TITLE : FAQ on FDI in Korea 2023 (Q61~Q65)
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■ FAQ on FDI in Korea 2023 (Q61~Q65)
Establishment of Corporation
Q61 Is it true that a foreign-invested company cannot use the same trade name that is already used in Korea?
A61 Article 29 of the Commercial Registration Act (Unregistrable TradeNames) prescribes “No trade name same as a trade name registered by another merchant for the same type of business shall be registered in the same Special Metropolitan City, Metropolitan City, Special Self-governing City, Si (including an administrative Si) or Gun (excluding a Gun within the jurisdiction of a Metropolitan City).”
- Therefore, when selecting a trade name, a foreign-invested company shouldcheck whether the selected trade name already exists at the Registrar of Supreme Court Internet Register Office at (http://www.iros.go.kr).
Q62 When registering incorporation of a foreign- invested company, can the trade name be registered in English?
A62 A trade name in English cannot be registered. However, it ispossible to use a Korean trade name and put an English tradename in parentheses.
- Only Korean characters and Arabic numerals are allowed in filling outthe application form or other documents related to the registration forincorporation.
- However, a trade name and the name of a foreigner should be recorded inKorean characters or Korean characters and Arabic numerals in accordancewith the established rules of the Supreme Court and the Roman alphabet,Chinese characters, Arabic numerals and symbols may be entered side-byside (Article 2 of the Rules on Commercial Registration
Q63 What documents are required in registration of incorporation of a stock company?
A63 In the event of incorporation by promotion, registration forincorporation should be completed within two weeks of the date of the completion of the inspection on the incorporation process and in the event of incorporation by subscription, within two weeks of the date of the completion of the inaugural meeting.
- The composition of incorporators and existence of the same trade nameshould be reviewed prior to the registration of incorporation. A stock company requires one or more incorporators who are required to acquirestocks in writing and become the shareholders of the newly created corporation.
< Documents Required for registration of incorporation >
1 | An application for registration of incorporation |
2 | Articles of incorporation (notarized when the total capital is not less than KRW 1 billion) |
3 | A copy of document certifying the acquisition of stocks |
4 | The stock subscription agreement (in the case of incorporation by subscription) |
5 | Written consent to matters concerning issuance of stocks |
6 | Written consent to a reduction of the notice period for the inaugural meeting (in the case of the reduction of the notice period) |
7 | The minutes of the inaugural meeting or the minutes of the incorporators’ meeting (notarized when the total capital is not less than KRW 1 billion) |
8 | The minutes of the board of directors’ meeting (notarized when the total capital is not less than KRW 1 billion) |
9 | A certificate for custody of stock subscription payment (can be substituted by a certificate of balance when the total capital is less than KRW 1 billion) |
10 | An inspection report by directors, auditors, or the audit committee |
11 | A certificate of transfer of assets (in case of investment in kind) |
12 | A report on the particulars of exceptional incorporation prepared by a notary |
13 | An appraisal report by a certified appraiser |
14 | A certified copy of an investigation report by an inspector |
15 | A certificate of notification of foreign investment |
16 | A certificate of inauguration acceptance for executive officers*
|
17 | A certificate of registration of seal impression (notarization of signature)* |
18 | A certified copy of resident registration (a certificate of address)* |
19 | Translations of the required documents (In case where the required documents including the directors’ inauguration acceptance are written in a foreign language) |
20 | A certificate of payment of registration tax (issued by the tax department of the Gu office having jurisdiction over the area in which the business’ headquarters is located) |
21 | Supreme Court revenue stamp |
22 | A power of attorney (where an agent makes the application)* |
23 | Corporate sea |
24 | An application for issuance of a corporate seal card (after the registration for incorporation) |
Q64 What information should be recorded in the articles of association?
A64 The following information need to be included in the articles ofassociation.
- Matters absolutely required to be entered (Article 289 (1) of the CommercialAct):
- If any of the following matters is omitted in the articles of association,the establishment of the company shall become null and void
a. Objectives
b. Trade name
c. The total number of shares authorized to be issued
d. Par value per share: At least KRW 100
e. Total number of shares to be issued at the time of incorporation
f. The location of a principal office
g. Method of giving a public notice by the company
h. The name, resident registration number and address of each incorporator
- If any of the following matters is omitted in the articles of association,the establishment of the company shall become null and void
- Relative matters required to be entered (Article 290 of the Commercial Act):
- ① Particulars of exceptional incorporation ② Other relative mattersrequired to be entered
* “Particulars of exception incorporation” refers to matters that maybe abused by incorporators at the time of incorporation, which mayundermine capital adequacy and that will take effect upon entry into thearticles of incorporation (Article 290 of the Commercial Act)
a. Any special benefits to be received by incorporators and names ofsuch incorporators
b. The name of a person who is to make an investment in kind, the type,quantity and value of the subject matter of such investment in kind andthe class and number of shares to be given in consideration thereof
c. The class, number and value of the assets agreed to be transferred tothe company after its incorporation and the name of the transferor
d. The expenses for incorporation to be borne by the company and theamount of remunerations for the incorporators - The particulars of exceptional incorporation shall be entered into a sharesubscription form signed by incorporators and be reviewed by inspectors(Article 299 and Article 302 (2) 2 of the Commercial Act)
- ① Particulars of exceptional incorporation ② Other relative mattersrequired to be entered
- Optional matters that can be entered
- Optional matters have no specific impact on the effects of the articlesof association or on the business activities of a company when theyare not entered into the articles of association, but will have the samelegal effect as other matters upon entry into the articles of association.Optional matters differ from relative matters in that the latter takes effectonly upon entry into the articles of association.>
- Optional matters include matters on business operations (e.g., thenumber of directors/auditors, a schedule of general meetings, businessyear, opening/relocation/closure of branches, etc.) within the boundariesthat do not counter the essence of a stock company, imperativeprovisions of laws, and social order and take effect upon entry into thearticles of association.
Q65 . What documents should a foreign investor prepare when establishing a corporation?
A65 Documents a foreign investor should prepare in his/her countryvary depending on whether the investor is an individual or a corporation. The document requirements for foreign investors from Japan or Taiwan are the same as those for a Korean national or corporation. In addition, some of the documents required should be apostilled or notarized by a public notaryand subsequently by the Korean consulate located in the home country of the foreign investor in case of a non-signatory nation of the Apostille Convention
< Documents Required for Individual Investors >
Application for registration of corporate seal impression | Affix the personal seal or signature of the representativedirector on the application of registration of corporate seal impression and have it notarized (notarization required for countries without a seal certification system) |
A certificate ofacceptance of inauguration /a certificate of seal impression | For all individuals to be inaugurated as executive officers ofthe corporation to be established: 1. Korea/Japan/Taiwan: put the personal seal on a certificateof inauguration acceptance and attach a certificate of sealimpression. 2. Other countries without a seal certification system: sign acertificate of inauguration acceptance and have it notarized |
A certificate ofresident register (abstract) or a certificate of address (for a representative director) | Attach the following documents to a certificate ofinauguration acceptance: 1. Korea/Japan/Taiwan: a certificate of resident register(abstract) or a resident registration card 2. Other countries: proof of address from the relevant countryand a notarized certificate of address (not required for nonrepresentative directors and auditors |
A power of attorney | When delegating foreign investment notification, etc. to anagent 1. Japan/Taiwan: put the seal on the power of attorney andattach a certificate of seal impression 2. Other countries without a seal certification system: put thesignature on the power of attorney and have it notarized. |
A copy of passport | For all foreigners |
< Documents Required for Individual Investors>
A certified copyof corporate registration (an investor corporation) | 1. Japanese/Taiwanese corporations: a certified copy ofcorporate registration 2 Other countries: a certificate of corporation from therelevant country or a notarized certificate that proves theexistence of business |
Application forregistration of corporate seal impression (for the newly-founded corporation) | Affix the personal seal or signature of the representativedirector on the application for registration of corporate seal impression and have it notarized (notarization required for countries without a seal certification system.) |
A certificate ofacceptance of inauguration/a certificate of seal impression | For all individuals to be inaugurated as executive officers ofthe corporation to be established 1. Korea/Japan/Taiwan : put the personal seal on a certificateof inauguration acceptance and attach a certificate of sealimpression. 2. Other countries without a seal certification system: sign acertificate of inauguration acceptance and have it notarized. |
A certificate ofresident register (abstract) or a certificate of address (for a representative director) | Attach the following documents to a certificate ofinauguration acceptance 1. Korea/Japan/Taiwan: a certificate of resident register(abstract) or a resident registration card. 2. Other countries: proof of address from the relevant countryand a notarized certificate of address (not required for nonrepresentative directors and auditors |
A power of attorney | When delegating a foreign investment report to an agent 1. Japan/Taiwan: put the corporate seal on the powerof attorney and attach a certificate of corporate sealimpression 2. Other countries without a seal certification system: putthe signature of the representative director of an investorcorporation on the power of attorney and have it notarized. |
Copy of passport | For all foreigners |