Quick answer
The statutory cost of registering a Korean stock company (chusik hoesa) is driven by paid-in capital: registration license tax of 0.4% of capital (minimum KRW 112,500), tripled when the company is set up in a “large city” such as Seoul, plus local education tax of 20% of that tax and a KRW 35,000 court filing fee. With KRW 100 million of capital, that is about KRW 1.48 million in Seoul and KRW 0.52 million outside the overcrowding zone. Legal fees, document legalization, office and running costs come on top, and the capital itself is not an expense: it stays in the company’s account.
To run your own figures, use the Korea incorporation cost calculator.
Budget at a Glance: Four Cost Buckets
Founders comparing quotes often mix four different kinds of money. Keep them apart:
| Bucket | What it is | Who sets the amount | Spent or kept? |
|---|---|---|---|
| Public charges | Registration license tax, local education tax, court filing fee | Statute (formula below) | Spent |
| Professional fees | Legal/incorporation service, translation, apostille, notarization abroad | Provider quote | Spent |
| Paid-in capital | Money remitted and registered as share capital | You (FDI rules set a practical floor) | Kept — company’s own funds |
| Operating budget | Office, payroll, accounting, insurance until revenue starts | Your business plan | Spent over time |
1) Public charges: the formula
All figures below come from the Local Tax Act (Article 28 and Article 151) and the Supreme Court rules on registration fees, as in force in October 2026.
- Registration license tax = paid-in capital × 0.4%, with a floor of KRW 112,500.
- Large-city surcharge: if the company is incorporated in a “large city” (the Seoul Metropolitan Area overcrowding control zone, which covers all of Seoul, excluding industrial complexes), the tax is 3× (effectively 1.2% of capital, floor KRW 337,500). Certain business types designated by Presidential Decree are exempt from the surcharge.
- Local education tax = 20% of the registration license tax.
- Court filing fee for the incorporation registration = KRW 35,000.
Notarization of the articles of incorporation is not required for a company with capital under KRW 1 billion incorporated by promoters (Commercial Act Article 292), which covers most foreign-owned startups.
2) Worked examples
Assumptions: stock company, incorporation by promoters, cash contribution only, no surcharge exemption.
| Scenario | Capital | Location | Registration license tax | Education tax (20%) | Court fee | Total public charges |
|---|---|---|---|---|---|---|
| A. Typical FDI / D-8 set-up | KRW 100,000,000 | Seoul (3×) | 1,200,000 | 240,000 | 35,000 | KRW 1,475,000 |
| B. Same capital, outside the zone | KRW 100,000,000 | e.g. Busan, Daejeon (1×) | 400,000 | 80,000 | 35,000 | KRW 515,000 |
| C. Larger capital | KRW 300,000,000 | Seoul (3×) | 3,600,000 | 720,000 | 35,000 | KRW 4,355,000 |
| D. Small capital, no FDI | KRW 10,000,000 | Seoul (3×, minimum applies) | 337,500 | 67,500 | 35,000 | KRW 440,000 |
Scenario D shows the floor: 0.4% of KRW 10 million is only KRW 40,000, so the KRW 112,500 minimum applies before the 3× surcharge. Note also that the surcharge reaches capital increases within five years of incorporating in a large city, so a later top-up in Seoul is taxed at 1.2% as well.
3) A full first-year budget, worked through
Scenario A (KRW 100 million, Seoul), with the items you must fill in from quotes marked clearly. The bracketed operating figures are planning assumptions for illustration, not market prices; replace them with your own numbers.
| Line | Amount (KRW) | Basis |
|---|---|---|
| Public charges | 1,475,000 | Statutory, scenario A |
| Legal / incorporation service | Fixed-fee quote | Quoted after scoping; depends on shareholders, FDI reporting and bank support |
| Apostille / translation of foreign documents | Per document | Set by the issuing country and translator; count your parent-company and shareholder documents |
| Paid-in capital | 100,000,000 | Kept in the company account; usable for business after registration |
| Office (assumption: shared desk [500,000/month] × 12) | [6,000,000] | Replace with actual lease or service office quote |
| Bookkeeping & tax filing (assumption: [300,000/month] × 12) | [3,600,000] | Replace with your accountant’s quote |
| Cash you will actually spend in year one | 1,475,000 + quotes + [9,600,000] | Excludes payroll and the capital |
The useful exercise is the last line: it separates what you pay out from the capital that remains the company’s money. For how that capital can be spent after registration, see using paid-in capital after incorporation, and for the remittance paperwork see FDI capital remittance and the deposit certificate.
If you send us your intended capital, office location and shareholder structure, we return the same table with the public charges calculated and our fixed fee filled in, so you can compare like with like.
Understanding the Costs of Company Formation in Korea
Expanding your business into South Korea presents remarkable opportunities, yet many foreign entrepreneurs underestimate the full spectrum of expenses involved in company registration. A successful market entry requires not just understanding the official filing fees but also considering taxes, professional services, and ongoing compliance obligations that could impact your financial planning and strategic direction. This guide will help you navigate these complexities effectively.
1. Government and Legal Filings ⚖️
Every business entity in Korea must register with the local district court and comply with various tax obligations. Key costs include:
- Registration License Tax: 0.4% of paid-in capital (minimum KRW 112,500), tripled in the Seoul overcrowding control zone.
- Local Education Tax: 20% of the registration license tax.
- Court Filing Fee: KRW 35,000 for the incorporation registration. Notarizing the articles is not needed for promoter incorporations with capital under KRW 1 billion.
Understanding these government fees is crucial as they form the foundation of your overall startup costs.
2. Capitalization Requirements 💰
Korea does not have a statutory minimum capital requirement for Limited Liability Companies (Yuhan Hoesa) or Joint Stock Companies (Chusik Hoesa). However, to qualify as a Foreign-Invested Company under the Foreign Investment Promotion Act, each foreign investor generally needs to invest at least KRW 100 million, which is also the usual baseline for a D-8 investor visa. See minimum capital and the FDI threshold for the details. Sufficient capitalization not only enhances your credibility with banks and local partners but also facilitates smoother operational processes.
3. Engaging Professional Support 📑
Navigating the complexities of legal filings and language barriers is often best managed with the help of local experts. Key professional services you may require include:
- Legal Consultation and Company Incorporation: Specialists help ensure compliance with local laws.
- Document Translation and Notarization: Accurate translation is crucial for legal documents.
- Accounting and Tax Registration: Ensure your business meets all financial obligations.
Hiring professionals not only saves time but also minimizes the risk of errors, allowing you to focus on your business strategy.
4. Office and Address Requirements 🏢
Every company in Korea must maintain a registered office address. Your options include:
- Virtual Offices: May be acceptable depending on the district and industry.
- Serviced Offices or Coworking Spaces: Offer flexibility and moderate costs, ideal for startups.
- Dedicated Offices: Often preferred by established businesses for a more professional image.
Your choice of office impacts both your financial viability and strategic positioning in the market.
5. Banking and Administrative Compliance 🏦
Opening a corporate bank account is vital for any business operation in Korea. This process requires:
- Initial Deposits: Banks often require a minimum deposit to open an account.
- Transaction Management: Regular banking activities must comply with local regulations.
- Official Seals and Certified Documents: Essential for various administrative functions.
These banking requirements are crucial for maintaining smooth operations and complying with local laws.
6. Ongoing Compliance Obligations 📊
Once your company is registered, you will face ongoing compliance responsibilities, including:
- Annual Corporate Tax Filings: Required for all registered businesses.
- Social Insurance Enrollment: Mandatory for employees.
- Financial Statement Audits: Necessary for companies exceeding specific revenue thresholds.
While smaller businesses may be exempt from audits, budgeting for compliance is essential to maintain good standing with local authorities.
Balancing Costs with Strategic Growth
Establishing a company in Korea involves unavoidable expenses, but these should be viewed as investments in your long-term success. For businesses that are not ready to fully commit to a legal entity, alternatives like Employer of Record (EOR) services provide a flexible and compliant entry into the South Korean market.
Partnering with Experts
At StartCompanyKorea, we specialize in helping international companies understand the true costs of incorporation in Korea and make informed strategic decisions for successful market entry. From company formation to payroll and compliance, we provide transparent, end-to-end support.
Ready to Take the Next Step?
Email us your planned capital, city and shareholder structure, and we will send back the budget table above with public charges calculated and a fixed legal fee. For the process itself, see our step-by-step guide to Korea company registration, and for a wider range of cost items see Korea company formation costs in 2026.
FAQ
How much tax do I pay to register a company in Seoul with KRW 100 million?
About KRW 1,440,000 in taxes (registration license tax of KRW 1,200,000 plus local education tax of KRW 240,000), plus a KRW 35,000 court filing fee.
Is the paid-in capital a cost?
No. It is deposited and registered as the company’s share capital and remains the company’s money, available for business expenses after incorporation.
Why is it cheaper outside Seoul?
The 3× registration tax surcharge applies only to incorporations in the overcrowding control zone. Outside it, the rate is 0.4% of capital.
Does a later capital increase cost the same?
A capital increase is taxed at 0.4% of the new capital, and at 3× if it happens within five years of incorporating in a large city such as Seoul.
Conclusion
Establishing a business presence in South Korea can be a rewarding venture, provided you are well-prepared to tackle the complexities of company formation and compliance. By understanding the costs involved and seeking professional guidance, you can pave the way for a successful expansion into this dynamic market.
Official Sources
For authoritative reference, consult the following Korean government portals: