This case involved the establishment of a foreign-invested company in Korea through a 50:50 joint investment by a Hong Kong company and a Korean company, with each investing KRW
The Hong Kong company invested KRW 130 million and acquired a 50% equity interest in the Korean company upon its establishment.
Accordingly, the investment structure satisfied both requirements for foreign investment through the acquisition of shares: (i) a minimum investment of KRW 100 million and (ii) ownership of at least 10% of the voting shares or the total amount of equity contributions. Therefore, the Korean company was eligible for registration as a foreign-invested enterprise.
Procedure for Establishing a Foreign-Invested Company in Korea
Review of Investment Structure
→ Foreign Investment Notification
→ Preparation of Apostille and Certification Documents for the Hong Kong Company
→ Remittance of Overseas Investment Funds and Payment of Domestic Capital
→ Preparation of Proof of Capital Contribution
→ Corporate Registration
→ Business Registration
→ Opening of a Corporate Bank Account
→ Registration as a Foreign-Invested Enterprise
Corporate Investors Require Additional Documentation
In this case, both the Hong Kong company and the Korean company were corporate investors rather than individual investors. Accordingly, more supporting documents and corporate resolutions were required for the establishment of the Korean company than would typically be required for an individual investment.
In particular, for the Hong Kong company to proceed with the incorporation process in Korea through a representative, a power of attorney had to be duly executed and authenticated in Hong Kong. Therefore, accurate guidance from the initial stage of preparing overseas documents was essential.
Overseas Remittance and Capital Contribution Procedures
We also handled the procedures for remitting the Hong Kong company's overseas investment funds and receiving the Korean company's domestic investment funds, as well as preparing the necessary documents evidencing the payment of the capital contribution for the corporate registration.
A structure involving simultaneous investment by a foreign corporation and a Korean corporation requires more extensive review and documentation at the banking and corporate registration stages than a typical single-investor structure. Drawing on its experience in establishing foreign-invested companies, Hwaum Law Office efficiently coordinated the procedures and successfully completed the corporate registration.
From Foreign Corporate Investment to Foreign-Invested Enterprise Registration
Hwaeum Law Office provides comprehensive support throughout the entire process of investment in Korea by foreign corporations, including Hong Kong companies, from foreign investment notification and preparation of apostille documents to remittance of investment funds, corporate registration, and registration as a foreign-invested enterprise.
If you are planning a joint investment by a foreign corporation and a Korean corporation or the establishment of a foreign-invested company in Korea, it is important to review the investment structure and required overseas documents in advance, before remitting the investment funds.
Relevant Laws: Article 2 of the Foreign Investment Promotion Act and Article 2 of the Enforcement Decree of the Foreign Investment Promotion Act