This step-by-step guide covers everything you need to know about starting a business in South Korea as an expat.
You’ll learn how to increase your chances of success as well as:
- which Visa you need
- what industries to target
- how to get clients
- how to be successful
I’ve been running a company in Korea since 2013.
Here’s how I’ve done it!
Starting a business in South Korea as a foreigner comes with a few surprises that might trip you up.
Fortunately, the South Korean government has been encouraging expats to start businesses since the 1998 Foreign Investment Promotion Act. This created benefits including:
- Guidance from organizations such as Seoul Global Center that even provide office space to those who qualify
- Resources from Invest Korea
- Tax incentives
- Financial support
- Cash grants
There are many great books on starting a business, so I’ll focus on the unique aspects of doing so in South Korea.
How to Start a Business in Korea
- Get the right visa (F or D visa)
- Get help navigating the bureaucracy (Seoul Global Center offers free help)
- Choose the right business organization (private business or corporation)
- Find a niche that’s competitive and unique enough to prevent copycats
- Get clients (set up an affordable WordPress site with Inmotion Hosting, then cold call and network)
- Maintain quality and relationships (have systems in place to replicate success and boost efficiency)
Bonus: learn Korean. Pimsleur will have you speaking Korean comfortably in 90 days.
What it’s like to Start a Business in Korea
I registered a company in October 2013 after living in Korea for seven years.
I was fluent in the language but didn’t have any entrepreneurial experience other than getting suckered into a pyramid scheme in high school.
Working at a Korean company forced me to wear many hats and gave me the confidence I needed to take the plunge.
I did some research on cafes, English academies and translation companies before choosing one that matched my primary aim (location independence, non-customer facing, B2B) and unique value I could provide.
I used my officetel as an office and purchased equipment like computers, desks and phones as well as a logo and website. The total startup costs were $2,000, but could have been lower in hindsight.
At first, I provided every type of translation service I could find clients for. I did SOPs, resumes, cover letters, contracts, and marketing material.
After a while, I was able to narrow things down to the services that paid the most for the least amount of input (client acquisition costs, time per output, etc.)
My business became profitable after 2 months. I grew it by 30% a year in the first five years using the tips below.
I’ve been running my business ever since and spend 20 hours a week maintaining it. This frees me up to pursue other business ventures like this blog, which now generates income.
It even allowed me to slow travel the world for five years before the pandemic.
Korean clients expect fast turnaround times and are somewhat price sensitive (understandable given their workload), but they’re great once you find the right ones. I’ve been working with many of the same clients since 2013.
I’ve only had to fire two clients in seven years and have collected every won owed to me.
Running a business in South Korea has changed my life and opened a new world of opportunities I never would have found elsewhere.
I highly recommend it for long-term expats who are driven and want to decide their own futures.
Step 1. Get the Right Visa
Without the right Visa, you’re going to have a tough time running a business in Korea.
There are two main categories that allow you to start a business, F and D Visas:
F-series Visas (family visas)
1. F-4 Overseas Korean Visa – Have Korean ancestry on at least one side of your family
2. F-6 Marriage Visa – Marry a Korean
3. F-5 Permanent Residence Visa – Live in Korea long enough (over 5 years) and have the necessary points (TOPIK score, income, savings, education level, etc.) to qualify
D-series Investment Visas (money required)
4. D-8-1 Foreign Investment Company Visa – Invest 100 million KRW in a company
Maximum stay: 5 years
5. D-8-3 Unincorporated Enterprise Visa – Invest 300 million KRW in a Korean-run business
Maximum stay: 5 years
D-series Startup Visas (IP required)
6. D-8-2 Business Venture Visa – Establish a venture based on advanced technology (copies of patent card, utility model registration Card, Design Registration Card for Intellectual Property Right Holders) and have it confirmed as a venture according to Article 25
Maximum stay: 2 years
7. D-8-4 Technology and Business Startup Visa – Found a tech company and hold a Bachelor’s Degree. Provide evidence through point-based system (copies of patent card, utility model registration Card, Design Registration Card for Intellectual Property Right Holders) and have it confirmed as a venture according to Article 25
Maximum stay: 2 years
Step 2. Get Help Navigating Korean Bureaucracy
Korean taxes, insurance and banking are different from what you’re used to. These are some of the toughest hurdles to running a successful business in Korea.
I highly recommend getting a local partner, unless your Korean is perfect and your patience abundant. Split profits and losses with them every month, and sign a detailed contract in Korean and English. See a lawyer to make sure it’s ironclad.
It’s also a good idea to learn Korean conversation. You can try Pimsleur here for free!
You can also get assistance from organizations like the Seoul Global Center. They offer help with all these issues.
Failing that, start a collective with a local where you exchange services (for example your English skills for their Korean).
It’s also a good idea to learn:
- Korean business culture
- Korean job titles
- Korean business fashion
- Korean email etiquette
- Korean business card etiquette
- How to answer the phone
Step 3. Choose the Right Business Organization
Once you have a Visa, you can choose any type of incorporation.
The two main types are private business (개인사업자) and corporations (법인사업자).
If you plan on starting small and working alone or with a partner, private business is the way to go.
Main Private Business Types
- General Partnership (합명 회사) – perfect for businesses like a small English academy or Study Room
- Limited Liability Partnership (합자 회사) – the right choice for small Cafes or other places that cater to the general public
If you have a lot of startup capital and plan on hiring employees, corporations will provide better tax structures in the long-run. They make writing off expenses a bit trickier, but will save you money on taxes if your revenue is high.
Main Corporation Types
- Joint Stock Corporation (주식 회사) – Larger companies that have multiple employees but don’t cater to the general public
- Limited Liability Corporation (유한 회사) – Larger companies with multiple employees that cater to the general public
Don’t get hung up on these as you can change them later with a nominal fee.
Step 4. Choose the Right Industry
I believe in the old adage that says, “if you’re competing, you’re losing”.
There’s a strong culture of emulation in South Korea that can lead you astray.
Pick a successful industry with proven demand, but run your business differently.
- Go after underserved segments of the population
- Provide different types of service that only you can
- Reach clients through different channels
Southwest Airlines is a great example of this since it targeted students and the elderly with limited budgets. They tend to travel frequently and are willing to do so with no frills. As a result, it’s one of the only consistently profitable airlines in the world.
If everything is a priority, nothing is. Don’t try to do everything. Specialize in a something only you can do well.
Here some examples of business ideas with a high probability of success:
Study Rooms – English Education has had consistent demand for years. “Study Rooms” (공부방) provide new value propositions and are relatively easy to set up. I actually looked into this when I started a business, but didn’t want to be tied to one location.
A friend of mine earns 10 thousand dollars a month with one of these.
Import/Export – There’s a high demand in Korea for overseas goods and vice versa. I’ve met many expats who excel at this.
English Writing Services – SOPs, legal documents, etc. are always in high demand. Some people I know charge thousands of dollars per document.
Translation Business – Koreans tend to be price sensitive, but are underserved in my experience. There are thousands of documents that need to be translated every day in Korea, so all you need to do is find the right niche.
Step 5. How to Get Clients
This next part can be very different from what works back home. Here are the best methods in order of effectiveness:
- Build your website – A professionally-built website can get expensive and is a hassle to update. A better way is to join Inmotion Hosting and get a free domain name. Then you can build your own site with WordPress. I was able to do this with no background in coding.
- Networking – The best way to find clients in South Korea with its traditional business culture. There are many events you can attend.
- Referrals – I receive a large portion of my business through this method. Incentives like gift certificates have varying rates of effectiveness, so I include a simple message as an email footer asking for one.
- Targeted advertising – Marketing through local online cafes and Facebook Groups works wonders and is free.
- Cold calling – It’s not fun, but can be effective if you can find the right companies to contact.
- CPC – Naver is not usually worth the high price, so Google Ads will be your friend if you’re targeting expats. You can also try KakaoPage, Facebook or LinkedIn.
Step 6. How to Repeat Success
The most important thing to focus on is consistency. Life in Korea can be chaotic, so any business that provides order will have a high chance of success.
My clients know what they’re getting when they request a job from my company, because they control the experience.
I make sure to deliver every file:
- with higher-quality than the previous one
In order to accomplish this, I:
- document all my processes
- divide duties clearly among employees
- train and onboard all staff thoroughly and gradually
- allow extra time for unforeseen events like sickness and interruptions
Moa – Virtual office, coworking space
You can register your business under a Gangnam address, which provides credibility and some tax benefits.
Can I partner with a non-Korean without an F visa outside of Korea?
Yes, but it’s more complicated than a general partnership. There are two main ways to accomplish this:
- Your partner will have to get a D visa (investment).
- You need to incorporate in Korea (법인) and register them as a non-Korean taking office as a co-representative director (공동대표이사) without remuneration. In this case, the non-Korean co-representative director doesn’t need to reside in Korea and is allowed to enter Korea only when necessary for administrative supervision.
If your partner wants to relocate to Korea at some point, they can check out D-10, E-2 or D-8 visas.
Did we miss anything?
Starting a business in South Korea is complicated at first but can be easy to maintain.
Let us know your startup tips or questions in the comments below!
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