South Korea

Operating a business

Different types of companies	Number of partners/shareholders	Maximum and/or minimum capital	Liabilities	Registration fees
Yuhan Hoesa is a Private Limited Company.	Minimum 2 partners. Maximum 50 partners.	10 million won	Liability is limited to the amount contributed.	Lower expenses as compared to a Chusik hoesa.
Chusik hoesa is a Public Limited Company.	Minimum 7 partners on registration, then this number can be reduced to 1.	50 million won	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	Two types of partners: the active partners and the sleeping partner	No minimum capital.	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.	Maximum 2 partners.	No minimum capital.	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.)

The competent organization

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.

Minimum wage: 3,770 won per hour and 30,160 won per day (8-hour day) in 2008
Average wage: Monthly wage is 29,798 KRW in the manufacturing industry and 3,114.9 KRW in the information industries as the end of Sept 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%