While working on the 2024 Preliminary Startup Package business plan, I ended up digging into a few things I needed to verify in detail, and I found something useful that I wanted to share.
This post introduces benefits available to young prospective founders who are registering a business for the first time in Korea.
Have you thought about which region you want to register your business in? Seoul? Incheon? Busan?
In my case, I wanted to do it in Seoul, but Seoul is part of the overcrowding control zone, so I couldn't receive the full benefits available to first-time founders there.
Of course, registering a business in Seoul has advantages in terms of credibility and infrastructure, but since this is my first time starting out, I thought it would be better to make sure I get all the benefits the government offers.
If you register your business in an overcrowding control zone, you can't receive the tax exemption for youth startup companies.
If you want to check which areas apply, you can look up the overcrowding control zones in the Enforcement Decree of the National Capital Region Planning Act.
This exemption can reduce corporate income tax by up to 100% for 5 years (Seoul gets a 50% reduction), so if you don't have revenue yet it may not matter much, but I still think it's a big advantage to be able to keep more of what you earn later on. I heard it's especially great for people doing online retail arbitrage.
So I considered Incheon or Yongin, which are outside the overcrowding control zone, and I'm planning to register my business in Yongin, which is close to Gaepo-dong Station.
Also, if you're a sole proprietor, this is something you can check later, but if you're planning to incorporate through the corporate establishment system, you can use the estimated incorporation cost calculator to see how much you'll need to pay.
Here too, the amount changes depending on whether the location is in an overcrowding control zone or not.
Once you're ready to register the business, you'll need a business address.
If you're planning to build an app service like I am, you can secure a location such as your home, an office, a virtual office, or a support center and use that as your address.
I didn't research every company that offers virtual office services, but I found Balance Space (24 months, KRW 25,000 per month 👍) and Stage 9 (24 months, KRW 55,000 per month).
According to someone I know, there are also cases where people register offices in the same container-based location, but that didn't feel quite right to me.
I also saw on YouTube that a shared office run by Rodem Tax Corporation also offers virtual office services (KRW 30,000 per month 👍). If you need a space that feels a bit more trustworthy, this also seems like a good option :)
Even if it's a virtual office, you should make sure the service is available in the region you want and that the area is outside the overcrowding control zone. If it doesn't match the conditions you want, it's probably better to consider another option.
Besides these virtual offices, there are also many government support programs that provide local government spaces or offices for free. It's definitely worth looking into them. A good approach is to start with a virtual office, or sign a short-term contract for one and then move later after finding another office.
It really feels like your business registration region and your business address are an inseparable combination.
I hope everyone starts outside the Seoul metro area, succeeds, helps revitalize that region, or eventually moves back up to Seoul! 🙌
