Individual business registration, application, and procedures
개인사업자 등록 및 신청
Individual business registration, application, and procedures
The number of individual business owners in Korea is over 7 million and is on the rise. The individual business registration process and application method can be done with simple document 
submission both online and offline. Learn about the necessary documents and procedures for individual business registration, including tax issues you need to know before business registration, and learn how to register a business that is right for you.
– index –
1. Matters to be checked before registering as an individual business.
2. Sole proprietorship registration process.
3. Sole proprietorship application documents.
4. Self-registration of sole proprietorship.
1. Matters to check before registering as an individual business
Before registering as an individual entrepreneur, it is necessary to first verify the taxable person. The Korean tax system operates a simplified taxpayer to provide tax benefits to small businesses. Simplified taxpayers are those whose sales in the previous year are less than KRW 48 million, and individual entrepreneurs who start their business for the first time can be registered as simplified taxpayers because they have no sales in the previous year.
It is stipulated that a person registered as a simplified taxpayer from an individual entrepreneur must report VAT on sales of the immediately preceding year only once, in January of each year, unlike general taxpayers who file VAT returns twice a year. In addition, there is a difference in that a separate value-added rate for each industry is determined and calculated, and even if a refund occurs as a result of the VAT calculation, it cannot be refunded. When you started your business, you applied for a simplified business, but if the sales standard exceeds the simplified taxable person, the tax office will notify you to change to a general taxable person. In this case, you can proceed with general taxable person registration according to the regulations.
2. Individual business registration procedure
There are two ways to register as a sole proprietor: visit the tax office or apply online. The first way to apply is to visit the tax office and apply for registration at the nearest tax office. You can apply for business registration even if you do not reside at the tax office in your jurisdiction, but the registration processing time may be delayed.
Individual business registration must be done before starting the business or 20 days prior to starting the business. In order to receive a VAT input tax credit when paying taxes on business or store fixtures and items purchased for starting a business, it is recommended to register a business in advance and prepare for business. Individual business registration can also be done online. Go to the National Tax Service homepage “Hometax”, log in, select [Application/Submission] – [Business Registration Application (Individual)], enter the necessary information and submit the documents. If you are new to business, it is advantageous to visit and register at the tax office because you need tax terminology or related help.
3. Individual business application documents
In order to apply for sole proprietorship, additional documents are required according to individual and joint names. In addition, separate documents are required for non-citizens or foreigners to register as a business, and business operators for special purpose businesses must also submit a copy of the license and license issued by the relevant organization.
Business Registration Application.
A copy of the lease agreement (if the business is leased).
License registration, copy of report. (Businesses that require permission)
partnership agreement. (jointly owned business)
Statement of Source of Funding. (necessary business)
Overseas Koreans, Foreigners: A copy of alien registration card (passport), a copy of the overseas Korean registration book.
In the case of partnership, even if there are two or more business operators, one person must be registered as the representative director. You must also prepare and submit a partnership agreement stating that you will jointly operate the business. If you are unable to visit the tax office in person, a representative can apply for business. In this case, you must bring the business owner’s power of attorney, a copy of the business owner’s ID card, and the agent’s ID card.
Register as a sole proprietorship
The individual business registration process and application method are simpler and easier than you think. People who start a business for the first time tend to feel burdened about tax affairs, but if you find information and visit the tax office to obtain related information, you can register as a business without unexpected difficulty. In addition, since the required documents can be issued on the Internet, you can proceed with the registration yourself. When converting from an individual business to a corporate business due to increased sales, there is a part that requires separate cooperation from a tax accountant. I will post more on this part.