General Comparison
The general comparison between a subsidiary, a branch and a liaison office

Difference in taxability and other mattes between the operation through a liaison office, a branch and a subsidiary (or a joint venture) are summarized as follows: 

  Liaison office Branch Subsidiary
1. Scope of Business
Limited to auxiliary and preparatory activities only Limited to activities approved by or reported to the Bank of Korea Activities stipulated in the Articles of Incorporation, subject to approval by the Minister of Finance
2. Governing law for establishment
Foreign Exchange Control Act Foreign Exchange Control Act Foreign Investment Promotion Act
3. Minimum foreign capital requirement
None None 100,000,000(In Korea Won) each
4. Remittance of profits and investments

Remittance of profits after Branch Tax is allowed on approval by the Foreign Exchange Bank

Audit report may be required.
Remittance of profits is guaranteed by FIPA, but subject to withholding taxes 10% on gross dividends per tax treaty

Remittance of net assets at the time of closing of branch is allowed on approval by the Bank of Korea

Audit report is required.
Remittance of investment is guaranteed by FIPA, and capital gain, if any, is subject to withholding taxes of 10.75% of the gross payment or 26.875% of the capital gain, which ever is lower.
In both cases above, no withholding taxes on repatriation.
- The amount of foreign direct investment shall be KRW100 million. If two or more foreign nationals make a joint investment, each has to make an investment of at least KRW100 million
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