Required governance positions in a South Korean company.

Establishing a business in South Korea offers attractive opportunities in one of Asia’s most advanced economies. However, operating a company within this jurisdiction comes with distinct legal and regulatory requirements, particularly concerning corporate governance. Business owners and foreign investors must ensure they meet South Korea’s governance standards to remain compliant and avoid administrative delays or penalties.

This article explores the required governance positions in a South Korean company. It provides an overview of key roles, including directors, shareholders and company secretaries, as well as outlines optional but recommended positions to support sound corporate management and compliance.

Directors

The appointment of directors is a core aspect of corporate governance in South Korea. Directors are responsible for managing the business, making strategic decisions and ensuring the company complies with South Korean laws and regulations.

The minimum requirements for directors are as follows:

• A limited liability company (Yuhan Hoesa) must have at least one director.
• A stock company (Chusik Hoesa) must have a board of directors, generally consisting of three or more directors, although small-scale companies may appoint fewer (two or more directors).
• Listed companies must have at least three directors, and some of these directors are required to be appointed as independent directors. Additionally, they must have an audit committee or an auditor.
• Large private companies also generally need to have a minimum of three directors, and their board structure may be similar to that of listed companies. In large private companies, it is common to appoint external directors to enhance management transparency and accountability.

There are no general residency requirements for directors in private South Korean companies. However, in practice, companies may find it advantageous to appoint a resident representative director to handle local matters such as opening bank accounts or liaising with government agencies.

Foreign nationals can serve as directors, provided they hold the appropriate visa status, such as a D-8 investor visa.

Additionally, there are no specific educational or professional qualifications required for directors under Korean law. However, individuals must not be disqualified due to criminal convictions or bankruptcy.

Companies are encouraged to appoint directors who possess sound judgement and relevant experience to ensure good governance.

Shareholders

Shareholders are the owners of the company and have the power to influence major decisions, such as changes to the company’s articles of incorporation, appointment of directors or capital increases.

Both Yuhan Hoesa and Chusik Hoesa require a minimum of one shareholder.

Shareholders can be either individuals or legal entities, and there are no restrictions on nationality or residency.

Share capital

For a stock company (Chusik Hoesa), the minimum share capital is 100 million KRW (approximately USD 75,000). However, certain industries, such as banking or financial services, may be subject to higher capital thresholds.

The details of share ownership must be recorded in the shareholder registry, and any changes to ownership must be reported to the relevant authorities to maintain legal compliance.

Company secretary

In South Korea, appointing a company secretary is not mandatory. As a result, the responsibilities usually associated with this role are often handled by a legal representative or a certified attorney (beopmusa). These responsibilities may include:

• Maintenance of statutory records and company seals
• Preparation and filing of corporate documents with the commercial registry
• Organisation of board meetings and shareholder resolutions
• Monitoring compliance with corporate, tax and regulatory obligations

Since the appointment of a company secretary is not a legal requirement in South Korea, there are no specific rules regarding residency or qualifications for this position. Many companies choose to outsource these functions to experienced legal service providers, which helps ensure accurate compliance and avoids the risk of regulatory penalties.

Supervisors, auditors and other statutory roles

Certain South Korean companies may be required to appoint auditors or supervisory board members, depending on their size, industry or corporate structure.

Statutory auditor

A statutory auditor (Gamsa) is mandatory for Chusik Hoesa companies that meet any of the following thresholds:

• Paid-in capital of KRW 1 billion or more
• Total assets of KRW 100 billion or more
• More than 300 employees

The auditor must be independent and is responsible for reviewing the financials and ensuring legal compliance.

Audit committee

Larger public companies are required to establish an audit committee in place of a single auditor. This committee must include at least one external director who possesses financial or accounting expertise. These requirements aim to enhance transparency and maintain sound corporate governance practices.

Supervisory board

Supervisory boards are not common in South Korean private companies. However, larger or listed companies may establish them to oversee management performance and enhance transparency. In the case of listed companies, the establishment of a supervisory board may be influenced by the need for additional oversight and accountability.

Optional but recommended roles

Although not legally required, certain roles can strengthen governance practices and support daily operations, especially for foreign-invested companies.

Representative director

A representative director is a key figure with the legal authority to act on the company’s behalf. Only one director may be designated as the representative at any time, although co-representation is possible through board resolutions.

General or local manager

Especially useful for foreign companies, a general manager can supervise local operations, staff and liaise with authorities. This role is often filled by a local hire or an expat with deep operational knowledge.

Compliance officer

Appointing a compliance officer is advisable for companies operating in regulated sectors or engaged in cross-border trade. The officer helps ensure adherence to regulatory frameworks, particularly concerning tax, labour and data protection laws.

Legal representative

Although often synonymous with the representative director, companies may designate a legal representative for specific filings, court matters or compliance procedures.

Finance and HR manager

Foreign-invested enterprises often benefit from appointing finance or HR managers to oversee payroll, accounting and employment matters in accordance with Korean labour laws.

Conclusion

Understanding the required governance positions in a South Korean company is essential for establishing and maintaining a compliant and successful business operation. While legal mandates are relatively straightforward, requiring at least one director and shareholder, larger or listed companies face more complex governance demands, including statutory auditors and board committees.

Foreign investors are encouraged to go beyond the minimum requirements and consider appointing additional roles like company secretary, general manager or compliance officer to ensure operational efficiency and long-term success in Korea’s dynamic business landscape.

How Acclime can help with corporate governance compliance in South Korea

Acclime offers complete support for establishing compliant governance structures and maintaining ongoing corporate compliance. From entity setup to governance advisory, our team of experts can assist with everything from appointing required officers to managing statutory filings. By partnering with us, foreign investors and expanding businesses can confidently meet regulatory obligations and operate smoothly in the South Korean market. Contact us to learn more about how we can support your governance setup and ongoing compliance needs.