Business Administration in South Korea

Overview by Globlatrade.net:

Setting Up a Company

Legal Business Entities

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
Yuhan Hoesa is a Private Limited Company.
 
 
10 million won
Minimum 2 partners. Maximum 50 partners.
 
 
Liability is limited to the amount contributed.
Lower expenses as compared to a Chusik hoesa.
Chusik hoesa is a Public Limited Company.
 
 
50 million won
Minimum 7 partners on registration, then this number can be reduced to 1.
 
 
Liability is limited to the amount contributed.
About 2,4% of the capital in Seoul, Pusan, Taegu and Inchon. For other cities, about 0,48%.
Hapcha Hoeasa is a limited partnership
 
 
No minimum capital.
Two types of partners: the active partners and the sleeping partner
 
 
Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed when they do not take part in the company management.
Lower costs than those for Chusik hoesa.
Hapmyung Hoesa is a general partnership.
 
 
No minimum capital.
Maximum 2 partners.
 
 
Liability is unlimited.
Lower expenses as compared to a Chusik hoesa.
 
Business Setup Procedures
The administrative formalities depend on the structure created (Company, Sole Proprietorship, Branch office, Liaison Office, etc.)

 

More information on Invest Korea and Seoul website.

The Competent Organization
- The Supreme Court
- The Tax office having jurisdiction over the head office
- Invest Korea

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Working Conditions

Legal Weekly Duration
40 (or 44) hours per week.
Retirement Age
No obligatory retirement age. In major companies, the retirement ages is 54 or 56,4. But in labor market, the Korean employees are working up to 67~68.
Working Contracts
In Korea, the contract determines if the employee is part of the regular or non-regular staff. Permanent employees form the regular staff. Among the non-regular staff, there are different types of contract: part-time workers, temporary workers, dispatched workers, fixed-term contract workers, entrusted employees.

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Cost of Labor

Minimum Wage
3,770 won per hour and 30,160 won per day (8-hour day) in 2008
Average Wage
Average monthly gross earnings in South Korea was KRW 3,551,046 (2,800 USD) in 2007.
Social contributions
Social Security Contributions Paid By Employers: - National Pension: 50% (of total sum based on 9% of the salary)
- Health Insurance: 50% (of total sum based on 0.58% of the salary)
- Employment Insurance: 50% (of unemployment burden 0.9% of the salary) or 100% of employment security business/ occupational ability development business, which are around 0.25~0.85% of the salary
- Industrial Accident Insurance: 100%
Social Security Contributions Paid By Employees: - National Pension: 50% (of total sum based on 9% of the salary)
- Health Insurance: 50% (of total sum based on 0.58% of the salary)
- Employment Insurance: (1) 50% (of unemployment burden 0.9% of the salary). In other word, 0.45% of the salary (2) no other burden.
- Industrial Accident Insurance: 0%

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Social Partners

Social Dialogue and Involvement of Social Partners
The negociations in Korea are made up on the national level, or the level of industrial sectors or the company level.
Unions
Korean Confederation of Trade Unions (KCTU), which presents around 3429 unions in 2006
Federation of Korean Trade Unions (FKTU) which presents around 1,143 unions 2006
Unionization Rate
10,3% in 2006, 10,3% in 2005, 10,6% in 2004 and 11,0% in 2003.
Labor Regulation Bodies
Ministry of Labor

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