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flag South Korea South Korea: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labor | Social Partners

 

Setting Up a Company

Yuhan Hoesa is a Private Limited Company.
Number of partners: One or more partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is limited to the amount contributed.
Chusik hoesa is a Public Limited Company.
Number of partners: One or more partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is limited to the amount contributed.
Hapcha Hoeasa is a limited partnership
Number of partners: One or more partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed when they do not take part in the company management.
Hapmyung Hoesa is a general partnership.
Number of partners: One or more partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is unlimited.
The Competent Organization
- The Supreme Court
- The Tax office having jurisdiction over the head office
- Invest Korea
 
Setting Up a Company South Korea OECD
Procedures (number) 5.0 5.0
Time (days) 7.0 12.0

Source: Doing Business.

 
Business Setup Procedures
Consult Doing Business Website, to know about procedures to start a Business in South Korea.
Korea Business Central

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The Active Population in Figures

201120122013
Labor force 25,100,00025,500,00025,860,000

Source: CIA - The world factbook

 
200920102011
Total activity rate -60.90%60.20%
Men activity rate 72.00%71.60%71.40%
Women activity rate 50.10%49.20%49.20%

Source: UN - United Nations

 
Employed Persons, by Occupation (% of Total Labor Force) 2008
Manufacturing 16.8%
Real Estate, Renting and Business Activities 9.4%
Hotels and Restaurants 8.7%
Transport, Storage and Communications 8.0%
Construction 7.7%
Education 7.6%
Other Community,Social and Personal Service Activities 7.6%
Health and Social Work 3.6%
Financial Intermediation 3.5%

Source: ILO, International Labor Organization

 
For Further Statistics
Korea National Statistical Office
For Further Information About the Labor Market
NLRC, National Labor Relations Commission
Human Resources Development Service of Korea

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Working Conditions

Legal Weekly Duration
40 (or 44) hours per week.
Retirement Age
No obligatory retirement age. In major companies, the retirement ages is 54 or 56,4. But in labor market, the Korean employees are working up to 67~68.
Working Contracts
In Korea, the contract determines if the employee is part of the regular or non-regular staff. Permanent employees form the regular staff. Among the non-regular staff, there are different types of contract: part-time workers, temporary workers, dispatched workers, fixed-term contract workers, entrusted employees.
Labor Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labor

Minimum Wage
KRW 902,880 per month (source: ILO, 2011).
Average Wage
Average monthly gross earnings in South Korea is KRW 3,551,046 (2,800 USD).
Social contributions
Social Security Contributions Paid By Employers: - National Pension: 50% (of total sum based on 9% of the salary)
- Health Insurance: 50% (of total sum based on 0.58% of the salary)
- Employment Insurance: 50% (of unemployment burden 0.9% of the salary) or 100% of employment security business/ occupational ability development business, which are around 0.25~0.85% of the salary
- Industrial Accident Insurance: 100%
Social Security Contributions Paid By Employees: - National Pension: 50% (of total sum based on 9% of the salary)
- Health Insurance: 50% (of total sum based on 0.58% of the salary)
- Employment Insurance: (1) 50% (of unemployment burden 0.9% of the salary). In other word, 0.45% of the salary (2) no other burden.
- Industrial Accident Insurance: 0%

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Social Partners

Social Dialogue and Involvement of Social Partners
The negotiations in Korea are made up on the national level, or the level of industrial sectors or the company level.
Unions
Korean Confederation of Trade Unions (KCTU), which presents around 3429 unions in 2006
Unionization Rate
10,3% in 2006, 10,3% in 2005, 10,6% in 2004 and 11,0% in 2003.
Labor Regulation Bodies
Ministry of Labor

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Last Updates: October 2014