Starting a business in South Korea: foreigner's guide (2026)

Cabinet approved a partial amendment to the Enforcement Decree of the Support for Small and Medium Enterprise Establishment Act, allowing companies initially excluded from startup status to gain recognition if the disqualifying condition is resolved within seven years of incorporation. This broadens access to public startup-support programs for a wider range of early-stage companies.

Passed by the National Assembly on 3 July 2025 and proclaimed on 22 July, the amendments extend directors' duty of loyalty expressly to shareholders, raise independent-director requirements to one-third of the board for listed companies, and mandate hybrid (virtual + in-person) shareholder meetings for large firms from 2027—improving transparency for all companies including new entrants.

The Ministry of SMEs and Startups introduced the K-Tech Pass, a streamlined visa and residency scheme for foreign professionals in AI, robotics, and advanced manufacturing. It materially lowers the administrative barrier for international entrepreneurs to establish and co-found companies in South Korea.

South Korea eased inbound investment regulations by simplifying entity-registration procedures for foreign investors and extending stock-exchange trading hours to improve market liquidity. The reforms reduce friction for foreign-owned startups establishing local corporate entities.

The Ministry of SMEs and Startups unveiled 'Startup Korea,' a mid-to-long-term national blueprint targeting a KRW 10 trillion global co-investment fund by 2024, simplified immigration pathways for foreign entrepreneurs, and regional angel-investment hubs. It signals Korea's formal ambition to become a world-leading startup nation.

President Moon Jae-in's government elevated the Small and Medium Business Administration to a dedicated cabinet-level Ministry of SMEs and Startups (MSS), centralising startup policy, public venture funds, and regulatory streamlining under one roof and giving the sector direct representation in government.

NIPA and the government launched the K-Startup Grand Challenge—Asia's first all-expenses-paid government accelerator for overseas startups—providing 40 foreign teams per cohort with incorporation support, mentoring, and seed funding to establish operations in South Korea, directly lowering the practical barrier for foreign founders.

Commercial Code amendments effective April 2012 added the Yuhan Chaegim Hoesa, a flexible LLC modelled on U.S. LLCs that requires no formal board of directors, allows pass-through-style structuring, and grants founders greater management autonomy—reducing incorporation complexity and cost for small technology and professional-services ventures.

A Commercial Act amendment scrapped the KRW 50 million capital floor for joint-stock companies (Chusik Hoesa) and the KRW 10 million floor for limited companies (Yuhan Hoesa); companies can now incorporate with as little as KRW 100. This single change was one of the most significant reductions in the cost of starting a business in Korea's modern history.

Enacted in the immediate aftermath of the 1997 IMF crisis, this act replaced the restrictive pre-approval regime with a notification-based system; it simplified procedures for foreign entrepreneurs to register entities, introduced expanded tax incentives for high-technology investment, and established KOTRA as a one-stop foreign-investor support agency.

Passed on 28 August 1997 and effective 1 October 1997, this act created a certified 'venture business' category for R&D-intensive SMEs, granting certified firms preferential access to venture capital, tax relief, and government procurement. It catalysed Korea's first startup boom and spawned companies such as Naver and NCSoft.