Liaison Office

A Liaison Office in Korea

• According to the Foreign Investment Promotion Act in Korea, the Foreign investment is classified as (1) ‘Foreign Direct Investment’, which establishes a local corporation by transferring legal capital to Korea and (2) ‘Foreign Indirect Investment’, which invests in the public bonds & the real estates appointed by the Korean Government by transferring foreign funds to Korea.
• Foreign Corporations would establish a Liaison Office in Korea if they want to carry out non-profit activities in Korea, such as customer consultation, market research or outsourcing.

Advantages of a Liaison Office

Under the policy of actively attracting foreign investment, the foreign investment is granted Governmental incentives as well as benefits such as Permanent Residence Visa (F5), Long-Term Residence Visa (F2), Voting Rights, Use of Express Immigration Gate if qualified

1. No Legal Capital is required.

1. The establishment of a Liaison Office in Korea are not required any income certificate, Korean proficiency test, academic degree, work experience or legal capital investment.

2. The establishment process is relatively simple.

1. The establishment procedure for a Liaison Office is relatively simple compared to that of a foreign-invested corporation (FIC), meaning you can establish a Liaison Office quickly.

3. Executives and Employees can be dispatched to Korea.

1. Executives and employees in the mother company can be dispatched to the Liaison Office in Korea.

4. Long-Term Residence Visa F2, Permanent Residence Visa (F5), or Korean Citizenship can be granted.

1. The Executives and employees dispatched to the Liaison Office in Korea can applied to Long-Term Residence Visa (F2), Permanent Residence Visa (F5) or Korean Citizenship if qualified.

5. Free real estate transactions are guaranteed.

1. The Executives and employees dispatched can acquire real estates such as apartments and offices without any restrictions, take out loans with the purchased real estates as collateral, and transfer business income and real estate sales funds to overseas if the requirement is fulfilled.

6. Studying in a school is allowed.

1. The Executives and employees dispatched can study in a school without a student visa or permission in Korea.

7. Signing up for the major social insurances is allowed.

1. The Executives and employees dispatched are covered by 4 major social insurances, such as Health Insurance, Unemployment Insurance, National Pension, Industrial Accident Insurance.

8. The family members get the same benefits.

1. The spouse, underage children, and unmarried children can receive the same benefits.

Foreign Invested Corporation VS Branch VS Liaison Office

1. Commercial Business Activities for Profit Purpose

1. While the Foreign Invested Corporations and the Branches can carry out commercial business activities for profits purpose without any restrictions, the Liaison Offices can only conduct non-profit activities such as market research, etc. and cannot issue legal tax invoices for tax reports.

2. Tax Reduction

1. The Foreign Invested Corporations can receive tax reductions on corporate income tax, acquisition tax, registration tax, comprehensive real estate tax under the Foreign Investment Promotion Act. However, the Branches and the Liaison Offices cannot receive such tax reductions.

3. Requirement for Remittance of Legal Capital

1. While the Foreign Invested Corporations are required to remit the legal capital to Korea, the Branches and the Liaison Offices are not required the legal capital.

4. Visa Type

1. The Foreign Invested Corporations can apply for Investor Visa (D8) or Dispatched Staff Visa (D7), and the Branches and the Liaison Offices are only allowed to apply for Dispatched Staff Visa (D7).

The differences among the Foreign Invested Corporations, the Branches and the Liaison Offices are as follows.

• The Requirement of Legal Capital : the Foreign Invested Corporations
• The Requirement of Court Registration : the Foreign Invested Corporations and the Branches
• The Business Activity for Profits : the Foreign Invested Corporations and the Branches

	FIC	Branch	Liaison
Foreign Investment Report	O	X	X
Certificate of FIC	O	X	X
Legal Capital	O	X	X
Court Registration	O	O	X
Business Activity for Profit	O	O	X
Bank Account	O	O	O
Visa Type	D7, D8	D7	D7
Purchase of Real Estates	O	O	O

Remark

• 1. Legal Capital : Min. KRW100,000,000 (USD77,000 min.)
• 2. The Legal Capital must be transferred from aboard. (Any local fund in Korea is not considered as the legal capital.)

Therefore, the decision should be made reasonably in consideration of business purposes as well as legal capital remittance

The Establishment Procedure of a Liaison Office

1. The Establishment Procedures for the Branch and the Liaison office are applied to that of the FIC by exempting (1) the Foreign Investment Report (2) the Remittance of Legal Capital (3) Court Registration (the Branch is required).

Inquiry for the Liaison Office

Q & A

Can the Korea Liaison Office engage in international trade business ?

1. The Korea Liaison Office cannot issue a tax receipt for business transactions and is only allowed non profit business activity such as client counseling, supervising, and market research. Therefore, the Korea Liaison Office is not allowed to engage in international trading.

Can the foreign company dispatch its employees to the Liaison Office ?

1. The Foreign company having the Korea Liaison Office can dispatch Representative as well as professional employees for the Operation of the Korea Liaison Office.

Can I change a Dispatched Staff Visa D7 to Residence Visa F2 or Permanent Residence Visa F5 ?

1. Dispatched Staff Visa D7 Holders can applied to Residence Visa F2, Permanent Residence Visa F5, or Korean Citizenship if legal stay duration, Income requirement and other requirements are qualified.

Check Points for the Liaison Office

1. Remittance of operating funds from the mother company

1. The operating funds of the Korean branch, such as office rental, employee salary, and necessary expenses, must be transferred from the mother company in overseas.

2. Proof of Operational Performance

1. The performance of the operation of the Korean branch must be proved by preparing the Financial Statement and accounting documents.

Inquiry on other Foreign Investments

DaeHan Public Administrative Attorney’s Office has specializes in Foreign Invested Corporations (FIC) including Korea Branches and Liaison Offices, Immigration on Public Bond Investment and Real Estate Investment, and has provided Immigration & Investment Solutions, D8, D7 Visa Consulting, Management, Tax and Marketing consulting. We can submit any application for licenses or permits on the behalf of clients.

Please contact us for the following issues. (1) Establishment of Foreign Invested Corporations (FIC) & Liaison Offices (2) Dispatch of Staffs on Long-Term Visas (3) Immigration on Public Bond Investment (4) Immigration on Real Estate Investment (5) Visa Consulting on D8, D7, F5, F2 (6) Family Invitation & Other Immigration Issues (7) M&A & Technology Outsourcing (8) Stock Market Investment (KOSPI, KOSDAQ) (9) Management & Tax Consulting (10) Marketing & Trading Consulting.