Photograph by Mikhail Nilov on Pexels.
Statutory books kept in Korean for the tax office, and a management pack in your group's format and language for the people who make decisions. One team does both, so the two never disagree.
A Korean entity has two audiences for its numbers and they want different things.
The National Tax Service wants statutory books, in Korean, in won, prepared on Korean accounting standards, supporting a set of filings that arrive on a fixed calendar. It does not care about your group’s reporting format.
Your head office wants the opposite: numbers in the group chart of accounts, in the group’s currency, with the commentary that explains why the Korean entity looks different this month. It does not care about the Korean forms.
Most problems we are asked to fix start with those two jobs being done by two different people who never speak. The statutory books get filed on time and are technically correct; the management pack is assembled separately in a spreadsheet; and six months later nobody can explain why the two show different revenue. Then an auditor asks.
| Stage | What happens | Who does what |
|---|---|---|
| Through the month | Transactions posted as they occur; invoices, expenses and bank movements processed continuously | We process; you approve payments |
| Close week | Accruals, prepayments, depreciation, FX revaluation, intercompany reconciliation | We prepare; you review exceptions |
| Reporting | Trial balance, statutory ledger, management pack in your group format | We deliver; you distribute |
| Filing points | VAT, withholding and payroll filings drawn from the same ledger | We prepare and file |
Processing continuously rather than in a month-end batch is not a stylistic preference. It is what makes the close short enough that you find out about a problem while there is still time to do something about it.
Korea runs two frameworks. K-IFRS is mandatory for listed companies and financial institutions and optional for others; Korean GAAP — formally the Accounting Standards for Non-Public Entities — applies to most unlisted companies, including the great majority of foreign-owned subsidiaries.
Which one applies to you is a decision with consequences, and the right answer often depends on what your parent reports under. A subsidiary of an IFRS group that keeps local books on Korean GAAP will need a conversion at every reporting date. Sometimes that is cheaper than running K-IFRS locally; sometimes it is not. It is worth deciding deliberately rather than inheriting whichever framework your first bookkeeper happened to use.
The external audit requirement in Korea attaches to companies exceeding thresholds under the Act on External Audit of Stock Companies. The important operational fact is not the threshold itself — it is that companies cross it quietly, on the back of a good year, and find out afterwards.
Being audit-ready is mostly unglamorous:
If those exist as a by-product of the monthly close, an audit is a two-week inconvenience. If they have to be reconstructed, it is a quarter.
The deliverable that matters most to the people paying for the Korean entity is the one nobody regulates: the monthly pack. Ours is built to be read by someone who does not know Korea.
Bookkeeping is the foundation the filings sit on. Getting it right makes everything downstream cheaper: VAT and corporate tax filing draws directly from the same ledger, payroll posts into it, and the bank signatory and reconciliation controls that keep a small office honest depend on the accounts being current.
If you have not incorporated yet, the sequencing matters more than most people expect — see company registration in Korea.
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Yes. Statutory accounting records and tax filings are prepared in Korean and in Korean won, and the tax authority expects to see them in that form. That is separate from what your head office needs. The usual arrangement is one set of underlying records producing two outputs: the Korean statutory books, and a management pack in your group’s chart of accounts, currency and language. We maintain both from the same ledger, which is the only way to guarantee they reconcile.
It depends on what you are filing. Routine bookkeeping does not require a Korean Certified Public Accountant, but tax filings, statutory financial statements and any position that could be challenged by the National Tax Service benefit substantially from one. Companies that separate these — a cheap bookkeeper plus an occasional tax agent — tend to discover the gap during an audit, when nobody owns the answer. Every engagement here includes a KICPA.
Not automatically. Korea’s external audit requirement applies to companies that exceed thresholds set under the Act on External Audit of Stock Companies — measured on assets, liabilities, revenue and employee numbers — and the specific thresholds are revised from time to time. Many foreign subsidiaries sit below them for years and then cross one after a growth year, usually without noticing. We check your position at each year end and tell you before it becomes urgent, because appointing an auditor late is both expensive and awkward.
Usually. Our team works in SAP and Oracle NetSuite as well as Korean local packages. Where your group runs its own ERP, we can post directly into it and maintain the Korean statutory ledger alongside, or maintain the Korean books locally and deliver a mapped upload for the group system. Which is better depends on how tightly your group controls its chart of accounts.
You get a fixed calendar. Transactions are processed through the month rather than batched at the end, so close is a review exercise rather than a scramble. The output is a reconciled trial balance, the management pack, and a short note on anything unusual — an accrual that moved, a vendor that changed terms, a variance worth a sentence of explanation. Silence with a spreadsheet attached is not reporting.
We take the trial balance, the supporting ledgers, the fixed asset register and the tax filing history, reconcile the opening position, and flag anything that does not tie. That reconciliation is the valuable part of a transition — it is often the first time anyone has checked the previous provider’s closing balances independently. Expect the first month to involve more questions than a steady-state month.
Korean corporate tax tests client entertainment twice: first on how it was paid, then on how much of it there was. A foreign-owned subsidiary usually fails the first test on receipts and the second on a ceiling it assumed was three times higher.
A Korean subsidiary paying a dividend, interest or a royalty to its parent withholds 22% unless the parent's treaty documents are in the payer's hands before the payment. From 1 January 2026 holding them is no longer enough — the payer has to file them with the tax office too.
Most foreign parents discover their Korean subsidiary crossed the external audit threshold in the year after it happened, when the auditor should already have been appointed. The test turns on four numbers measured at the previous year end, and two of them are enough.
