How to Start an E-Commerce Business in Korea as a Foreigner (2026 Guide)

South Korea is one of the world’s most digitally advanced consumer markets. With e-commerce penetration above 70%, a smartphone-first shopping culture, and platforms like Coupang, Naver Shopping, and Kakao Commerce driving billions in transactions, Korea is a prime destination for foreign entrepreneurs looking to tap into Asian digital commerce.

But setting up an e-commerce business in Korea as a foreigner involves more than just launching a website. You’ll need to navigate company registration, online business licensing, Korean payment gateways, marketplace onboarding, VAT compliance, and data privacy rules. This guide covers everything you need to know in 2026.

Table of Contents

Korea E-Commerce Market Overview

Understanding the landscape is essential before entering Korea’s e-commerce market:

Key insight: Korean consumers are demanding and price-sensitive. Competing purely on price is difficult. Foreign brands succeed by offering authentic products (especially from the US, Europe, Japan, or niche origin stories) or unique value propositions unavailable from domestic competitors.

Business Structure Options for Foreign E-Commerce Operators

Before registering your business, decide on your operating structure:

Option 1: Korean LLC (유한회사) or Corporation (주식회사)

Best for: Full market participation — own website, marketplace seller account, direct employment

• Most flexible structure
• Required to open a Korean corporate bank account and obtain payment gateway access
• Eligible for FDI incentives if minimum KRW 100 million (~USD 73,000) invested
• LLC is simpler for small teams; Corporation required for public fundraising or VC investment

Option 2: Branch Office (지점)

Best for: Foreign companies testing the market before full commitment

• Not a separate legal entity — parent company bears all liabilities
• Can conduct business, but certain marketplace platforms may require a fully registered Korean entity
• Corporate bank account possible but can be harder to open than for an LLC

Option 3: Marketplace-Only (Cross-Border Selling)

Best for: Selling to Korean consumers without establishing a Korean legal entity

• Some platforms (Coupang Global, Naver International) allow foreign sellers to list without a Korean entity
• Limited to certain product categories
• VAT obligations still apply if sales exceed KRW 50 million per year
• No access to Korean payment gateways — payments handled by platform

Recommendation for most foreign entrepreneurs: Establish a Korean LLC. It is the cleanest path to full market access and takes approximately 3–4 weeks to complete with professional assistance.

Step 1: Register Your Korean Company

To establish a Korean LLC or Corporation:

Required Documents (Foreign Individual Shareholder)

• Passport (apostilled copy)
• Certificate of address or bank reference
• Specimen signature
• Director appointment acceptance letter

Required Documents (Foreign Corporate Shareholder)

• Corporate registration certificate (apostilled)
• Board resolution authorizing Korean investment
• Authorized signatory proof

Process Overview

Total: Approximately 3–5 weeks

Step 2: Online Business Registration

Any company selling goods or services online in Korea must file an online business report (통신판매업 신고) with the local district office (구청) where the business is registered.

Requirements

• Business registration certificate (사업자등록증)
• Domain name and website URL
• Escrow service agreement or consumer protection insurance certificate (see Step 3)

Filing

Filed online through Minwon24 (민원24) or directly at the district office. Processing takes 2–3 business days. A business registration number specific to online commerce is issued.

This registration number is required to list products on Korean marketplaces (Coupang, Naver Shopping, etc.) and to display on your website per Korean consumer protection law.

Step 3: Escrow or Consumer Protection Insurance

Korea’s Act on Consumer Protection in Electronic Commerce requires online sellers to:

• Protect consumer payment funds from the moment of order to delivery, using one of:
  • An escrow service (결제대금예치), where payment is held by a licensed escrow provider until delivery is confirmed
  • Consumer payment protection insurance (소비자피해보상보험) — an insurance policy that covers consumer losses if the seller fails to deliver

Most small and medium e-commerce businesses use consumer payment protection insurance, which costs approximately KRW 100,000–500,000 per year depending on projected sales volume.

This certificate must be displayed on your website and submitted with your online business registration.

Step 4: Korean Payment Gateway (PG)

Korean consumers pay through a distinctly local ecosystem. Credit cards, mobile payments (KakaoPay, NaverPay, Toss), and bank transfer (계좌이체) dominate — international payment processors like Stripe or PayPal are not widely used for domestic Korean commerce.

To accept Korean payment methods, you need to integrate with a Korean Payment Gateway (PG):

Major Korean PG Providers

Requirements for PG Account

• Korean business registration certificate
• Online business registration number
• Corporate bank account
• Website review by PG provider

Timeline: PG setup takes 1–3 weeks after corporate bank account is opened.

Step 5: Marketplace Onboarding

For maximum reach, most foreign e-commerce operators sell through Korean marketplaces in addition to (or instead of) running an independent website.

Coupang Marketplace (쿠팡)

Korea’s largest e-commerce platform (~45% market share):

• Domestic seller account: Requires Korean business registration and bank account
• Global seller program: Available for foreign sellers without a Korean entity (limited categories)
• Key advantage: Rocket Delivery fulfillment service — send inventory to Coupang warehouses, they handle last-mile delivery
• Commission: 10–15% depending on category

Naver Shopping (네이버 쇼핑)

Korea’s second-largest online commerce channel, powered by Naver’s search dominance:

• Requires Korean business registration
• Sellers operate independent “Smart Stores” (스마트스토어) linked to Naver Shopping search
• Commission: 2–5.85% depending on category
• Key advantage: SEO synergy with Naver search (dominant search engine in Korea)
• NaverPay integration essential

11st (SK Telecom) and Gmarket (G마켓)

• Established platforms with large user bases
• Good for electronics, everyday goods
• Similar registration requirements to Coupang

Kakao Commerce

• Best for lifestyle, beauty, food categories
• Strong integration with KakaoTalk (Korea’s dominant messaging app)
• Kakao Gift feature drives viral commerce

Tax Obligations: VAT and Corporate Tax

VAT (부가가치세)

• Standard rate: 10%
• VAT registration required at business formation
• Filing frequency:
  • General taxpayers (annual revenue ≥ KRW 48 million): Biannual declarations (January and July)
  • Simplified taxpayers (< KRW 48 million): Annual declaration

Cross-border e-commerce note: Foreign companies selling digital goods or services to Korean consumers online are subject to Korean VAT even without a Korean entity — a system similar to the EU’s VAT OSS. Registration through the simplified VAT registration system for foreign businesses (간편사업자 등록) is required.

Corporate Tax

Korean corporate tax rates:

Annual corporate tax returns are due within 3 months of fiscal year end.

Data Privacy: PIPA and E-Commerce

E-commerce businesses collect substantial personal data (names, addresses, phone numbers, purchase history, browsing behavior). Korea’s Personal Information Protection Act (PIPA) imposes strict requirements:

Key E-Commerce PIPA Requirements

• Privacy notice in Korean on your website, detailing data collected and purposes
• Separate consent for marketing communications (cannot be bundled with purchase consent)
• Third-party disclosure consent if sharing customer data with fulfillment partners or marketing platforms
• Data retention limits — customer data must be deleted after the retention period specified in your privacy notice
• Breach notification within 72 hours for large-scale incidents (1,000+ affected individuals)

Platform note: If you sell through Naver or Coupang, some customer data handling is managed by the platform. But your own customer database (for newsletters, direct marketing, loyalty programs) is fully subject to PIPA.

Hiring and Fulfillment

Hiring in Korea

If you plan to hire Korean employees:

• Register for the 4 major social insurances (national pension, health insurance, employment insurance, workers’ compensation)
• Employment contracts must be in writing, in Korean (or bilingual)
• Statutory severance of 1 month per year of service applies from day 1

Logistics and Fulfillment

Korean consumers expect fast delivery — next-day or same-day is now standard in major cities. Options:

For imported goods, factor in:

• Customs clearance (관세사 — licensed customs broker required for commercial imports)
• Import duties (vary by product category and origin country)
• Labeling requirements in Korean for food, cosmetics, and electronics

Common Pitfalls for Foreign E-Commerce Operators

How SMA Law Firm Can Help

Setting up an e-commerce operation in Korea involves multiple legal layers — company formation, business licensing, tax registration, data privacy compliance, and marketplace agreements. Getting the foundation right from the start saves costly corrections later.

SMA Law Firm assists foreign e-commerce entrepreneurs with:

• Korean LLC or Corporation formation (end-to-end)
• Online business registration (통신판매업 신고)
• FIPA notification for qualifying investments
• PIPA compliance review and privacy notice drafting
• Employment contract and HR setup for first hires
• Ongoing corporate compliance (VAT filing coordination, annual reports)

📩 Contact us at sma@saemunan.com to schedule a consultation. We work with foreign founders at every stage — from pre-launch planning to scaling operations across Korea.

This article is for informational purposes only and does not constitute legal advice. For advice specific to your business situation, please consult a qualified Korean attorney.