Korea Expansion Agency “KEA”

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Subject #3. Joint Stock Company (Jusik Hoesa) - Navigating Korea's Business Terrain: A Guide to Entity Selection for Foreign Investors [Feb. 2024]

🌐 Continuing Our Journey: The Joint-Stock Company (Jusik Hoesa) - A Vital Entity in Korea's Corporate Landscape. #JointStockCompany #KoreanCorporateInsight

Published: Feb. 2024

Welcome Back to Our Series on Entity Types for Foreign Investors in Korea!

As we continue our insightful series, we've learned about the Liaison Office and examined the Korea Branch entity. Let's delve into the Joint-Stock Company, or 'Jusik Hoesa,' a predominant choice for those seeking a significant and long-term business presence in Korea. Governed by the Korean Commercial Code (KCC), Jusik Hoesa offers flexibility in capital structure and shareholding, with the potential to list on the Korean stock market. #BusinessInKorea #MarketStrategy

Key Characteristics of Joint-Stock Companies (Jusik Hoesa):

  • Company Structure: Jusik Hoesa operates as an independent legal entity, capable of owning assets, incurring liabilities, and engaging in legal proceedings. It is the most widely used entity type in Korea.
  • Capital and Shares: There's no minimum capital requirement for most businesses, but a KRW100 million minimum is necessary for foreign-invested enterprises. Its ability to freely issue and transfer shares makes it a dynamic tool for capital raising and ownership changes. #InvestmentFlexibility #ShareholderDynamics
  • Management: For companies with less than KRW 1 billion in paid-in capital, a single director is enough, whereas larger companies typically establish a board of directors. #EffectiveGovernance
  • Legal Liability: Shareholders' liability is limited to their investment in shares, safeguarding personal assets from corporate debts.
  • Taxation: Corporate earnings are subject to taxation, and dividends to shareholders are also taxed. No difference to a domestic company.

📝Establishing a Joint-Stock Company:

  • Step 1: Securing a Business Address - Fundamental for legal and operational setup.
  • Step 2: Application for Foreign Invested Enterprise (FIE) with a foreign exchange bank in Korea - Initiating formal establishment.
  • Step 3: Capital injection to the foreign exchange bank designated in Step 2.
  • Step 3: District court registry - Completing legal formalities.
  • Step 5: Obtaining a tax identification number - Ensuring compliance with Korean tax regulations. #BusinessSetup #CorporateStrategy
  • Step 6: Complete the FIE registration and receive the FIE certificate from the foreign exchange bank.
  • Director Requirements: For companies with less than KRW 1 billion in paid-in capital, a single director is enough.
  • Statutory Auditor: Mandatory appointment, with exceptions for smaller companies (i.e., paid-in capital less than KRW 1 billion).

📊Auditing and Compliance:

  • Mandatory external audits are required for publicly listed companies or those intending to list soon, and for other companies meeting specific financial criteria (e.g. assets over KRW 12 B, revenue over 10 B, liabilities over KRW 7 B, etc.) #RegulatoryCompliance

Accounting & Taxation Practices:

  • Strict adherence to Korean accounting and tax regulations is essential for the operational success of a Jusik Hoesa. #FinancialCompliance

🔑 In Summary: The Joint-Stock Company stands as a powerful option for foreign investors targeting substantial growth and presence in the Korean market. Its structure is particularly suited for those seeking market expansion or considering public listing.

Comprehensive Support for Establishment & maintenance:

  • For seamless navigation through the establishment and maintenance of your Joint-Stock Company, KEA is here to offer expert support every step of the way, ensuring a straightforward and efficient process for your business in Korea.

🔜 Next in Our Series: We will explore the Limited Company (Yuhan Hoesa), another key player in Korea's diverse business ecosystem. Stay tuned for more valuable insights!

For the latest insights and updates on global business expansion, we invite you to connect with the CEO's LinkedIn profile by clicking on the LinkedIn icon at the bottom of the webpage. We share valuable market insights, trends, and strategies that empower your business journey. Let's engage, learn, and grow together.

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hashtagCorporateExpansion hashtagMarketInsights hashtagFinancialCompliance hashtagRegulatoryCompliance