- Four routes in: a Korean importer, a liaison office, a branch of the Pty Ltd under Article 614 of the Commercial Act, or a Korean subsidiary — usually a Jusik Hoesa.
- Australian company documents — an ASIC extract, the constitution or a statement that the company runs on the replaceable rules, a directors’ resolution and a power of attorney executed under s 127 of the Corporations Act — are notarised and then apostilled by DFAT.
- Under KAFTA, in force since 12 December 2014, most Australian goods already enter Korea duty-free; Korea’s 40% beef tariff reaches zero on 1 January 2028.
- The 1982 Australia–Korea treaty caps Korean withholding at 15% on dividends, interest and royalties — with no lower rate for a parent company.
- An Australian company holding 10% or more receives the Korean dividend as non-assessable non-exempt income under s 768-5 ITAA 1997, so the Korean 15% cannot be credited and the money reaches Australian shareholders unfranked.
Australian companies come to Korea along several roads. A Queensland beef exporter wants its own cold chain in Seoul as the KAFTA tariff falls; a Perth mining-services firm follows Korean steelmakers and battery makers that buy Australian ore and lithium; a Barossa winery outgrows its importer; a Melbourne software company finds that Korean enterprises pay well and pay on time; a Sydney education provider recruits in a country that sends thousands of students south every year. Each faces the same question: how much presence in Korea, and in what legal form.
This guide sets out the options, the Korean statutes behind each, the Australian documents a Korean registry and bank will ask for, the trade agreement, the tax treaty, Australian tax on Korean profits, visas and staff. Australian terms appear in italics; Korean terms in Hangul with romanisation.
The Australia–Korea framework
Trade runs on the Korea–Australia Free Trade Agreement (한-호주 자유무역협정, han-hoju jayu muyeok hyeopjeong), known in Canberra as KAFTA, which entered into force on 12 December 2014. Tariff cuts began on 1 January 2015 and continue in annual steps until 1 January 2032. Wine, wheat, raw sugar, LNG and pharmaceuticals entered duty-free from the start; beef, the headline item, carried a 40% tariff that falls to zero on 1 January 2028. KAFTA also opened Korean legal and accounting services to Australian firms and raised the Australian screening threshold for private Korean investors — useful when the Korean side later invests back.
Tax relations are governed by the Agreement between Australia and the Republic of Korea for the avoidance of double taxation, signed in Canberra on 12 July 1982 and in force since 1 January 1984. It is one of Korea’s older treaties and it shows: a flat 15% ceiling on dividends, interest and royalties, with none of the reduced parent-company rates Korea agreed with the United Kingdom or China. Both countries have applied the OECD Multilateral Instrument to it, so since 1 January 2021 Korean withholding relief is subject to a principal purpose test. Both are parties to the Hague Apostille Convention, and the two governments describe the relationship as a comprehensive strategic partnership, with critical minerals, hydrogen and defence at its centre.
Four ways in
1. A Korean importer or distributor
The usual first step for food, wine and consumer goods, and the only one that needs no Korean entity. The importer holds the import licence, the food registrations and the customer relationship. An agent in Korea who habitually concludes contracts for the Australian company can create a permanent establishment (국내사업장, gungnae saeopjang) under Article 94 of the Corporate Tax Act and Article 5 of the treaty, so keep distribution contracts as buy-and-resell rather than agency. Register your trademark in Korea before signing; see trademark registration in Korea.
2. A liaison office
A liaison office (연락사무소, yeollak samuso) lets the Pty Ltd place staff in Korea for research, promotion and support, reported to a foreign exchange bank under the Foreign Exchange Transactions Act, with no Korean income. Mining-services and education businesses often start here. See liaison offices.
3. A branch
A branch is the Australian company itself registered in Korea under Article 614 of the Commercial Act. It trades and employs; the parent is liable for everything; and every change ASIC records — directors, address, name — must be mirrored in Seoul with apostilled documents. The Australian tax result can be attractive, because active foreign branch profits of an Australian company are generally non-assessable non-exempt income under section 23AH of the Income Tax Assessment Act 1936. See branch or subsidiary.
4. A Korean subsidiary
Most Australian businesses that intend to stay form a Jusik Hoesa (주식회사, jusik hoesa): the closest thing Korea has to a proprietary company limited by shares, with one shareholder and one director enough. With capital of at least KRW 100 million the company is registered as a foreign investment under the Foreign Investment Promotion Act, which opens the D-8 visa for the investor-director. No minimum capital is required otherwise; see do you need KRW 100 million?.
Company documents from Australia
| Document | Australian name | Korean | Treatment |
|---|---|---|---|
| Registry extract showing directors, secretary and shareholders | ASIC current and historical company extract | 법인등기부에 해당하는 서류 | Recent; notarised, then apostilled by DFAT |
| Certificate of incorporation | Certificate of registration (ACN) | 설립증명서 | Certified copy; apostille |
| Articles | Constitution — or a statement that the replaceable rules apply | 정관 | Certified copy; apostille |
| Decision to invest in Korea | Directors’ resolution or sole director’s written resolution | 이사회 의사록 | Signed, notarised; apostille |
| Power of attorney to the Korean agent | Power of attorney executed under s 127 | 위임장 | Notarised; apostille |
| Beneficial owners | Register of members and ownership chart | 실제소유자 확인 자료 | For the bank’s AML checks |
Typical documents for an Australian corporate shareholder.
Two Australian habits surprise a Korean registry. First, many proprietary companies have no constitution at all and run on the replaceable rules (ss 134–141 Corporations Act 2001). A Korean registrar asked to file the parent’s articles needs something on paper, so we prepare a short directors’ certificate that the company is governed by the replaceable rules, with the relevant rules attached, notarised and apostilled. Second, Australian companies execute documents without a seal under section 127 of the Corporations Act 2001 — two directors, a director and a company secretary, or the sole director who is also secretary. The power of attorney should show that signing block, so the Korean agent’s authority traces back to people recorded at ASIC.
Ask for a power of attorney in English that lists each Korean act: the foreign investment notification, subscription for shares, court and tax registration, bank accounts and registration of the company seal. Korean bodies generally expect the ASIC extract to be no more than three months old at filing.
Personal documents from Australia
| Document | Australian issuer | Used for | Treatment |
|---|---|---|---|
| Passport | Australian Passport Office | Registry, bank, visa | Certified copy by a notary; apostille. Original shown in Korea |
| Criminal record check | Australian Federal Police — National Police Check | D-8 and other long-term visas | Apostille by DFAT |
| Birth and marriage certificates | State or territory Registry of Births, Deaths and Marriages | Dependants’ visas | Apostille by DFAT |
| Director’s signature | Notary public | Korean registry, in place of a seal certificate | Notarised; apostille |
| Tax residence certificate | Australian Taxation Office | Treaty rates on Korean income | Requested from the ATO |
Typical personal documents for a shareholder-director moving to Korea.
Korean directors file a seal certificate (인감증명서, ingam jeungmyeongseo); an Australian director instead signs before a notary public, and the notarised signature, once apostilled, serves the same purpose. The AFP check for a visa should be requested for immigration purposes and is apostilled in its original form.
The apostille in Australia
Australia has one apostille authority: the Department of Foreign Affairs and Trade (DFAT), through its office in Canberra, state offices and, abroad, Australian embassies. The rule that saves time is simple. DFAT apostilles public documents — an AFP check, a birth certificate, a notary’s signature. It does not apostille a company’s own resolution or a power of attorney directly. Those go to a notary public first; DFAT then apostilles the notary’s signature. ASIC extracts are usually handled the same way, certified by a notary and then apostilled.
DFAT does not issue digital apostilles: the certificate is attached to paper, and Korean registries want paper originals. Allow one to two weeks in Australia, plus courier time to Seoul. Documents arrive in English; Korean authorities need Korean translations, which we arrange in Seoul. Our guide to apostilles for Korea covers the general rules.
Company papers go to the notary, the notary goes to DFAT, and DFAT goes on paper. Plan for the courier, not the email.
Voixa Korea
Setting up the Korean company
On the Korean side the process is the one every foreign investor follows. The investment is notified to a Korean foreign exchange bank under Article 5 of the Foreign Investment Promotion Act; the capital is wired from the Pty Ltd’s own account in Australian or US dollars and the bank certifies receipt. Australia needs no approval for outbound investment — the Foreign Investment Review Board looks only at money coming in — and the Australian bank reports the transfer to AUSTRAC as a matter of course. The Korean company is then registered with the court and obtains its business registration number (사업자등록번호, saeopja deungnok beonho) from the tax office. With documents ready, the Korean part takes two to four weeks.
Korean directors serve terms of up to three years under Article 383 of the Commercial Act and must be re-registered on renewal — a contrast with the open-ended appointment of an Australian director — and the company registers a corporate seal (법인인감, beobin ingam). The Korean financial year can match the Australian one ending 30 June, which keeps group reporting simple. Our guide to annual compliance sets out the recurring obligations.
Trading under KAFTA
Australian goods qualify for preferential duty in Korea if they meet KAFTA’s product-specific rules of origin and the importer holds a certificate of origin. Under KAFTA the certificate can be completed by the exporter or producer itself or issued by an authorised body such as a chamber of commerce. The Korean importer claims the preferential rate under the FTA Customs Act and must be able to support origin if Korean customs verifies it later, so keep the bill of materials and supplier declarations for at least five years.
Beef deserves its own paragraph. Korea’s tariff on Australian beef started at 40% and has been cut every 1 January since 2015, reaching zero on 1 January 2028; until then a volume-triggered safeguard can raise it temporarily in a year when imports run high. Food and wine face Korean product rules on top of duty: foreign food plants must be registered with the Ministry of Food and Drug Safety under the Special Act on Imported Food Safety Control, meat must meet Korean import health requirements, labels must be in Korean, and alcohol is imported under a liquor import licence. See importing into Korea and customs duties.
Korean tax and the 1982 treaty
The Korean subsidiary pays corporate tax at 10% to 25% plus local income tax of one-tenth under Article 55 of the Corporate Tax Act — 11% on the first KRW 200 million — and charges 10% VAT. Payments to Australia bear Korean withholding, reduced by the treaty:
| Payment from Korea to Australia | Korean domestic rate | Treaty rate | Condition |
|---|---|---|---|
| Dividends | 22% | 15% | Any holding — no lower rate for a parent company |
| Interest | 22% | 15% | 0% for governments, central banks and similar bodies |
| Royalties | 22% | 15% | |
| Service fees | Usually none | Business profits article | No Korean tax without a permanent establishment |
Domestic rates include Korean local income tax. Source: PwC Worldwide Tax Summaries, Korea, 2026; ATO synthesised text of the Australia–Korea convention.
To claim 15% rather than 22%, the Australian recipient files a limited tax rate application (제한세율 적용신청서, jehan seyul jeogyong sincheongseo) with the Korean payer before payment under Article 98-6 of the Corporate Tax Act, supported by an ATO certificate of residency. Without it, 22% is withheld and a refund claim follows. Our guide to dividend withholding covers the procedure.
The flat 15% invites a familiar idea: hold the Korean company through Singapore or the Netherlands to reach a lower rate. Korea’s beneficial-owner rules and the treaty’s principal purpose test exist to defeat exactly that, and a holding company with no people and no decisions will not pass. If a group already has a real regional hub, the question is worth asking; if not, the 15% is the price of the route.
Australian tax on Korean profits
An Australian company that holds at least 10% of the Korean company receives its dividends as non-assessable non-exempt income under section 768-5 of the Income Tax Assessment Act 1997. No Australian tax is due on the dividend — but because it is not assessable, no foreign income tax offset is available for the Korean 15% either. That 15% is therefore a final cost, which is why getting the treaty forms right matters: missing them turns a 15% cost into 22%.
The second consequence is less obvious. The Korean profits have been taxed in Korea, not in Australia, so they generate no franking credits. When the Pty Ltd pays them on to its own shareholders, the dividends go out unfranked, and Australian-resident shareholders pay full personal tax on them. For a founder-owned group the effective burden on Korean profits brought all the way home is Korean corporate tax, plus 15% Korean withholding, plus Australian personal tax with no credit for either. Foreign shareholders of the Pty Ltd can receive the same profits free of Australian dividend withholding under the conduit foreign income rules.
Australia’s controlled foreign company (CFC) rules in Part X of the Income Tax Assessment Act 1936 also apply. Korea is not one of the seven listed countries — Canada, France, Germany, Japan, New Zealand, the United Kingdom and the United States — so a Korean subsidiary controlled from Australia is an unlisted-country CFC. A trading or service business normally passes the active income test, which requires tainted income below 5% of gross turnover; a Korean company that mainly earns interest, rent or royalties may not, and its passive income is then taxed in Australia each year.
Transactions between the Pty Ltd and the Korean company — management fees, software licences, goods sold to the Korean distributor — must be at arm’s length in both countries: under Subdivision 815-B of the Income Tax Assessment Act 1997 in Australia, and under Article 8 of the Adjustment of International Taxes Act in Korea. A short intercompany agreement and a benchmark on file avoid most arguments.
Staff and visas
Australians can visit Korea for business meetings for up to 90 days without a visa, subject to Korea’s electronic travel authorisation rules at the time of travel. Working in Korea requires a visa under the Immigration Act. An Australian shareholder-director investing at least KRW 100 million and managing the company applies for the D-8 corporate investment visa (기업투자 비자, gieop tuja bija) with the AFP check and family certificates; see D-8 requirements. Employees seconded from Australia usually come on a D-7 or E-7 visa. Australians aged 18 to 30 can also spend up to 12 months in Korea on the H-1 working holiday visa, with no annual cap — a route many Australian businesses use to find their first Korean-speaking hires in reverse.
Australia and Korea have had a social security agreement since 1 October 2008. An employee seconded from Australia with a certificate of coverage from the ATO can stay in the Australian superannuation guarantee system and be exempt from the Korean National Pension for up to five years. Korean health insurance still applies. Local staff are employed under the Labour Standards Act, with written terms, the national minimum wage, four social insurances and severance after one year. See hiring in Korea.
Australian support for the move
- Austrade runs the Australian Trade and Investment Commission office in Seoul, market briefings and trade missions.
- Export Finance Australia provides loans, guarantees and bonds for exporters and their overseas operations.
- Export Market Development Grants partly reimburse eligible marketing spend in overseas markets.
- The Australia–Korea Business Council and the Australian Chamber of Commerce in Korea connect Australian businesses with each other and with Korean partners.
Protect the brand
Korea is a first-to-file (선출원주의, seonchurwonjuui) trademark system under Article 35 of the Trademark Act. An Australian brand that exhibits at a Seoul fair or appoints a distributor before filing sometimes finds its name registered by someone else. Extend your Australian mark through the Madrid system via IP Australia or file directly with KIPO, and consider a Hangul version of the name. See trademark registration in Korea.
A worked example
Southbank Systems Pty Ltd, a Melbourne developer of mine-site scheduling software, has two Korean customers among the steel and battery groups that buy Australian ore. It forms a Seoul Jusik Hoesa with KRW 150 million of capital, notified as a foreign investment, and a 30 June year end. Its constitution, ASIC extract and a directors’ resolution signed under s 127 are notarised in Melbourne and apostilled by DFAT; its brand is filed with KIPO in Latin letters and Hangul. A co-founder moves to Seoul on a D-8 visa as representative director, and a support engineer follows on a certificate of coverage, staying in Australian super.
The Korean company licenses the software from the Pty Ltd under an intercompany agreement at a benchmarked royalty, with 15% Korean withholding after the treaty forms are filed. In year three it makes KRW 300 million of profit, pays KRW 44 million of Korean corporate tax including local tax, and pays a KRW 200 million dividend with KRW 30 million of Korean withholding. In Melbourne the dividend is non-assessable under s 768-5. When Southbank passes it on to its founders, it goes out unfranked — which is why the founders are now comparing the dividend with a larger royalty or retaining profit in Korea for the next hire.
Mistakes we see
- No constitution and no explanation — a Korean registrar asked for articles receives nothing.
- A power of attorney signed by one director of a company with two, without the s 127 signing block.
- Company documents sent straight to DFAT without a notary.
- Expecting a digital apostille and planning no time for the courier.
- No ATO certificate of residency before the first dividend or royalty — 22% instead of 15%.
- Forgetting the franking effect when modelling what Korean profits are worth to Australian shareholders.
- Announcing Korea before filing the trademark.
Korean terms you will meet
Australian terms you will meet
Questions readers ask
Can an Australian company set up a subsidiary in South Korea?
Yes. An Australian Pty Ltd can own 100% of a Korean Jusik Hoesa in most sectors. With at least KRW 100 million of capital it is registered as a foreign investment.
Which Australian documents are needed?
Usually a recent ASIC extract, the certificate of registration, the constitution or a statement that the replaceable rules apply, a directors’ resolution and a power of attorney executed under s 127, all notarised and apostilled by DFAT.
Who issues apostilles in Australia?
The Department of Foreign Affairs and Trade. Company documents are first certified or notarised by a notary public; DFAT then apostilles the notary’s signature. DFAT does not issue digital apostilles.
What is the dividend withholding rate from Korea to Australia?
15% under the 1982 treaty, whatever the size of the holding, if the treaty forms are filed before payment. Without them, 22%.
Are Korean dividends taxed in Australia?
For an Australian company holding at least 10%, they are non-assessable non-exempt income under s 768-5 ITAA 1997, but the Korean withholding cannot be credited and onward dividends are unfranked. Individuals are taxed with a foreign income tax offset.
Does Australian beef enter Korea duty-free?
Not yet. The 40% tariff is being cut every year under KAFTA and reaches zero on 1 January 2028. Wine, wheat, raw sugar and LNG are already duty-free.
Can an Australian director live in Korea?
Yes, on a D-8 investor visa after investing at least KRW 100 million, or on a D-7 or E-7 visa as a seconded or professional employee.
- PwC Worldwide Tax Summaries — Korea, withholding taxes (Australia row)
- ATO — synthesised text of the MLI and the Australia–Korea convention
- DFAT — KAFTA outcomes at a glance
- DFAT — KAFTA implementation timeline
- ATO — Taxation of foreign dividends (s 768-5)
- ATO — Bilateral social security agreements
- Consulate General of Korea in Sydney — Working holiday in Korea
- Commercial Act (상법)
- Corporate Tax Act (법인세법)
- Foreign Investment Promotion Act (외국인투자 촉진법)
Alexander Baranov
Founder of the BCA Group · cross-border corporate and tax adviser since 2008
Alexander advises foreign founders and groups on company formation, tax structuring and corporate law in more than 40 jurisdictions across Europe, the Gulf, Asia and Latin America. He is the author of nine books on international business and tax and writes regularly for professional finance and tax journals. He works in English, German, Spanish and Russian.
This guide is based on the Korean statutes cited in the text and on our own filings. It is reviewed when the law or official rates change.