The South Korean business environment has its own distinctive features. Foreign companies wishing to enter this market often do not fully understand the steps they need to take before making their first sale.

Obtaining a business registration certificate in South Korea (사업자등록증) is fairly straightforward. However, this is merely a gateway into the system, where each subsequent step requires a separate document, a separate procedure and, more often than not, knowledge of the Korean language. Without an e-commerce licence, you will not be able to sell online. Without a corporate bank account, you cannot accept payments. HLTS Co. Ltd supports foreign businesses in the South Korean market, and in this article we will outline all the steps you’ll need to take and the pitfalls that may catch you out.

The experts at HLTS South Korea remind you that, before registering a business, a foreign national must obtain a visa.

• Step 1. Visa: this depends on the business model and the amount of investment. For e-commerce, the corporate investor visa (D-8) or one of the F-category visas (F-2, F-4, F-5, F-6) is most commonly used. The D-8-4 (OASIS) start-up visa is suitable for those launching a business based on technology or innovative ideas.
• Step 2. Type of company, which depends on the visa, scale of operations and tax burden. The simplest option for those holding an F-category visa is to register as a sole trader (사업자). For foreign entrepreneurs, this could be: 주식회사 (a corporation, equivalent to a public limited company, suitable for those planning to attract investment and scale up) or 유한회사 (a limited liability company, LLC - for small and medium-sized businesses where management flexibility is important).
• Step 3. Registration: a notification of foreign investment is submitted via Invest Korea (KOTRA), after which the business is registered with the National Tax Service (NTS) or online via Hometax (홈택스).

An entrepreneur obtains a business certificate, lists their products - and then discovers that Coupang, Gmarket or Naver Shopping require a different document. You need a distance selling licence - 통신판매업 신고증. Without it, you cannot sell online, advertise on Naver Ads or register as a seller on marketplaces, as experts at HLTS company point out. This is a requirement under the Act on the Protection of Consumers in E-commerce.

To obtain the licence, you need two documents: a business certificate and a safe shopping certificate (구매안전서비스 이용확인증). The second is issued by the platform on which you plan to sell. The licence is processed at the district office (구첩) where your business is registered, or online via the government portal. You can submit your application via the gov.kr portal.

Without a corporate bank account, it is impossible to receive payments from marketplaces, pay taxes or settle accounts with suppliers. However, opening one as a foreigner in South Korea is a challenge in itself. Not every bank deals with foreigners, according to experts at HLTS Company. Nor do all of them provide services in English. Verification must be carried out in person, by visiting a branch.

Basic set of documents: passport, Alien Registration Card (ARC, 외국인등록증), business certificate, office lease agreement. Some banks additionally require a contract with a supplier, a personal bank statement or a business plan.

If you do not speak Korean, the presence of an interpreter during your visit to the bank is effectively mandatory. HLTS Ltd, as a local partner, handles all these matters in consultation with the client - a business wishing to operate in the South Korean market.

The documents have been gathered, the bank account opened, and the licence obtained. It would seem that you’re ready to start selling. However, each marketplace has its own entry requirements.

To register on most platforms (Coupang, Naver Smart Store, Gmarket), a foreign seller will need to provide: a South Korean business registration number, a bank account, a verified address and a website in Korean with the relevant business information in the footer.

During verification, the system may request proof of identity and block the account if a foreign phone number or a VPN is used, or if the documents do not match. This is part of the national data protection system and cannot be circumvented, according to experts at HLTS South Korea.

The South Korean tax system operates on a strict schedule. VAT (부가가치세) must be declared every three months for corporations and every six months for sole traders. The annual return is due by 31 March. Electronic invoices are mandatory. All reporting is done via Hometax - the interface, forms and notifications are in Korean only. Corporation tax rates are published on the NTS website and are reviewed periodically.

Payments are a different matter altogether. E-commerce in South Korea revolves around mobile wallets: Naver Pay, Kakao Pay, Samsung Pay and Toss. Not cards. If a shop does not support these, customers will abandon their purchase at the payment stage. When operating via marketplaces, payments are processed by the platform. If you’re selling via your own website, you’ll need a payment provider compatible with Korean e-wallets.

If you’re planning to start a business or organise the supply of goods from South Korea, the specialists at HLTS Co. Ltd can help you understand the specifics of the local market, prepare the necessary documentation and find reliable partners amongst Korean manufacturers and suppliers.