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Complete Guide: Transferring an Existing Korean Entity to a U.S. Client
This comprehensive guide explains how to transfer an existing Korean limited company (Yuhan Hoesa) from a Korean owner to a U.S. citizen through stock acquisition with a 1,000,000 KRW investment. Updated for 2026 regulations.
Transfer vs. New Incorporation: Key Distinction
You are NOT creating a new company from scratch. Instead, you're acquiring 100% ownership of an already-operating business entity. The company maintains its legal identity, history, and registrations—only the ownership and management change hands.
New Company Incorporation
  • Create company from zero
  • Choose new company name
  • File articles of incorporation
  • Register new entity with courts
  • Obtain new business licenses
Existing Company Transfer
  • Company already exists legally
  • Name and structure remain
  • Transfer stock ownership only
  • Change directors/CEO
  • Update existing registrations
Critical Legal Framework: Your 1M KRW Investment
Understanding which Korean law governs your transaction is essential for compliance. Since your investment is only 1,000,000 KRW (approximately $750-800 USD), it falls below the 100,000,000 KRW threshold required for recognition under the Foreign Investment Promotion Act (FIPA).
What This Means
  • You CAN use the company for normal business activities
  • NOT registered as "Foreign-Invested Company"
  • NOT eligible for FDI tax benefits or incentives
  • Governed by Foreign Exchange Transaction Act instead
Which Law Applies to Your Investment?
The distinction between these two thresholds is crucial for understanding your rights, obligations, and benefits. While you won't receive FDI benefits, your company functions as a legitimate Korean business entity with full operational capabilities.
Understanding Key Korean Business Concepts
Essential terminology explained for those unfamiliar with Korean corporate structures.
1
유한회사 (Yuhan Hoesa)
American Equivalent: Limited Liability Company (LLC). Provides limited liability protection and simpler management structure. Used by global brands like Apple, Google, and Adidas for Korean subsidiaries.
2
인감 (In-gam) - Corporate Seal
American Equivalent: Notarized signature + official stamp combined. A registered stamp that legally binds the company, carrying the same weight as a CEO's signature in the U.S.
3
사업자등록증 (Business Registration)
American Equivalent: Business License + EIN Certificate + Sales Tax Permit combined. Proves your business is registered with the National Tax Service.
4
등기부등본 (Corporate Register)
American Equivalent: Certificate of Good Standing + Articles filed with Secretary of State. Shows the company's legal history, directors, shareholders, and capital structure.
The Four-Phase Transfer Process
Complete ownership transfer typically takes 4-6 weeks from initial agreement to final registration. Each phase builds upon the previous one, creating a systematic path to full ownership.
This structured approach ensures compliance with Korean regulations while protecting your interests throughout the transfer process.
Phase 1: Pre-Transfer Due Diligence & Agreement
Before transferring money or signing anything, conduct thorough investigation of the company you're acquiring. Your Korean liaison should obtain and review comprehensive documentation from the current owner.
Essential Documents
  • Corporate Register Certificate (legal status, ownership history)
  • Business Registration Certificate (tax status)
  • Articles of Incorporation (company bylaws)
  • Shareholder Register (ownership structure)
  • Financial Statements (last 2 years)
Verification Items
  • Tax Payment Certificates (no outstanding debts)
  • List of Assets & Liabilities
  • Existing Contracts (leases, suppliers, employees)
  • Bank Account Statements
Critical Due Diligence Warning

You Inherit Everything
Unlike creating a fresh company, you are inheriting the company's entire history, including all existing debts and obligations, pending lawsuits or legal disputes, tax liabilities (even unknown ones), employee obligations and contracts, and supplier and customer commitments.
Key Purchase Terms to Negotiate
  • Purchase Price: 1,000,000 KRW total
  • Stock Percentage: 100% complete ownership
  • Payment Method: International wire transfer
  • Closing Date: When documents signed and filed
  • CEO Transition: Simultaneous with stock transfer
  • Asset Transfer: Bank accounts, contracts, licenses, intellectual property
Phase 2: Documentation & Power of Attorney
Prepare legal documents in the United States that authorize your Korean liaison to act on your behalf. All documents must be notarized and apostilled before shipping to Korea.
01
Stock Purchase Agreement
Bilingual contract specifying purchase price, shares transferred, payment timeline, warranties, and closing conditions.
02
Power of Attorney
Grants liaison authority to sign documents, update registries, file with tax office, and manage bank accounts on your behalf.
03
Certified Passport Copy
Notarized copy confirming your identity as the foreign investor. Make 3-4 copies since authorities often keep originals.
04
Proof of U.S. Address
Notarized driver's license, utility bill, or bank statement establishing you as a non-resident foreign investor.
Understanding the Apostille Process
What is an Apostille?
An apostille is an international certification under the Hague Convention that makes your U.S. documents legally valid in South Korea. Think of it as an official government stamp that says "this document is authentic."
How to Get It
  1. Have a licensed notary public notarize your documents
  1. Submit notarized documents to your state's Secretary of State office
  1. Pay the apostille fee (usually $10-50 per document)
  1. Receive apostilled documents (typically 1-2 weeks)
Once apostilled, ship all documents to Korea via DHL, FedEx, or UPS with tracking and signature confirmation. Shipping typically costs $50-100 USD and takes 3-5 business days.
Phase 3: Payment, Stock Transfer & Official Filings
Your liaison executes the ownership transfer and updates all government registrations. This phase involves financial transactions, legal filings, and coordination with multiple Korean government agencies.
1
Wire Payment
Transfer 1,000,000 KRW (~$750-800 USD) to seller or company account. Keep wire confirmation receipt.
2
Execute Transfer
Sign Stock Purchase Agreement, handover stock certificates, update shareholder register to show your 100% ownership.
3
File Reports
Submit Non-Resident Securities Acquisition Report (Form 7-32) to designated foreign exchange bank within 60 days.
Securities Transaction Tax & Filing Requirements
0.35%
Tax Rate
Securities Transaction Tax on stock transfers
~$3 USD
Your Tax Amount
KRW (~$3 USD) based on 1M KRW transaction
60
Filing Deadline
Days after signing stock transfer contract
Why File If You're Not "Official FDI"?
Even though your investment doesn't qualify for FDI benefits, Korean foreign exchange law requires reporting all cross-border securities transactions for currency monitoring and economic statistics.
Think of it like the U.S. requiring banks to report large cash deposits—it's for tracking, not taxation or restriction. Filing is same-day with no fee at designated foreign exchange banks.
Update Corporate Registry at District Court
The district court maintains the official corporate registry (등기부). This CRITICAL STEP must be completed to legally transfer ownership and management.
Director Change
Remove Korean seller as director/CEO, add you as new representative director
Shareholder Change
Update ownership from Korean seller to you (100% foreign ownership)
Foreign Ownership Status
Note that company is now foreign-controlled
2-3
Processing Days
Court approval timeline
45,000
Filing Fee (KRW)
Approximately $35-40 USD
Phase 4: Tax Office Updates & Operational Handover
Update tax registration and take control of company operations. This final phase ensures you have full operational control and compliance with Korean tax authorities.
1
Update Bank Account
Remove seller's signing authority, add your representative's authority. Requires in-person visit to bank.
2
Corporate Seal Transfer
Either continue using existing seal or register new seal (recommended for security). New seal costs ~50,000 KRW.
National Tax Service Update
The existing Business Registration Certificate (사업자등록증) must be updated to reflect new ownership and management. File at the district tax office where company is registered.
Processing Time: 1-2 business days
Fee: Free
Operational Handover Checklist
Ensure complete transfer of company control from seller. This comprehensive checklist prevents future disputes and ensures smooth transition.
Corporate Records
  • Original articles of incorporation
  • All board meeting minutes
  • Shareholder registers (physical book)
  • Stock certificates
  • Corporate seal and certificate
Contracts & Agreements
  • Office lease agreement
  • Supplier contracts
  • Customer agreements
  • Employment contracts
  • Insurance policies
Access & Credentials
  • Bank account access
  • Online tax portal login
  • Corporate email accounts
  • Office keys
  • Domain names/website
Financial Records
  • Last 2 years' financial statements
  • Tax return copies
  • Outstanding invoice list
  • Debt/liability documentation
  • Asset inventory
Post-Transfer Ongoing Compliance
After the transfer is complete, you must maintain the company in good standing with Korean authorities. Annual compliance requirements ensure your company remains legally operational.
Corporate Tax Return (Annual)
Deadline: Within 3 months of fiscal year-end. Tax Rate: 10% on first 200M KRW profit, 20% on 200M-20B KRW, 22% above 20B KRW. Must file even if no profit or activity.
VAT Returns (Quarterly/Semi-Annual)
Rate: 10% on goods/services sold. Filing: Every 6 months (or quarterly if revenue exceeds threshold). Required if company engages in sales activities.
Financial Statement Filing
Maintain books in Korean GAAP. External audit required if assets exceed certain threshold. Keep accounting records for 10 years under Korean law.
Business Registration Renewal
Update whenever business details change (address, scope, directors). Must notify tax office within 14 days of changes.
Complete Cost Breakdown
Transparent overview of all expenses in the transfer process. Total estimated cost ranges from 1,500,000-2,000,000 KRW ($1,200-1,600 USD).
Complete Process Timeline
1
Week 1-2: Due Diligence & Agreement
Review company documents, verify tax compliance, negotiate purchase terms, draft Stock Purchase Agreement
2
Week 2-3: U.S. Documentation
Prepare Power of Attorney, notarize all documents, obtain apostilles from Secretary of State, ship documents to Korea
3
Week 4: Payment & Transfer
Wire purchase payment to seller, execute stock transfer agreement, update shareholder register, file securities acquisition report
4
Week 5: Court & Tax Filings
File director change with court, file shareholder change with court, update business registration, receive updated certificates
5
Week 6: Operational Handover
Update bank account signatories, transfer corporate seal, receive all company records, take control of operations
Responsibility Division: Client vs. Liaison
Clear breakdown of who does what in the transfer process ensures smooth execution and prevents confusion.
Your Responsibilities (U.S. Client)
Review company due diligence documents and approve purchase terms
Sign Power of Attorney and Stock Purchase Agreement
Visit U.S. notary for document notarization
Submit documents to Secretary of State for apostille
Wire 1,000,000 KRW to seller or company account
Review and approve final documents
Liaison's Responsibilities (Korean Agent)
Obtain company documents and conduct due diligence review
Draft Stock Purchase Agreement and negotiate with seller
Execute transfer and update shareholder register
File securities acquisition report with bank
File director and shareholder changes with district court
Update business registration and bank account signatories
Ready for Your Korean Venture?
Looking to establish your presence in Korea quickly and securely? Our Korean Entity Transfer service offers immediate access to pre-verified, clean status companies. Avoid the complexities of new incorporation and accelerate your market entry with a trusted partner.