pricing principles, and home-country tax rules.

Because tax treatment can depend on the company’s business model and transaction structure, foreign companies should obtain separate tax and accounting advice before finalizing the structure.

Legal counsel can assist with the corporate and registration process, but tax planning should usually be reviewed by tax professionals.

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When Is a Branch Office a Good Option?

A branch office may be suitable where the foreign company wants to conduct business in Korea directly under the foreign parent company.

It may be considered where:

• the foreign company wants a Korean operating presence;
• the business will be conducted under the parent company’s name;
• the company does not need a separate Korean shareholder structure;
• the Korean operation is closely integrated with the head office;
• the company wants to avoid incorporating a separate Korean subsidiary; or
• the business model is suitable for branch-based operation.

However, a branch may not be ideal where the foreign company wants limited liability through a separate Korean entity, Korean investment partners, separate corporate governance, local equity investment, or a structure better suited for foreign-invested company registration or long-term expansion.

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When Should a Foreign Company Consider a Subsidiary Instead?

A Korean subsidiary may be more appropriate where the foreign company wants a separate Korean legal entity.

This may be useful where the company plans to:

• hire employees and operate locally on a long-term basis;
• enter into contracts under a Korean company name;
• bring in local or foreign investors;
• separate Korean business liabilities from the parent company;
• apply for foreign-invested company registration;
• structure a joint venture with a Korean partner; or
• pursue an investment-based business structure.

In many cases, the decision between a branch and subsidiary should be made before documents are prepared, because the registration process and legal consequences are different.

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What Should Foreign Companies Check Before Setting Up a Branch?

Before setting up a Korean branch office, foreign companies should review:

• whether a branch is the right structure;
• whether a subsidiary or liaison office would be more appropriate;
• whether the business requires a license or permit;
• whether the proposed activities can be conducted through a branch;
• who will act as branch representative;
• what documents must be prepared overseas;
• whether apostille or legalization is required;
• whether a Korean office address is available;
• tax and accounting implications;
• bank account opening requirements; and
• future plans for hiring, contracts, and expansion.

If the business is regulated, the company should separately confirm whether the proposed activities can be conducted through a branch and whether any industry-specific licenses, permits, or filings are required before commencing operations.

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What Is a Practical Order of Work?

Foreign companies should not treat branch registration as only a paperwork matter.

A practical order of work may be:

• confirm the Korean business model;
• compare branch, subsidiary, and liaison office options;
• check licensing or regulatory issues;
• appoint the branch representative;
• prepare parent company documents;
• complete notarization, apostille, or legalization where required;
• proceed with court registry registration;
• complete tax and business registration;
• open a Korean bank account; and
• prepare employment, tax, accounting, and operational documents as needed.

In practice, the most common issues often arise not from the branch registration itself, but from banking, tax/accounting setup, employment compliance, and sector-specific licensing requirements.

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Practical Considerations for Foreign Companies

Foreign companies should consider the branch structure in light of their broader Korea strategy.

If the company only needs market research or communication support, a liaison office may be sufficient. If the company wants to conduct revenue-generating business directly through the foreign parent, a branch office may be considered. If the company wants a separate Korean legal entity, local investment structure, JV structure, or foreign-invested company registration, a Korean subsidiary may be more appropriate.

The best structure depends on the company’s business model, expected revenue, liability concerns, tax position, banking needs, hiring plans, regulatory requirements, and long-term expansion strategy.

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Conclusion

A foreign company can set up a branch office in Korea by registering a Korean branch of the foreign parent company and completing related tax and business registration procedures.

However, a branch office is not the same as a Korean subsidiary, liaison office, or foreign-invested company. Each structure has different legal, tax, banking, liability, and operational consequences.

For foreign companies entering Korea, the safest approach is to compare the available structures first, confirm whether any licenses or regulatory requirements apply, and then prepare the registration documents based on the confirmed business plan.

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