Setting up your South Korean company in Spain

South Korea and Spain in figures

What Spain requires of a Korean company

This is how the main obligations apply to you; the apostille and your team are covered further down:

What changes when you come from South Korea

• ·Double taxation treaty in force since 21 November 1994: it limits what Spain can tax the parent company on.
• ·Investment protection: the bilateral agreement in force since 19 July 1994 guarantees fair and equitable treatment, no less favourable than that afforded to Spanish investors or those of other countries, compensation at market value in the event of expropriation and the free transfer of income and of the proceeds of a sale; a dispute with the State that is not resolved within six months can go to international arbitration.
• ·Parent company documents: Korea has applied the apostille since 14 July 2007, without consular legalisation. From the registry, you request the 등기사항전부증명서 certificate (company and directors) and, if the power of attorney bears the company's registered seal, the 인감증명서, which certifies that seal. The power of attorney and, for a branch, the articles of association (정관) and the resolution to open it go before a Korean notary; everything with an apostille and a sworn translation.
• ·Visa: a South Korean national does not need one for stays of up to 90 days in any 180-day period (meetings, signing before a notary); to work, they need an authorisation.
• ·Social Security: under the Spain-Korea agreement, in force since 1 April 2013, an employee whom your group sends to Spain remains covered only by Korean compulsory insurance for 60 months, extendable if both administrations agree; here the company pays contributions for them in respect of occupational accidents and diseases, and they need medical insurance outside the Spanish Social Security system.
• ·Outflow of capital: Korean foreign exchange rules require the parent company to report an investment of 10% or more in a foreign company to its foreign exchange bank, generally before sending the funds; for a branch, to its designated bank, through which the funds are channelled.
• ·Personal data: the European Commission recognises that South Korea provides an adequate level of protection (2021 decision, confirmed in 2026), so the subsidiary can send customer and employee data to the parent company without additional safeguards, save for exceptions.
• ·Goods: the EU-Korea Free Trade Agreement, applied since July 2011, grants preferential tariff treatment to goods that meet its rules of origin. We prepare your import study and apply for your EORI number.

From Korea to an operating subsidiary, step by step

1. 1

   Review and quote

   Subsidiary or branch, timetable and whether prior authorisation is needed; a fixed-fee quote in writing. Before we start, we identify your company's beneficial owner, as the law requires.

2. 2

   Documents in Korea

   The registry and seal certificates and the power of attorney before a Korean notary, apostilled; at the same time, the parent company reports the investment to its bank.

3. 3

   Sworn translation

   Into Spanish; we coordinate it.

4. 4

   NIF and NIE

   The parent company's NIF and the NIE or NIF with the letter M of whoever signs or acts as director.

5. 5

   Incorporation or branch

   Incorporation of the SL, with a negative company name certificate, or registration of the branch. The SL does not need a bank certificate for the capital if the parent company declares in the deed that it is liable for its contribution.

6. 6

   Investment Register

   Form D-1A within one month.

7. 7

   Tax registration

   Form 036 and electronic power of attorney so that we can file and sign on your behalf.

8. 8

   Beneficial owner

   Declared with the first annual accounts.

9. 9

   Bank account

   The bank opens it subject to its own requirements; it may require the signatory to appear in person.

10. 10

    Team

    Registration with the Social Security system, employee registrations and authorisations.

11. 11

    Ongoing compliance

    VAT, Corporate Income Tax, withholdings, annual accounts and corporate books.

Your Korean team in Spain

Anyone working at the subsidiary or the branch needs a residence and work authorisation: the Large Companies Unit (Unidad de Grandes Empresas) processes it and decides within 20 days (if there is no decision, it is deemed granted), and the visa is issued within 10 working days.

• ·Intra-corporate transfer: managers, specialists or trainees with three months' prior service in the group and a higher education degree or three years' experience; up to three years (one for trainees).
• ·Highly qualified professional: a highly qualified position, at the request of the company or the professional; European variant: the EU Blue Card, with a contract of six months or more and a salary threshold.
• ·Entrepreneur: an innovative project or one of special economic interest, with a favourable report from ENISA.

Family members (spouse or partner, minor or dependent children, dependent ascendants) can apply for their authorisation at the same time or afterwards (family reunification); EU nationals do not need one. A posted executive can opt for the special regime for inbound workers in the year of the transfer and the following five years, if they have not been resident in Spain in the previous five.

Taxes: the treaty with Korea and what is paid in Spain

Without the treaty, the rates would be 19% and, for royalties, 24%. The subsidiary keeps the parent company's certificate of tax residence for treaty purposes, which is valid for one year, and pays over the withholdings with Form 216. Since 2023, these benefits are denied if obtaining them was one of the principal purposes of the transaction.

The subsidiary pays Corporate Income Tax (Impuesto sobre Sociedades) at the general rate of 25%, like any Spanish company. Transactions with the parent company are carried out at market value and, above certain amounts, are reported on Form 232.

With a branch, profits are taxed at the same rate under non-resident income tax, and the 19% supplementary tax on amounts transferred to the parent company does not apply if there is reciprocity, because the treaty does not provide for it.

What we do for your Korean company

We are a law firm and gestoría (administrative services firm): we file and sign on your behalf before the Spanish Tax Agency (Agencia Tributaria), the Social Security system, the immigration authorities (Large Companies Unit, MERCURIO platform) and the Registries. Notary, official fees, apostille and sworn translation are separate and payable by you.

• ·The set-up, with the subsidiary's powers of attorney and the contract for your general manager.
• ·Tax representation, where the case allows it; with a branch, the law would make the representative liable for your debt: we tell you beforehand and agree guarantees.
• ·The shareholders' agreement, if you enter with a Spanish partner, and the European Union trade mark.

We do not provide a registered office or an address for notifications; we do not act as directors, company secretaries or shareholders of your company (nominee or otherwise), nor as customs representative, IOSS intermediary or the person responsible for your products in the EU; we do not apostille documents or sign sworn translations (we coordinate them), nor do we handle a Spanish-only trade mark for you. We work in Spanish and English, in writing and remotely, including during Korean business hours.