The Civil Law is the main legal framework to provide for the creation of foundations in Korea. However, there are also other regulations to cover their activities. Also known as non-profit organizations (NPOs) or non-governmental organizations (NGOs), they can take two forms: incorporated and unincorporated.
Below, our company formation agents explain how you can open a foundation in Korea. You can rely on us for support, no matter the form you decide on.
Table of Contents
The Articles of Incorporation – the main document to set up a foundation in Korea
The Articles of Incorporation or the foundation deed is the most important document you need to draw up. It must contain the following information:
- the purpose of the foundation;
- its name;
- the official address, where the headquarters of the foundation is located, as it can also have secondary offices;
- details on how the foundation will be funded and how the funds will be administered;
- the rules on the appointment and removal of directors;
- information on how membership can be obtained;
- regulations on how the foundation can be dissolved.
You can rely on our Korean company formation agents to draft this important document and then help you register the foundation, if you want to proceed to this step.
This document must be accompanied by the following paperwork when setting up a Korean foundation:
- a list of the members who create the foundation;
- their identification papers (in the case of foreign founders, Korean residence permits are accepted).
Following the preparation of all these documents, the founders must obtain authorization from the local authorities to start operating.
A non-incorporated foundation is not required to have these Articles, however, it must abide by specific regulations.
Registered foundation vs. unincorporated foundation in Korea
If you decide to open a foundation in Korea, you also need to consider whether you will register it or not. Registration is an additional step that is completed with the local office of the Trade Register in the city the NGO will carry out its activities. Compared to an unincorporated NPO, the former has the following advantages:
- It can benefit from tax exemptions;
- It can access other financial benefits.
For this, it must also register for taxation in Korea and comply with specific financial reporting requirements. These aspects can be clarified with the help of our accountants in Korea, who can also assist in obtaining all tax benefits your foundation qualifies for.
Activities to be completed by Korean foundations
If you want to set up a foundation in Korea, you should know that it can undertake various activities, most of them related to social welfare. Here are some of them:
- charity;
- art;
- science;
- religion;
- education;
- medical.
If you need support in creating a foundation in South Korea, our local consultants can help you in preparing the necessary documents and file them for registration.
It is also possible for foreigners to establish foundations in Korea. As such, if you want to immigrate to Korea and set up this type of entity, you can rely on us for support in both procedures.
How many non-profit organizations operate in South Korea?
South Korea has an impressive number of non-profit organizations, as according to data for 2024 gathered by Statista.com:
- There were 13,937 NGOs operating in the country, as the number of foundations has steadily increased in the past few years;
- In 2023, however, a slight decline was registered;
- In 2022, there were more than 15,000 NGOs operating in Korea.
If you want to open a foundation in Korea and need support, please contact us. We can also help you open a business in Korea, no matter its type.