- A liaison office supports the parent; it cannot sell or invoice in Korea.
- It is reported to a foreign exchange bank and receives a unique number from the tax office — no court registration.
- It can rent an office and hire staff.
- When sales start, convert it into a branch or a subsidiary.
Many foreign companies come to Korea first as buyers, not sellers: they source components, cosmetics or electronics and need someone on the ground to find suppliers and check quality. For them a full company is more than they need. A liaison office is exactly enough.
What it can do
- Market research and reporting to head office
- Finding, visiting and auditing suppliers
- Quality control of goods bought for the parent
- Supporting the parent’s customers and partners
- Advertising and promoting the parent’s brand
What it cannot do
It cannot earn income in Korea: no sales contracts in its own name, no invoices to Korean customers. The moment Korean revenue appears, the activity belongs in a branch or a subsidiary — and the tax office will see it that way too.
It cannot sell. Everything else it does perfectly well.
How it is set up
Tax
Because it earns no income, a liaison office pays no corporate tax in Korea. It still withholds tax on its employees’ salaries and pays social insurance like any employer.
Questions readers ask
Can a liaison office sign sales contracts in Korea?
No. It cannot earn income in Korea.
Does a liaison office pay corporate tax?
No corporate tax on income, as it earns none; payroll taxes still apply.
Can it employ people?
Yes, for its permitted activities.
How do I switch to selling?
Convert to a branch or set up a Jusik Hoesa.