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How to set up a liaison office in Korea - What are the necessary documentations?

There is very limited authentic detailed information regarding on which basis, what kind of documents are required to prepare the set up of a liaison office in Korea.



Therefore, in this post, we would like to share an email provided to an (attorney of) client residing outside of Korea, seeking assistance in establishing a liaison office in Korea.


Dear Client,

 

Thank you for your email.

 

Regarding your inquiry of “a citation to the Korean regulations for setting up a liaison office”, please see below the link and the box in detail.

 

  • It is not stipulated in the Foreign Exchange Transaction Act itself, but in the Foreign Exchange Transactions Regulations, which is a decree of Ministry of Economy and Finance. (대한민국 영문법령 (klri.re.kr))


Foreign Exchange Transactions Regulations

 

Article 9-32 (Scope of Application and Classification)

 

(1)       The provisions of this section shall apply to cases where a non-resident intends to receive any funds as provided in Article 3 (1) 19 (e) and Article 15 of the Act in order to establish and operate a branch office and business office in the Republic of Korea (hereinafter in this section referred to as “domestic branch”); provided that the provisions of Chapter II shall apply to domestic branch offices and business offices of a foreign bank.

 

(2)       Domestic branches of a non-resident shall be classified as follows:

1.         “Branch office” engaging in business activities generating revenues in the Republic of Korea;

2.         “Business offices” performing non-business functions, such as liaison, market surveys, research and development activities, without engaging in any business activities generating revenues in the Republic of Korea.

 

Article 9-33 (Declaration of Establishment and Modification)  

 

(1)       Any non-resident who intends to establish a domestic branch shall declare it to the head of a designated foreign exchange bank.

(2)       Notwithstanding the provisions of paragraph (1), if a non-resident intends to establish a domestic branch the purpose of which is to engage in any of the following business affairs or any other business affairs related thereto, he or she shall declare it to the Minister of Economy and Finance:

1.         Financial business affairs, other than the banking business, including lending, arrangement and brokerage of overseas financing, card business and installment finance;

2.         Business affairs related with the securities and insurance business;

3.         Business affairs not permitted under other statutes including the Foreign Investment Promotion Act.

(3)       Any person who intends to declare as provided in paragraphs (1) and (2), shall submit to the Minister of Economy and Finance or the head of a designated foreign exchange bank declaration on establishment of a domestic branch of a foreign company using Form 9-8, with each of the following documents attached thereto:

1.         Documents evidencing the name, location and major business affairs of a foreign corporation that is the head office;

2.         A copy of related evidentiary documents if permission, etc. of such establishment is required under other statutes or regulations;

3.         Detailed statement on the details and scope of business affairs to be pursued in the Republic of Korea.

(4)       Where a person who has declared the establishment of a domestic branch, intends to modify any declared matter, he or she shall submit declaration on modification of a domestic branch of a foreign company in Form 9-9 to the party to whom he or she made the former declaration, with each of the following documents attached thereto:

1.         Documents evidencing such modification;

2.         Business plan (in cases of modification of such branch's business affairs).


With this being stated, the documents to be prepared are such to support those elaborated above. Which means, the detailed documents required are not written down even in the regulations, so the authorities have certain discretion in the determination process regarding the documents to be submitted.

 

Regarding the Form 9-8, below information are requested to be filled in.

 

: 1. Official Name of the HQ

   2. Establishment Date of the HQ

   3. Representative of the HQ

   4. Location of the HQ

   5. Business of the HQ

   6. Capital of the HQ

   7. Name of the Liaison Office

   8. Name of the Representative of the Liaison Office and her/his registration number

   9. Location of the Liaison Office

   10. Business of the Liaison Office

 

Further, the documents that are generally requested to support above, are as follows.

 

1.                Documents evidencing the name, location and major business affairs of a foreign corporation that is the head office;

 : Such as foreign company (HQ)’s registration certificate (<-which requires translation notarization and an apostille) / HQ’s articles of incorporation / Document to support the capital of the HQ / Copy of the passport of the HQ representative

 

2.                Detailed statement on the details and scope of business affairs to be pursued in the Republic of Korea

: Such as the board of director’s meeting minutes regarding the establishment of the liaison office in Korea (including the address of the liaison office, the decision to establish the liaison office, and the name and address of the liaison office), (documents to prove that the representative of the liaison office was designated) <- Which requires translation notarization and an apostille), business plan that is the be pursued by the liaison office, copy of the passport or i.d. of the representative of the liaison office, the document of the acceptance of the representative director, lease agreement of the liaison office,

 

*Since we need to submit above documents to both the official bank as well as to the tax authority, two copies of the apostilled documents are needed, including the POA.

 

Should you have further questions, do not hesitate to contact us at any time.

 

Thank you.

 

Best regards,

InterLEX

 

 

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