Establishing a Branch Office in Korea

 

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Administrative Attroney Kyoungrock, Lee ,

an expert dedicated to supporting global businesses entering the Korean market.

010-4592-8605

 

 

 

[Establishing a Foreign Corporation Branch in Korea]

Step 1. The First Gate: Foreign Exchange Bank Reporting Procedures and Required Documents

The first and most crucial step for a foreign company to establish a branch office and commence business activities in Korea is the Foreign Exchange Bank Report for Establishing a Domestic Branch Office.

This procedure is mandatory under the Foreign Exchange Transactions Act and serves as an administrative process to manage the impact of branch establishment on domestic capital transactions. Only after this report is accepted can the company proceed to the subsequent steps of court registration and tax office business registration.

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1️⃣ What is the Foreign Exchange Bank Report and Why is it Necessary?

 

The "Report on Establishment of Domestic Branch Office of a Foreign Corporation" is the process of certifying that the establishment of the foreign company's domestic branch adheres to the procedures stipulated in the Foreign Exchange Transaction Regulations.

 

- Reporting Institution: The report must be submitted to one of the major commercial banks handling foreign exchange business. This designated bank will subsequently manage the branch's primary foreign exchange transactions.

- Jurisdiction: Although the report falls under the duty of the Minister of Economy and Finance, the authority to approve the report has been delegated to the head of the Foreign Exchange Bank for efficiency.

 

- Reporting Target: This is mandatory for the establishment of a branch office (for-profit) intending to conduct profitable business activities in Korea. For a liaison office engaged only in non-profit activities such as business communication or market research, the reporting institution and procedure differ.

 

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2️⃣ 📋 Essential Documents Required for Foreign Exchange Bank Reporting

The stage that typically takes the most time and is most critical involves preparing and certifying documents originating from the head office overseas.

 

 

Document Category	Document Name	Content and Requirements
Application	① Application for Report of Domestic Branch Establishment of a Foreign Corporation	Must be completed according to the form prescribed by the Foreign Exchange Transaction Regulations (provided by the bank).
Head Office Info	② Certificate of Corporate Registration of the Head Office	Document certifying the existence of the head office, confirmed by a governmental authority or a notary in its home country (e.g., Certificate of Incorporation, Corporate Registry Abstract).
	③ Copy of the Head Office's Articles of Incorporation	A copy of the head office's Articles of Incorporation or equivalent regulations.
Certification of Decision	④ Power of Attorney (POA) for Branch Establishment	A statement where the Head Office representative delegates the authority for the establishment and related tasks (reporting, registration, etc.) of the Korean branch to the Korean branch representative or agent (Certified Administrative Agent/ Attorney). (Notarization is mandatory)
	⑤ Resolution of the Board of Directors or Shareholders' Meeting	The head office's official resolution document, which includes the decision to establish the domestic branch and appoint the Korean branch representative. (Notarization is mandatory)
Business Plan	⑥ Business Plan	Must specify the concrete business activities to be conducted in Korea, the scope of activities, and a summary of the financial plan.
Others	⑦ Letter of Appointment and Passport Copy of the Korean Representative	Document certifying the appointment of the Korean branch representative and a copy of the representative's identification.

 

📌 The Most Important Point: Notarization and Certification

All documents issued by the head office overseas (POA, resolutions, registration certificates, etc.) must first undergo Notarization in the respective country. To have legal effect in Korea, they must then proceed through one of the following procedures:

If the country is an Apostille Convention member: Apostille certification from that country.

If the country is NOT an Apostille Convention member: Consular legalization/confirmation from the Korean Consulate in that country.

 

 

 

3️⃣ Foreign Exchange Bank Reporting Procedure Flow (3 Steps)

 

The bank reporting typically proceeds in the following order:

 

1. Designate Bank and Prepare Documents: Select one bank designated for foreign exchange operations and prepare all necessary documents, including those from the head office, along with translation and certification (notarization/Apostille).

 

2. Submission and Review: Submit the prepared documents to the designated bank. The bank will review the documents for compliance with relevant laws and completeness. Requests for supplementary documents may occur during this stage.

 

3. Report Acceptance and Issuance of Certificate: Once the document review is complete, the "Certificate of Acceptance of Report of Domestic Branch Establishment of a Foreign Corporation" will be issued in the name of the bank manager. The issuance of this certificate grants the legal authority to proceed to the next step: court registration.

 

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💡 The Role and Expertise of the Certified Administrative Agent/ Attorney

 

The success of the Foreign Exchange Bank reporting stage depends less on the complexity of the procedure itself and more on the accuracy of the overseas documents, the method of notarization/certification, and seamless communication with the bank.

- Document Suitability Review: Pre-reviewing the head office documents to ensure they meet the legal requirements demanded by domestic banks, thereby minimizing the risk of rejection.

- Business Representation: Submitting the report to the bank on behalf of the head office based on the Power of Attorney, and promptly handling inquiries and requests for supplementation from the bank.

 

Don't let the complex and challenging process of establishing a foreign corporation's domestic branch slow you down. Start accurately and swiftly from the very first step with a specialized Certified Administrative Agent!

Our Dongtan Hwaseong Certified Administrative Agent/Consulting office handles the entire process related to foreign investment, from foreign-invested enterprise registration and establishment to foreign investor visas and resident (D-7) visas.

 

We have an Administrative Agent who is a former Korea Exchange Bank Branch Manager with extensive experience in foreign investment affairs, and another Administrative Agent who is a former Public Institution Management Director, ensuring smooth progress for all matters concerning foreign-invested enterprises. We also have an Administrative Agent fluent in Chinese, enabling consultation in Chinese.

If you have any questions regarding foreign-invested enterprises, foreign investor visas, or resident visas, please consult with our Dongtan Hwaseong Certified Administrative Agent/Consulting office anytime.

Administrative Attroney Kyoungrock, Lee 010-4592-8605

                                              Mansung, Han    010-7295-0582