The main private company structures in South Korea are the stock company (chusik hoesa) and the limited company (yuhan hoesa), both formed under the Commercial Act. A stock company is the usual choice for foreign-owned subsidiaries and is registered with the court registry, the tax office and the relevant ministries.

Compliance involves the court registry for company records, the National Tax Service (NTS) for national taxes, local governments for local taxes, the National Pension Service and other insurers for employment, and the Korea Trade-Investment Promotion Agency (KOTRA) and designated banks for foreign investment. For foreign groups, the foreign investment filing under the Foreign Investment Promotion Act (FIPA) and foreign exchange reporting add to the usual corporate duties.

This guide explains the annual cycle for a Korean company, with attention to foreign-owned subsidiaries. Updated November 9, 2026. Tax rates and audit thresholds change through annual tax law revisions, and sources describe the 2026 position differently in places, so confirm figures with the NTS, a Korean certified public accountant or a licensed tax adviser.

Entity compliance South Korea: the quick answer

• File the corporate income tax return and pay the tax within three months after year-end (31 March for a calendar year), with a one month extension available for companies with an external audit.

• Hold an annual shareholders' meeting within three months of year-end for a stock company, where it approves the financial statements, and keep the minutes.

• File VAT returns quarterly, with preliminary and final returns, generally within 25 days after the end of the period.

• Maintain foreign investment records, report changes to the designated bank or KOTRA, and file withholding tax returns monthly.

What determines a company's compliance requirements?

Company form, size, ownership and activity drive the workload. Companies above certain asset, liability or employee thresholds must be audited by an external auditor under the Act on External Audit of Stock Companies. One source puts the asset threshold at KRW 50 billion, while others cite lower or different tests, so check the current criteria and whether your subsidiary meets them.

Tax status also matters. Corporate income tax rates are progressive and the effective rate includes a local income surtax, so the full rate depends on profit level. The fiscal year is usually the calendar year, and a foreign-owned company can choose a different year with notification, although many align with the parent.

Annual entity requirements in South Korea: the core checklist

1. Shareholders' meeting and financial statements

A stock company holds an ordinary general meeting within three months after the end of the fiscal year, where the financial statements are approved. Directors prepare the financial statements under Korean IFRS or the General Accepted Accounting Principles for non-listed companies. Minutes of shareholders' and board meetings should be retained.

2. External audit

Companies subject to the external audit law must have their statements audited by an independent CPA firm, with the audit report issued before the shareholders' meeting. Many foreign subsidiaries are audited even when not required, because parents want group assurance. Auditors are generally appointed with the approval of the audit committee or the board.

3. Corporate tax return

The corporate tax return is due within three months after year-end, which is 31 March for a calendar year. Companies with an external audit can apply for a one month extension of the filing, but tax payment is still due on the original date. A mid-year return and payment is generally required within two months after the end of the first six months, which is 31 August for a calendar year.

4. VAT and withholding

VAT returns are filed quarterly in two parts, a preliminary and a final return per half-year, generally within 25 days of the period end. Withholding taxes on salaries, service fees and dividends are paid by the 10th of the following month, with semi-annual options for small employers. Electronic tax invoices are mandatory for corporations.

5. Registers and registrations

Korean companies must register changes to directors, addresses, capital and articles with the court registry within two weeks to three weeks, depending on the change. Representative directors have personal liability for filing failures. The registry records are public and are used by banks and counterparties for due diligence.

Tax and indirect tax obligations

Corporate income tax rates are progressive, ranging from 10 percent on the first slice of taxable income up to 25 percent on the highest slice, and a local income tax surcharge of 10 percent of the corporate tax is added. Sources differ on whether rates changed for the 2026 tax year, so confirm the brackets used for your tax year.

VAT is 10 percent for most supplies, and exports are zero-rated. Foreign companies providing digital services to Korean consumers must register for VAT. Withholding tax applies to dividends, interest, royalties and service fees paid to non-residents, at domestic rates of 20 percent plus a 10 percent local surtax, often reduced by treaties, which requires a beneficial owner declaration. Korea also has an acquisition tax, property tax and securities transaction tax for relevant transactions, and a global minimum tax regime that may apply to large multinational groups.

Foreign-owned subsidiaries

A foreign-owned company must file a foreign investment declaration with a designated foreign exchange bank or KOTRA before or at the time of share acquisition, and this declaration is the basis for remitting dividends and sale proceeds. Subsequent capital changes, share transfers and loans from the parent must be reported or reflected in the foreign investment registration.

Foreign exchange rules require reporting of certain cross-border loans and services, and the NTS expects transfer pricing documentation for related-party transactions above thresholds. Korea also has anti-tax-avoidance rules, and thin capitalisation limits apply to loans from the foreign parent. Large groups may need to file a GloBE information return in connection with the global minimum tax.

First-year and event-triggered obligations

In the first year, incorporate through the court registry, register with the tax office for a business registration number, open a bank account, obtain foreign investment registration, register for the four major social insurances and appoint auditors where required. Event-driven filings include changes in the representative director, address, capital and share structure, and corporate name.

Liquidation requires a formal process with creditor notification and tax clearance. A dormant company may be deemed dissolved by the court if it fails to register for a long period, so filings should stay current.

Employment and local requirements

Employers must enrol employees in the National Pension Service, National Health Insurance, Employment Insurance and Industrial Accident Compensation Insurance, withhold income tax monthly and complete a year-end settlement in February. The Labour Standards Act sets rules for working hours, overtime, annual leave, severance pay and dismissal, and employees with at least one year of service are generally entitled to severance. Foreign employees need an appropriate visa such as an E-7 or D-8 investor visa, and employers must file reports on foreign worker employment.

Record-keeping and governance in South Korea

Keep the articles, shareholder register, minutes, financial statements, tax returns, VAT and withholding records, foreign investment documents, and registry certificates. Accounting books and supporting documents are generally kept for five years under tax law, and ten years for some records under the Commercial Act. Maintain the company seal and keep a registration of the seal with the court registry, since banks and counterparties rely on it. Keep copies of shareholder agreements, board delegations and bank mandates so that the representative director can show authority at any time.

Build a compliance calendar for South Korea

A compliance calendar turns the rules above into dated tasks with named owners. Start from the financial year-end and the incorporation anniversary, then add the recurring monthly and quarterly items. Review it each quarter, because deadlines, extensions and registry systems change.

• Within two to three weeks of a change: register director, address or capital changes with the court registry.

• 10th of each month: withholding tax payments for salaries, fees and dividends.

• 25 January, 25 April, 25 July and 25 October: VAT returns for the relevant periods.

• Within three months of year-end: shareholders' meeting and corporate tax return, with a possible one month extension for audited companies.

• 31 August for a calendar year: interim corporate tax return.

• February: year-end settlement for employees.

Common mistakes

• Assuming a one month filing extension also extends the payment date.

• Not filing the foreign investment declaration or reflecting capital changes in it before remittances.

• Relying on a single source for the audit threshold without checking the current test.

• Using outdated corporate tax brackets from before the latest tax revisions.

• Paying cross-border fees without withholding tax and treaty beneficial owner forms.

• Letting the representative director's registry details go stale after a handover.

Entity compliance South Korea: frequently asked questions

What is the main private company type in South Korea?

The stock company (chusik hoesa) is the most common structure, particularly for foreign-owned subsidiaries, with the limited company (yuhan hoesa) as an alternative.

When is the Korean corporate tax return due?

Within three months after the fiscal year-end, which is 31 March for a calendar year, with a possible one month extension for companies with an external audit.

Does a Korean subsidiary need an external audit?

Companies above asset, liability or employee thresholds must be audited, and sources cite different thresholds, so confirm the current test for your company.

What is the VAT rate in South Korea?

VAT is 10 percent for most supplies, and returns are filed quarterly.

What is the foreign investment declaration?

A filing with a designated bank or KOTRA that records the foreign shareholding and supports later remittances of dividends and sale proceeds.

Are there local surtaxes on corporate tax?

Yes. A local income tax surcharge of 10 percent of the corporate income tax is added to the national tax.

How CoverPin can help

CoverPin helps finance, legal and operations teams track entity obligations across countries. See our international entities overview, learn about compliance advisory, or browse more guides in our legal and compliance resources.

This article is general information, not legal, tax or accounting advice. Confirm current requirements with the relevant authority or a qualified local adviser before acting.