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Ease of Doing Business in

Korea, Rep

Korea, Rep Download Profile (1771.7KB, pdf)
Region OECD high income
Income Category High income
Population 50,617,045
GNI Per Capita (US$) 27,440
City covered Seoul

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 5 4 down
1
84.07 83.86 down
0.21
Starting a Business 11 17 up
6
95.83 94.36 up
1.47
Dealing with Construction Permits 31 28 down
3
77.84 77.83 up
0.01
Getting Electricity 1 1
-
99.88 99.88
-
Registering Property 39 41 up
2
76.34 76.22 up
0.12
Getting Credit 44 42 down
2
65.00 65.00
-
Protecting Minority Investors 13 10 down
3
73.33 73.33
-
Paying Taxes 23 25 up
2
86.56 86.54 up
0.02
Trading across Borders 32 32
-
92.52 92.52
-
Enforcing Contracts 1 1
-
84.15 84.15
-
Resolving Insolvency 4 6 up
2
89.22 88.75 up
0.47

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

39

DB 2016 Rank:

41

Change in Rank:

up2

DB 2017 DTF (% points):

76.34

DB 2016 DTF (% points):

76.22

Change in DTF (% points):

up0.12

STANDARD PROPERTY TRANSFER
Property value KRW 1,546,123,139
City Seoul
Indicator Korea, Rep OECD high income
Procedures (number) info_outline 7 4.7
Time (days) info_outline 5.5 22.4
Cost (% of property value) info_outline 5.1 4.2
Quality of the land administration index (0-30) info_outline 27.5 22.7
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    1

    Obtain certified copies of the corporate registration and the registered corporate seal, and the registry extract of the concerned land and building from the District Court Registration Office

    Agency: District Court Registration Office

    I. Obtain commercial registry extracts and registry extracts of the concerned land and building


    The parties, as legal entities, must prepare corporate registry extracts, corporate seal card and registry extracts of the concerned land and building.

    There are three methods to obtain the purchasing corporation's registration certificates on the land and the building to collect the real estate information:


    (i) by visiting the District Court Registration Office in person and obtaining such documents from a registration officer (charge: KRW 1,200 each). The District Registration Officer issues copies of the corporate registration, real property registration, etc.;

    (ii) by using an unattended machine (charge: KRW 1,000 each); and

    (iii) by obtaining on line via website(www.iros.go.kr) (charge: KRW 1,000 each)


    II. Obtaining the certificate of the registered corporate seal card can be done through:


    (i) visiting the District Court Registration Office in person and obtaining the document from an officer (charge: KRW 1,200); and

    (ii) using an unattended machine (charge: KRW 1,000 each)


    All registry extracts and the certificate should be issued within three months before the registration of the titles will happen.

    Less than a day (online procedure)

    KRW 1,000 for corporate registry extracts of the Party (online)
    + KRW 1,000 for registered corporate seal of the Party (unattended machine)
    + KRW 1,000 for registry extract of the concerned land
    + KRW 1,000 for registry extract of the concerned building
    2

    Obtain copies of the Land Cadastre Certificate and the Building Management Certificate

    Agency: The jurisdictional district office (e.g. City Hall, Gu-Office, Gun-Office)

    Those copies are issued by governmental offices of various levels {(e.g. the City Hall, Gu-Office(similar to "borough office") or Gun-Office(similar to "district office")} and there are 3 ways to obtain each copy of certificates above

    (i) visiting the City Hall, Gu-Office or Gun-Office and obtaining through an officer (charge: KRW 500 each);
    (ii) using an unattended machine placed in a governmental district (charge: KRW 300 each); and
    (iii) obtaining via website (www.minwon.go.kr) of Korean government (free of charge).

    (Building ledger: http://www.minwon.go.kr/main?a=AA020InfoCappViewApp&HighCtgCD=A02002003&CappBizCD=15000000098,
    Land cadastre: http://www.minwon.go.kr/main?a=AA020InfoCappViewApp&HighCtgCD=A02009006&CappBizCD=13100000026)

    From January 18, 2014, the Integrated Certificate of Real Estate that includes both certificates for the Land Cadastre and the Building Management is also available. The Integrated Certificate can be issued at www.onnara.go.kr (charge: KWR 1000) or the District Registration Office (charge: KRW 1500).

    Less than a day (online procedure)

    One copy of the Land Cadastre Certificate & the Building Management Certificate: no cost (online)

    It it also possible to obtain an integrated Land Cadastre & the Building Management a the cost of KRW 1000 and KRW 1500 obtained from jurisdictional district office.

    From January 18, 2014, the Integrated Certificate of Real Estate that includes both certificates for the Land Cadastre and the Building Management is also available. The Integrated Certificate can be issued at www.onnara.go.kr (charge: KWR 1000) or the District Registration Office (charge: KRW 1500).
    3

    Prepare the sale agreement and affix the stamp duty

    Agency: District government office, Korea Financial Telecommunications and Clearings Institute, post offices and commercial banks

    Preparing sale agreement

    Although it is not mandatory to use real estate agent, most people use agents. Occasionally, some also go through lawyers. Commission fee to real estate agent are paid by both parties that commissioned the brokerage, provided that the amount is to be decided by mutual agreement between the brokerage client and the licensed real estate agent within 9/1000 portion of the transaction price. Commission fee for lawyers are generally charged hourly.


    Affixing Stamp duty

    The purchasing corporation should purchase National Revenue Stamp. Due to the amendment of the Stamp Tax Act enforced as of January 1, 2015, only the electric form of NRS is permissible. Parties can purchase the electric form of NRS via website(www.e-revenuestamp.or.kr) or from banks, post offices, and registered governmental offices(Shi, Gun, Gu-Offices), paying the same amount of price as aforementioned."

    1 day "National Revenue Stamp (for stamp duty) + Real estate agent fee (the parties and the agent usually agree for same or less than 0.9% of the sale price)

    * Note: Stamp duty (in this case, KRW 350,000)

    Property value (KRW million) NRS (KRW)
    Over 10, less than or equal to 30 20,000
    Over 30, less than or equal to 50 40,000
    Over 50, less than or equal to 100 70,000
    Over 100, less than or equal to 1,000 150,000
    Over 1,000 350,000
    4

    Report the real transaction price

    Agency: District government office

    There is a system of reporting 'real transaction price' in Korea. The parties that are going to enter into an agreement for sale of real property should report real transaction price to the Tax Department of jurisdictional district office (usually to Gu-Office, in case of there's no Gu: to City Hall, etc.) within 60 days after signing the sale agreement. This procedure is required to prevent tax evasion.

    Both seller and buyer are in duty of reporting the sale price, which can be performed via the website (http://rtms.molit.go.kr/) of the Ministry of land, infrastructure and transport.

    After the price of the sale has been reported, the Office of the Tax Department issues "the real transaction price report".
    "The real transaction report" includes:
    (i) the identification of both parties;
    (ii) signing date, intermediate payment date, and remainder payment date;
    (iii) the location, parcel number and land category of an agreed real estate;
    (iv) the type of real estate and the area of an agreed real estate; and
    (v) the real price of a transaction.

    With this report, the District Tax Office will calculate taxes to be paid as below ('real transaction price' of the report can also be the 'purchase price').

    Less than a day (online procedure)

    no cost
    5

    Buyer pays taxes online

    Agency: Tax department of jurisdictional district office

    The buyer pays all required taxes (specified below) online at For Seoul: etax.seoul.co.kr. Other than Seoul: wetax.go.kr.


    The tax amount due in case of the property with value of about KRW 1.25 billion located in Seoul is as follow:


    (1) Acquisition Tax: 4% of the purchase price

    (2) Education Tax: 0.4% of the purchase price

    (3) Agricultural and Fisheries Tax: 0.2% of the purchase price


    Less than a day (online procedure)

    (1) Acquisition Tax: 4% of the purchase price (in the case, approximately KRW 57 million)
    (2) Education Tax: 0.4% of the purchase price (in the case, approximately KRW 5.7 million)
    (3) Agricultural and Fisheries Tax: 0.2% of the purchase price (in the case, approximately KRW 2.8 million)
    6

    The buyer buys Housing Bonds

    Agency: Commercial banks

    The buyer should buy 'national housing bonds ("Bonds") at commercial banks in Korea, write the number of the Bonds at the application form for the registration, and submit the form to the District Courts Registration Office when applying for the registration of the title. There are 6 commercial banks that handle national housing bonds, which are: Shinhan Bank, Woori Bank, Kookmin Bank, Hana Bank, Industrial Bank of Korea, and Nonghyup.


    Value of Bonds that need to be purchased by the buyer, in case of real property located in Seoul, based on the "standard market price"

    - Land:

    2.5% (from KRW 5M ~ less than KRW 50M)

    4% (from KRW 50M ~ less than KRW 100M)

    5% (from KRW 100M)

    - Real property other than Land and house:

    1% (from KRW 10M ~ less than KRW 130M)

    1.6% (from KRW 130M ~ less than KRW 250M)

    2% (from KRW 250M)


    The Bonds have a maturity of 5 years, after which they are redeemed with interest. The buyer, however, can sell the Bonds shortly after purchasing them at a

    1.6227% discounting rate as of March 10, 2016.


    In practice, however, buyer buys the Bonds at bank and resells the Bonds immediately at a loss of above discount rate. The bank will issue the receipt with the Bonds number to buyer after receiving the discount fees. The receipt with the Bonds number is needed for applying for the registration of the titles.


    (Cost of Procedure 6 is not included in the calculation of the total cost).

    Less than a day (online procedure) (i) In case that the warehouse is located in Seoul, Inchon, Daejeon, Gwangju, Busan, Ulsan or Daegu: 5% of the standard market price of of the Land + 2% of the standard market price of the building.

    (ii) In case that the warehouse is located in other than above seven (7) cities: 4.5% of the standard market price of of the Land + 1.8% of the standard market price of the building.


    Both are not included in calculation of total cost.

    7

    Buyer applies for the registration of the titles

    Agency: District Court Registration Office

    Parties file the application form for registration of the title at the District Court Registration Office within the jurisdiction. The District Court Registration Office is in charge of registering the title under the name of the new owner. Fee for the application is KRW 15,000 per each lot in case of submitting the application form (written by hands) with other necessary documents to the registration officer. In case of submitting the application 'e-form' (filled out online and printed) with other necessary documents to the registration officer, the fee is KRW 13,000. If the Parties apply online (www.iros.go.kr), fee is KRW 10,000 but the authentication certificate for internet banking is necessary for using the online application.


    Documents to be submitted for the registration of the title transfer include:

    (i) In general, certificate copies of the corporate registration and the authentication certificate of a seal of a vender corporation’s representative are required;

    (ii) copies of the Land Cadastre Certificate & the Building Management Certificate;

    (iii) a certificate of reporting real transaction price;

    (iv) original copy of the executed sale agreement on which NRS should be affixed;

    (v) Property tax clearance;

    (vi) the Receipt of purchase of Housing Bonds;

    (vii) a registration certificate which is in the possession of the seller;

    (viii) a Power of Attorney

    2 days Cost per real property (land + building) for court registry stamp: In person: KW 15,000, Electronic standard form application: KW 13,000, Electronic application: KW 10,000

  • Measure of quality
    Answer Score
    Quality of the land administration index (0-30) 27.5
    Reliability of infrastructure index (0-8) 8.0
    What is the institution in charge of immovable property registration? District Court Registration Office
    In what format are the majority of title or deed records kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Fully digital 2.0
    Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)? Yes 1.0
    In what format are the majority of maps of land plots kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Fully digital 2.0
    Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)? Yes 1.0
    Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases? Different databases but linked 1.0
    Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties? Yes 1.0
    Transparency of information index (0–6) 4.5
    Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city? Anyone who pays the official fee 1.0
    Is the list of documents that are required to complete any type of property transaction made publicly available–and if so, how? Yes, online 0.5
    Link for online access: www.iros.go.kr
    Is the applicable fee schedule for any property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how? Yes, online 0.5
    Link for online access: www.iros.go.kr
    Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Yes, online 0.5
    Link for online access: http://www.iros.go.kr/pos1/html/eng/PEngServiceH.html
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration? No 0.0
    Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency? Yes 0.5
    Number of property transfers in the largest business city in 2015: According to certain real estate related data provided by the Ministry of L...
    Who is able to consult maps of land plots in the largest business city? Freely accessible by anyone 0.5
    Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5
    Link for online access: www.minwon.go.kr Fees are as follows: (i) the perusal of a parcel-register for site - in person : KRW 300, on line : KRW 200 (ii) the issuance of a certified parcel-register for site - in person : KRW 500, on line : KRW 300 (iii) the perusal of a cadastral map - on line : for free (iv) the issuance of a cadastral map - on line : for free
    Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it communicate the service standard? Yes, online 0.5
    Link for online access: Building Ledger: http://www.minwon.go.kr/main?a=AA020InfoCappViewApp&HighCt...
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency? No 0.0
    Geographic coverage index (0–8) 8.0
    Are all privately held land plots in the economy formally registered at the immovable property registry? Yes 2.0
    Are all privately held land plots in the largest business city formally registered at the immovable property registry? Yes 2.0
    Are all privately held land plots in the economy mapped? Yes 2.0
    Are all privately held land plots in the largest business city mapped? Yes 2.0
    Land dispute resolution index (0–8) 7.0
    Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties? Yes 1.5
    Is the system of immovable property registration subject to a state or private guarantee? No 0.0
    Is there a specific compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Yes 0.5
    Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)? Yes 0.5
    If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Lawyer; Interested Parties.
    Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5
    If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Lawyer; Interested Parties.
    Is there a national database to verify the accuracy of identity documents? Yes 1.0
    For a standard land dispute between two local businesses over tenure rights of a property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the first instance? Depending on the exact location of the land within Seoul, the court of first instance in charge may be: - Seoul Central District Court (Civil Collegiate Section), - Seoul Eastern District Court (Civil Collegiate Section), - Seoul Western District Court (Civil Collegiate Section), - Seoul Southern District Court (Civil Collegiate Section), - Seoul Northern District Court (Civil Collegiate Section).
    How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)? Less than a year 3.0
    Are there any statistics on the number of land disputes in the first instance? No 0.0
    Number of land disputes in the largest business city in 2015:
    Equal access to property rights index (-2–0) 0.0
    Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0
    Do married men and married women have equal ownership rights to property? Yes 0.0