Korea’s 4 Major Insurances stand out distinctly from those of other countries, presenting numerous distinctive features. In this article, we aim to delve into the specifics of the Korean National Health Insurance within the 4 Major Insurances, highlighting its unique aspects. I. Brief Introduction of Korean National Health Insurance for Employees Mandatory Enrollment and National […]
Author Archives: koreantaxexpert
Closing a business entity in South Korea, whether it’s a domestic corporation or a foreign branch office, involves a series of legal and administrative steps. This blog post provides an overview of the corporate dissolution and liquidation process in South Korea, outlining the key steps and requirements. 1. Board Resolution: The first step in […]
In the dynamic world of global business, cross-border mobility of employees has become a norm. Many companies send their employees abroad on assignments, and South Korea is no exception. For foreign employees stationed in Korea, one common practice is the adoption of NET payment contracts. Let’s delve into the concept of NET payment contracts and […]
In South Korea, companies are required to undergo external audits to enhance transparency and ensure responsible management practices. External audits involve an independent review of a company’s financial condition and operational activities, with the audit report prepared in accordance with the External Audit Act. This blog explores the criteria for companies subject to external audit […]
Introduction: Foreign Direct Investment (FDI) plays a pivotal role in fueling South Korea’s economic growth and development. In recent years, the Korean government has actively promoted and facilitated FDI to attract foreign capital and expertise. Whether you are considering investing in South Korea or establishing a business here, understanding the FDI regulations is paramount. This […]
Introduction: In South Korea, the tax settlement process for resigned employees involves several important steps. While specific details may vary, for the purpose of this blog, let’s assume that the employee’s salary and bonuses have been finalized. This article will cover the key aspects of the tax settlement process that every resigning employee should be […]
I have been working as a USCPA in Korea for over 15 years, primarily assisting foreign companies looking to start businesses in Korea. After assisting with the establishment of their corporations, I provide advisory services and various compliance services, including tax reporting within Korea. I would like to offer some brief advice on a few […]
In Korea, there are strict regulations regarding the payment of severance pay when an employee leaves after a certain period of employment. Severance pay is generally calculated as 30 days of average wages for employees who have worked for one year or more. While this concept is familiar to most employees in Korea, foreign companies […]
When processing employee termination in Korea, there are several essential steps that need to be confirmed and followed. Sometimes, there are processes specific to Korea that may be unfamiliar to foreigners or foreign companies. Please note the following: Notice Period: Verify the notice period required for employee termination according to the Employment Contract (“EC”). This […]
VAT Korea Refund In the global economy, international trade in goods & services have expanded to become essential to daily life. It has become common to make purchases and use popular global apps in South Korea. However, such goods or services from overseas suppliers do not include VAT, which creates an unequal playing field for […]
A tax is imposed on net taxable income in Korea by the district tax office, and cities (or “gu” for large cities). In Korea, a tax payable to the district tax office is called “income” tax (소득세). A tax payable to cities is called “resident” tax (지방세). For most of cases, 10% resident tax will […]
South Korea’s payroll system When an employee is hired, he/she will receive monthly salary payments that will have taxes deducted from. Employees must pay income/resident taxes from their salary along with mandatory social insurance programs that employees need to be enrolled into immediately upon being hired. Withholding Income & Resident Taxes Plus Benefit Deductions Income/resident […]
There’re 4 major social insurances in Korea for all employees to be enrolled: 1) national pension, 2) national health insurance and long-term care insurance, 3) employment insurance and 4) workers’ compensation insurance. Each year, some of the insurance rates are increased or adjusted. Following rates are applicable for 2023. Item Employee Employer TOTAL RATE Expected […]
Business in Korea | Company types Foreign investments are categorized by type for doing business in Korea. Mostly, foreigners can start Korean business by acquiring new or existing stocks, or by establishing a Korean branch or liaison office in Korea. Governing laws are different for the cases. Foreign Direct Invested (FDI) companies are domestic corporations […]
Can foreigners hire Korean employees remotely? Yes, any foreigners or foreign companies can hire Korean national employees from overseas. Many foreigners or foreign companies I’ve met are worried about the Korean labor environment and hesitate to set up a company in Korea. For certain cases, Koreans can be directly employed by any foreigners and work […]