Formal Engagement Letter for Establishing a South Korean Subsidiary
- Roger Pay
- 5 hours ago
- 2 min read
Formal engagement letter based on a specific capital amount (e.g., KRW 100M)
Formal Engagement Letter for Establishing a South Korean Subsidiary
Based on your request, here is a formal engagement framework for establishing a South Korean Subsidiary (Foreign Direct Investment) as of April 2026. This proposal is designed to integrate seamlessly with your existing regional operations in Singapore and Hong Kong.
Engagement Letter: Establishment of South Korean Entity
To: The Board of Directors / Management
Date: April 2, 2026
Subject: Fee Proposal for South Korea Market Entry & Compliance
1. Scope of Phase I: Incorporation & FDI Setup
Bestar Asia will act as the lead consultant for the formation of a Joosik Hoesa (Stock Corporation) with a target capital of KRW 100,000,000.
Service Description | Professional Fee (USD) |
|---|---|
Foreign Investment Declaration | $1,500 |
Mandatory reporting to a designated FX bank under the Foreign Investment Promotion Act. | |
Corporate Incorporation (Court Registry) | $5,000 |
Drafting Articles of Incorporation, appointing directors, and securing the Corporate Seal. | |
Business Registration (NTS) | $800 |
Obtaining the Business Registration Certificate for VAT and tax purposes. | |
Corporate Bank Account Opening | $1,200 |
Assistance with the capital deposit account and conversion to a corporate operating account. | |
Subtotal (Professional Fees) | $8,500 |
Note on Government Taxes: Registration tax in Seoul is typically 1.44% of capital (tripled in "Overconcentration Control Zones"). For KRW 100M capital, expect approximately $3,500 – $4,000 USD in statutory taxes/stamps.
2. Scope of Phase II: Investor Visa (D-8-1)
For foreign executives relocating to manage the Korean entity.
Professional Fee: $3,000 USD (First Applicant).
Deliverables: Preparation of the investment report, dispatch orders, and coordination with the Korean Consulate/Immigration Office.
2026 Update: Includes the mandatory "Proof of Capital Source" audit now required for all D-8 applicants.
3. Scope of Phase III: Ongoing Annual Compliance
To maintain "Audit-Ready" status, we provide a unified monthly retainer.
Service | Frequency | Monthly Fee (USD) |
|---|---|---|
AI-Powered Bookkeeping | Monthly | $550 |
Quarterly VAT Filing | Quarterly | $150 (Avg/mo) |
Corporate Secretary & Registered Office | Annual | $250 (Avg/mo) |
Payroll (up to 5 staff) | Monthly | $200 |
Total Monthly Retainer | $1,150 |
4. Summary of Initial Investment
To initiate the incorporation in Seoul with a D-8 Visa:
Professional Fees (Setup + Visa): $11,500
Government Taxes (Estimate): $4,000
Minimum Capital (Paid-in): $75,000 (KRW 100M)
Total Initial Liquidity Required: ~$90,500 USD
5. Terms of Engagement
Payment Schedule: 50% of Phase I fees due upon signing; 50% upon issuance of the Business Registration Certificate.
Currency: Fees are quoted in USD for regional consistency but may be settled in KRW at the prevailing mid-market rate.
Next Steps for Execution
To proceed, please confirm the following:
Desired Entity Name (We will conduct a Hangeul availability search).
Passport Copy of the proposed Director(s).
Capital Source Proof (A simple bank statement showing the KRW 100M equivalent).
Terms & Next Steps
Formal Engagement Letter for Establishing a South Korean Subsidiary
To maintain your 2026 expansion timeline, we recommend initiating Phase I within the next 5 business days.
To Proceed:
Submit KYB: Provide the Parent Company’s Certificate of Incorporation and Director Passports.
Deposit Capital: We will issue the "Capital Deposit Instructions" for your Korean FX Bank account.
Comments