Yuhan Hoesa (유한회사) is akin to a private limited company or closely-held LLC (though distinct from the newer “LLC” concept introduced in 2012). It’s often used by smaller businesses or foreign investors who want a simpler corporate structure.

Minimum Capital
There is no statutory minimum capital requirement for a Yuhan Hoesa—practically you can start with as little as ₩1 (or whatever amount the members agree). The oft‑cited ₩100 million guideline applies only if you wish to qualify as an FDI company for visa or incentive purposes; it is not a legal prerequisite to incorporation. Many Yuhan Hoesa launch with modest capital (₩10–₩50 million) and still operate fully.

Share Structure
Yuhan Hoesa does not issue “shares” but rather has “units” or quotas of ownership (each member holds a portion of the capital). Different classes of equity? Generally, no; all members typically have equal rights proportional to contributions (unless otherwise specified in Articles of Incorporation). Transfer of ownership can be more restricted – often requiring approval of other members for new members to join. Public offering of new membership stakes is not allowed.

Members (Shareholders)
1 to 50 members allowed (Yuhan means “limited” and historically was capped at 50 members). No nationality restrictions – foreigners can own 100%. Many foreign small businesses choose Yuhan Hoesa for a wholly-owned subsidiary. Limited to 50 members: making it unsuitable for widely-held enterprises, but fine for SMEs or joint ventures. As with Chusik Hoesa, liability is limited to capital contribution.

Management & Legal Representative
Requires at least one director (can be called a manager). No board of directors required – even if company grows large, a Yuhan Hoesa can stick to a simpler management (though it may choose to have a board). Typically, there is a Representative Director (Manager) serving as the legal representative.

Residency
No resident requirement; any nationality can fill this role. Auditor: Optional (and often not used) for Yuhan Hoesa – historically they were exempt from external audit requirements, though since 2018 large Yuhan Hoesa might need audits similar to Chusik Hoesa (amended External Audit Act requires even limited companies to undergo audit if they meet certain size thresholds). The 2018 law changes mean larger Yuhan Hoesa (meeting specific asset or debt criteria) are no longer “invisible” – they must submit to auditing and disclosure similar to corporations.

Taxation
Taxed the same as Chusik Hoesa. It’s a corporate entity subject to CIT on worldwide income (if domestic) and withholds taxes on dividends to members. No pass-through benefits: Unlike US LLCs, a Korean Yuhan Hoesa is not a flow-through for tax; it pays corporate tax and members pay tax on dividends. CIT rates: same progressive rates (9%, 19%, 21%, 24% brackets) plus local tax. VAT, WHT: same obligations as any company doing business. Dividends to foreign members: subject to WHT (usually 20%/22% unless reduced by treaty). One difference: a Yuhan Hoesa cannot issue bonds or other securities, so certain financing methods (like bond issuance) are off the table.

Reporting & Compliance
Simplified governance means no mandatory annual general shareholder meeting (instead, decisions can often be made by written resolution of members, unless a meeting is convened). However, in practice, an annual meeting of members is held (or resolutions passed) to approve accounts, since financial reporting is still necessary.

Registration Process & Timeline
Registration begins with drafting and signing the Articles of Incorporation in Korean by the founding member(s), followed by filing those articles together with the member list and director appointment documents at the Court Registry. Once registry approval is secured, the applicable registration tax (0.48 % of capital) is paid and a business registration certificate is obtained from the local tax office—typically within 20 days of the registry filing. If you plan to meet the ₩100 million FDI threshold, an FDI report is then submitted to KOTRA or through a foreign‑exchange bank. The entire sequence usually completes in two to three weeks, often faster than a Chusik Hoesa since there’s no need for board formation or share‑certificate formalities.

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External Audit
Only if it meets large company criteria under the External Audit Act (similar triggers as Chusik). Most small Yuhan Hoesa won’t need an audit. Tax filings: same schedule (annual corporate return, quarterly VAT, etc.). Bookkeeping and financial statement prep required by law, but not public except if audited.
Ease of Incorporation: Slightly simpler than Chusik Hoesa – no need to form a board or issue share certificates. Only one incorporator needed. Quick to set up (2–3 weeks typically, including FDI filing if needed). Common Uses: small and medium enterprises (SMEs), family-owned businesses, or wholly-owned foreign subsidiaries wanting a lean structure. Many foreign investors chose Yuhan Hoesa historically to avoid public disclosure (no need to publish financials unless audited). However, recent changes impose audits on bigger ones, leveling the playing field.

Foreign Ownership Restrictions
None inherent to this form – foreigners can own up to 100%, same caveat about regulated sectors applies. The FDI filing (₩100 M) threshold is the same across corporate forms. The Yuhan Hoesa itself was popular among foreign companies precisely because it had fewer disclosure requirements and, in the past, was exempt from mandatory external audits. This made it attractive if privacy about financials was desired (though now large limited companies also require audits per 2018 law).

Liability
Limited Liability. Members (like shareholders) are liable only up to their contributed capital. Creditors cannot claim beyond the company’s assets, unless personal guarantees are given separately.

Summary
Yuhan Hoesa company provides a simpler corporate form for up to 50 closely-held owners. It’s functionally similar to a private limited company, ideal for SMEs or wholly-owned subsidiaries not needing to raise public capital. It offers limited liability and slightly lighter governance (no board or complicated shareholder meeting rules). Foreign investors looking for a straightforward, private structure often use Yuhan Hoesa, especially for smaller scale operations or where less bureaucracy is preferred.