Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Republic of Korea. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Using "StartBiz", check the availability of trade name and obtain a certificate of name availability, open a bank statement from a bank, file the application package for incorporation and obtain a corporate registration tax bill, register the company and | 3 days | KRW 2,000 |
| * 2 | Make company seal | 1 day | KRW 30,000 |
| * 3 | Pay the corporate registration tax bill. | 1 day (simulteneous with previous procedure) | no charge |
| * 4 | Pay the fees for the certificate of seal impression of incorporation. | 1 day (simulteneous with previous procedure) | 1.2% capital registration tax + education tax ( 20% of the registration tax)+ KRW 10,000 (e-registration form) of Supreme Court stamps |
| * 5 | Pay the fees for the Public Health Insurance Program, the National Pension Fund, Employment Insurance, and Industrial Accident Compensation Insurance | 1 day (simulteneous with previous procedure) | no charge |