South Korea

Click here for more Asia Links and Resources

FITA helps you find
service providers for:

Business Environment

Business Practices

General information: Blog of Korean Business Culture
Dong Business in Korea
Soft Landing Korea
Opening hours and days: Public office and lots of private offices are closed on Saturday and Sunday.
Banks: from 9.30 to 16.30, Monday to Friday, from 9.30 to 13.30 on Saturdays.

Public holidays

New Year's Day	January 1st
Lunar New Year's Day	January 1st of Lunar calendar
Independance Movement Day	March 1st
Labor Day	May 1st
Children's Day	May 5
Buddha's Birthday	April 8 of Lunar calendar
Memorial Day	June 6
Constitution Day	July 17
Liberation Day	August 15
Chuseok (Korean Thanksgiving Day)	August 15 of Lunar calendar
Nation Foundation Day	October 3
Christmas	December 25

Periods when companies usually close

Lunar New Year's Day Season	January 1st of Lunar calendar
Chuseok (Korean Thanksgiving Day)	August 15 of Lunar calendar
Summer vacation season	July or Aug according to companies
Winter vacation season	According to companies, between Christmas and New Year's day

Accounting Rules

Tax year: From January 1st to December 31st.
Accounting standards: Statement of Korea Accounting Standards.
Accounting regulation bodies: FSS
KAI
Accounting reports: Balance sheet, income statement, statement of cash flows, explanatory notes.
Publication requirements: 1)The companies quoted in the stock-exchange and KOSDAQ market have to follow the disclosure regulation:
- Periodic disclosure : the business reports after the end of a fiscal year, semiannual reports, and quarterly
reports, etc.
- Timely disclosure : major business details as outlined in the Securities Exchange Act and the Disclosure Regulations of the
KRX-Stock Market
- Special disclosure : merger, ·spin-off, reports of business takeover & transfer, reports of acquisition &
disposal of treasury stocks, etc.

2) External Auditing companies are required to disclose Audiiting report.

3)Corporations that issue securities are required to disclose public securities registration statements, business prospectuses, records of securities issuances, etc.
More information on Korea exchange website.
Professional accountancy bodies: KICPA
KACPTA
Certification and auditing: Ernst and Young Global
Deloitte Touche Tohmasu
KPMG International
Price Waterhouse Coopers
Accounting news: Korea Accounting Institute

Tax Rates

Consumption taxes

Nature of the tax: Value Added Tax (VAT)
Tax rate: 10%
Reduced tax rate: A 0% rate regarding exports.
Other consumption taxes: Special Excise Tax, Liquor, Tobacco Tax, Stamp, Energy, Environment, Transportation, Auto Tax, etc.

Corporate taxes

Company tax: 11% (up to KRW 200 million)
22% (More than KRW 200 million)
Tax rate for foreign companies: Taxation is based on the annual business income. Since most of the foreign investors are corporations and thus liable to pay it, corporate tax makes up the largest portion of the total taxes related to foreign investment. Under the tax agreement, only the income from the permanent establishment of a foreign company is taxable. Permanent establishments here refer to branches, warehouses, stores, or other establishments for installment or construction projects. A company which has a right to sign a contract or which conducts its business and trade through an agent who on behalf of the company buys or sells its stocks is also subject to tax. More information on Invest Korea website.
Capital gains taxation: The capital gains tax applies to the income coming from the transfer of certain assets by an individual in a given year. A corporation is not subject to capital gains tax, and is instead taxed on income generated from this transfer in a form of corporate tax. More information on Global Seoul website.
Main allowable deductions and tax credit: Tax deduction or exemption for farming cooperatives, fisheries cooperatives, forestry development income, small start-up businesses, start-up companies, foreign investment, disaster loss, Investment, R&D, etc. Consult Invest Korea website.
Other corporate taxes: Urban Planning Tax, Business Place Tax, Community Facility Tax, Local Education Tax, etc.

Individual taxes

Tax rate

Up to KRW 12 million	6% of tax base
From KRW 12 to 46 million	KRW 1.2 million + 16% of the amount exceeding 10 million Won
From KRW 46 to 88 million	KRW 5.340 million + 25% of the amount exceeding 40 million Won
More than KRW 88 million	KRW 14.140 million Won + 35% of the amount exceeding 80 million Won

Special expatriate tax regime: Yes. It concerns especially National pension.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of Korea's International Tax Treaty
Whithholding taxes: Dividends: 0/27%, Interest: 0/27%, Royalties: 0/27.5%

Sources of fiscal information

Tax Authorities: National Tax Service
Other domestic resources: Seoul City

Intellectual Property

National organizations: Korea Industrial Property Office (KIPO)
Korea Institute of Patent Information (KIPI)
International Intellectual Property Training Institute (IIPTI)
Korea Copyright Commission
Korea Patent Attorneys Association (KPAA)
Regional organizations: Intellectual Property Rights Experts Group (IPEG)
International membership: Member of the WIPO
Signatory to the Paris Convention for the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National regulation and international agreements

Type of property and law	Validity	International agreements signed
Patent Patent Law	20 years	Patent Cooperation Treaty (PCT) Strasbourg agreement concerning the International Patent Classification
Trademark Trademark Law	10 years renewable every 10 years	Trademark law treaty Nice agreement Protocol relating to the Madrid Agreement
Design Design Law	15 years
Copyright Copyright Law	50 years after the death of the author (It will be 70 years from the end of 2009 or 2010)	Berne convention Convention for the Protection of Producers of Phonograms against unauthorized duplication of their phonograms Rome convention for the protection of performers, producers of phonograms and Broadcasting organizations WIPO copyright treaty WIPO performances and Phonograms treaty
Industrial Models Utility Model Law	10 years

Legal Framework

Independence of justice: Yes
Equal treatment of nationals and foreigners: Yes
The language of justice: Korean
Recourse to an interpreter: Yes. With the rapid increase of the crime committed by the foreigners, the Korean courts are trying to staff up more necessary interpreters.
Sources of the law and legal similarities: The system is modeled on European systems with Anglo-American influences like Japan.
Checking national laws online: Total Korean law service of Supreme Court
Total Korean law service
Ministry of Government Legislation (MOLEG)
Korea Legislation research Institute (KLRI)
Ministry of Finance and Economy (MOFE)

Standards

National standards organizations: Korean Agency for Technology and Standards (KATS)
Integration in the international standards network: International Level: The International Standard organization (ISO); The International Electrotechnical Commission (IEC).

Asia-Pacific Level: The APEC/SCSC; The ASEM/TFAP/SCA, Trade Facilitation Action Plan/Standards and Conformity Assessment of the Asia-European meeting; The Pacific Area Standards Congress (PASC).
Classification of standards: KS consists of 16 categories from General to Information Industry and is divided into three parts. More information available on The Korean standards website.
Online consultation of standards: Korean Standards Service Network
Certification organizations: Korean Standards Association (KSA)

Any comments about this content? Report it to us.