Stock Corporation (CH)
주식회사 (Chusik Hoesa)
Company formation in South Korea
The CH is best suited for: Companies planning to raise venture capital or private equity in Korea, Businesses targeting an eventual IPO on the Korea Exchange (KRX) or KOSDAQ, Large-scale operations requiring maximum credibility with Korean corporates and government agencies, Foreign companies entering Korea with significant investment and growth plans. A Chusik Hoesa is subject to the same progressive corporate income tax rates as a Yuhan Hoesa: 9% on the first KRW 200 million, 19% on KRW 200 million to KRW 20 billion, 21% on KRW 20 billion to KRW 300 billion, and 24% above KRW 300 billion. Local income tax at 10% of the national liability is also levied. Korea offers various tax incentives for foreign-invested enterprises, including tax reductions or exemptions for investments in designated high-technology industries, free economic zones, and industrial complexes. Withholding tax on dividends to non-residents is 20% (reduced under treaties). Capital gains on the sale of shares by non-residents are generally subject to the lower of 20% of the gross sale price or the applicable corporate tax rate on the net gain.
- Companies planning to raise venture capital or private equity in Korea
- Businesses targeting an eventual IPO on the Korea Exchange (KRX) or KOSDAQ
- Large-scale operations requiring maximum credibility with Korean corporates and government agencies
- Foreign companies entering Korea with significant investment and growth plans
Key Facts
Step-by-Step Formation Process
File Foreign Investment Notification
Submit a Foreign Investment Notification with KOTRA or a designated foreign exchange bank, specifying the investment amount, business type, and corporate structure. This is mandatory for foreign direct investment.
Transfer and certify investment capital
Wire the investment funds to a Korean foreign exchange bank. The bank issues a capital arrival certificate. Although the statutory minimum capital requirement was removed in 2009, a practical minimum of KRW 100 million is recommended for credibility and to meet the foreign investment threshold.
Prepare and execute incorporation documents
Draft the Articles of Incorporation in Korean, including company name, business purposes, total authorized shares, par value, directors and auditors (if applicable). For companies with capital of KRW 1 billion or more, an auditor or audit committee is mandatory. Hold an inaugural general meeting of shareholders to adopt the articles and appoint directors.
Register with the Court Registry
File the incorporation application at the District Court Registry with the articles of incorporation, minutes of the inaugural meeting, director and auditor appointment documents, proof of capital, and the registration license tax. The court processes the registration and issues a certificate of incorporation.
Complete post-incorporation registrations
Register with the National Tax Service for corporate income tax and VAT. Register the company with the local district office. Enroll in the four mandatory social insurance schemes. Open a corporate bank account. Foreign-invested companies should also file a Foreign-Invested Enterprise Registration with the Ministry of Trade, Industry and Energy to access potential incentives.
Required Documents
- Articles of Incorporation in Korean
- Foreign Investment Notification certificate
- Capital arrival certificate from a foreign exchange bank
- Apostilled passport copies and proof of address for directors and shareholders
- Minutes of the inaugural shareholders' meeting
- Director and auditor appointment and consent documents
- Registered office lease agreement in Korea
- Seal registration for the representative director
Cost Overview
Tax Treatment
A Chusik Hoesa is subject to the same progressive corporate income tax rates as a Yuhan Hoesa: 9% on the first KRW 200 million, 19% on KRW 200 million to KRW 20 billion, 21% on KRW 20 billion to KRW 300 billion, and 24% above KRW 300 billion. Local income tax at 10% of the national liability is also levied. Korea offers various tax incentives for foreign-invested enterprises, including tax reductions or exemptions for investments in designated high-technology industries, free economic zones, and industrial complexes. Withholding tax on dividends to non-residents is 20% (reduced under treaties). Capital gains on the sale of shares by non-residents are generally subject to the lower of 20% of the gross sale price or the applicable corporate tax rate on the net gain.
Pros & Cons
- The most recognized and prestigious corporate form in Korea — essential for dealings with major Korean conglomerates (Chaebols)
- Can issue shares to the public and list on the KRX or KOSDAQ exchange
- No cap on the number of shareholders — suitable for large-scale investment and public offerings
- Eligible for various government incentives, grants, and R&D tax credits for foreign-invested enterprises
- Strong corporate governance framework that provides transparency and investor protection
- Familiar structure for international investors and venture capital firms
- Higher compliance costs due to audit requirements (mandatory for companies with assets of KRW 12 billion or more or listed companies)
- More complex governance structure — larger companies may need a board of directors, auditor, and potentially an audit committee
- Registration and annual maintenance costs are higher than a Yuhan Hoesa
- All official filings, tax returns, and corporate records must be maintained in Korean
- External audit is mandatory when total assets exceed KRW 12 billion, increasing compliance costs
Other Structures in South Korea
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.