The Korea Customs Service revealed that from the first quarter of 2023 to the third quarter of 2023, 2.2217 trillion won of Chinese goods were purchased by sea, accounting for half of all goods purchased by Korean users.
WeMakePrice data also shows that in the first 11 months of 2023, Korean consumers purchased goods from China's sales increased by 801%, the growth rate is far ahead of Europe, Japan and other countries.
Correspondingly, the global e-commerce giants such as Sizzler, TEMU, SHEIN and other Chinese e-commerce giants are continuously increasing investment in the Korean market, the number of its Korean users have also shown explosive growth.
Today, I would like to introduce you to Coupang, a Korean e-commerce platform.
Coupang is the largest e-commerce platform in Korea, with 315W monthly UV, more than 2000W users, and sales of more than 2 billion dollars. Coupang is the largest e-commerce platform in Korea, with 315W monthly UV, over 2000W users, and sales of more than $2 billion. Coupang is often endorsed by popular Korean celebrities, which has brought about a great fan effect. Half of the Korean population has installed their app on their mobile phones, and their valuation has exceeded US$5 billion. Coupang is characterized by fast logistics and short delivery time, and is one of the fastest-growing e-commerce platforms in Korea, and can be said to be the star of the future.
Coupang offers two preferred logistics models for Chinese sellers.
Cross-border stores: Mainland China, Hong Kong, Macao and Taiwan registered enterprises to enter the store
With the CGF shipping model, sellers can send their products to the North China Weihai Warehouse Center, and after customers place their orders, the products will be quickly picked, packed and delivered to the customers in Korea.
Local store: Korean local business license stores
Using CRG shipping model and local warehouse service in Korea. After orders are placed on the platform, they are delivered directly to Korean consumers from the local Korean rocket warehouse. Manage product inventory and pricing through Coupang's local warehouse in Korea.
Benefits of opening a local store in Coupang
Compared to cross-border stores, local stores have 4 major advantages:
✅Fast delivery
Regardless of whether or not they are blue rockets, local stores can be said to beat cross-border stores in terms of delivery time, and fast delivery is the foundation of Coupang's platform. From this point of view, local stores have an obvious advantage.
✅ Higher weighting
Due to the delivery timeframe, local stores will be skewed in the weight ranking.
✅ High conversion rate
For Korean buyers, local stores are more trustworthy as they believe that Korean stores will be more reliable than cross-border stores, not to mention the number of cross-border stores whose illegal games have led to a decline in trust in cross-border stores among Korean buyers this year. Therefore, in this case, the local store will have a higher order intent in the buyer's mind, and the corresponding payment conversion rate will be higher.
✅ Faster payback
Local stores collect weekly and cross-border stores collect monthly. Local stores have a faster collection cycle and a shorter payout cycle.
How to start the first step of localization?
Green Circle helps you to understand Korean company registration in seconds!
Information required for registration of a Korean company
The whole process of registration is relatively easy, customers do not need to go to Korea in person, you can complete all the procedures through our company.
1. Company name:
The company name needs to be in Korean, or English can be used, but only the company name in Korean will be marked on the business license.
2. Legal representative passport
3. Register of shareholders and passport of the largest shareholder
4. Authorization, etc.
3. Corporate form:
There are two main forms of Korean companies, namely, a corporation and a limited liability company. Both forms are taxed at the same rate and enjoy the status of a legal person. However, there are some differences between them. While a corporation has the potential to go public, a limited liability company does not. Therefore, when choosing a corporate form, weigh it against your long-term planning and business needs.
4. Registered capital: the registered capital of foreign investors is 100 million won.
5. Registered Address: A local registered address in Korea is required.
Office Cycle:
It is estimated that it will take 6-8 weeks from the submission of the application to the completion of all procedures. Upon completion, all relevant information will be sent by mail.
What documents can I get after registering a Korean company?
Certificate of Incorporation
Business License
Foreign Investment Certificates
Bank Accounts and Physical Cards
OTP card
seal
Co-certification (for internet banking login)
How to Maintain a Korean Company after Registration
In Korea, a company registration requires a series of follow-up maintenance work, the most critical of which is the annual audit and tax filing:
Annual Audit of Korean Companies
The annual audit is an important event for Korean companies every year and is usually conducted in March. Companies that fail to conduct annual audits on time face fines and other penalties.
Companies are required to prepare annual financial reports and other related documents such as balance sheets, profit and loss statements and cash flow statements. The prepared documents are then submitted to the Inland Revenue Department (IRD) within the stipulated timeframe.
The Inland Revenue Department will verify the accuracy and compliance of the documents. Upon passing the audit, the company will receive an annual audit certificate certifying that it has completed the annual audit and complied with the requirements of the relevant regulations.
Korea Corporate Taxation
Tax filing for Korean companies varies depending on the type of company. Offshore companies registered in Korea but not operating or conducting business there are not required to pay taxes, but are still required to undergo an annual audit. For companies that have a physical presence in Korea, they are required to file monthly and yearly financial statements for tax purposes and undergo an annual audit.
There are two broad types of taxes in Korea: value-added tax and corporate tax.
VAT: Korea's value-added tax (VAT) rate of 10% is a quarterly tax return with a credit system. A VAT refund will be issued when the amount of input tax is greater than the amount of sales tax. VAT returns for corporations or branches are filed quarterly in January, April, July and October of each year and must be completed by the 25th of the month.
Corporate tax: This is equivalent to corporate income tax and is levied on the net profit amount of a company. Korea's corporate income tax rate used to be 10%-25%, but the Tax Act was amended in 2022 to lower the corporate income tax rate by 1% to 9%-24%. Specifically:
Profit less than 200 million won (1.1 million RMB) is 9%;
The profit portion of KRW 200 million - KRW 20 billion (RMB 110 million) is 19%;
The 20 billion won - 300 billion won portion is 21%;
The profit portion of over 300 billion won is 24%;
Overall, the tax environment for Korean companies is similar to that of Mainland China: similar tax rates and similar tax policies.
Green Circle Accounting Firm not only provides one-stop Korean company registration service for sellers, but also devotes itself to provide your business with a full range of after-service protection, such as bookkeeping and tax return, annual audit, etc., to ensure that your business develops steadily in the Korean market.
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