What to Know Before Fitting Out a Foreign Company's Office: From Branch Office Registration to Restoration to Original Condition

What should the person in charge at a foreign company's Korean branch check before signing the lease on their first office in Korea? Branch office establishment and registration, the lease structure, the building's construction rules, and restoration to original condition at move-out are all tied to the construction schedule and cost. If you start without knowing the order, you may only get to the lease and the building's rules after the design is finished. This article walks through five steps in order, from branch office registration to restoration to original condition and head office approval.

STEP 1. Procedures to know before signing: Establishing and registering a branch office

According to Invest KOREA's guidance, a foreign company's branch office is in principle established by notifying a foreign exchange bank first, then registering with the court, then registering the business; and according to National Tax Service guidance, the business registration documents include a copy of the lease agreement.

To do business in Korea, a foreign company must, under Article 614 of the Commercial Act, appoint its representative in Korea and either establish a branch office (called a "business office" in the Act) or have at least one of its representatives hold a domicile in Korea. The branch office must be registered at its location within three weeks from the date it is established.

The procedure differs between setting up a local subsidiary (a foreign-invested company) and opening a branch office. Invest KOREA (KOTRA)'s guide to establishing a business states that a branch is legally a foreign entity and so isn't recognized as a foreign-invested company. This article doesn't cover the procedure for setting up a local subsidiary.

The order the guide presents for establishing a branch is, in principle, to notify a foreign exchange bank first, register with the court, and then register the business. According to the National Tax Service's business registration guidance, the application documents for a foreign corporation's domestic place of business include a copy of the lease agreement (if the business premises are leased) and a copy of the notification form for the establishment of a domestic branch of a foreign company. It's hard to put the office lease off until the branch establishment procedure is completely finished. Whether you can sign the lease before registration needs to be confirmed with a judicial scrivener (beopmusa) or an attorney.

□ Align the lease timing with the order of foreign exchange bank notification, court registration, and business registration. A copy of the lease agreement is included in the business registration documents.

□ Build the time needed for home-country authentication of the court registration documents into the schedule. Proof of the head office's existence and similar documents need authentication by a relevant home-country authority or a consul stationed in Korea, and registration has to be made within three weeks of establishment.

STEP 2. The lease: Deposit, management fees, and applicable law

In a lease, check the management fee separately from the deposit and monthly rent.

Office rent in Korea is split into a deposit and monthly rent, and the management fee is charged on top of that. The Korea Real Estate Board's glossary also explains that, in its statistics, rent does not include the management fees and similar charges paid by the tenant. If you compare only the rent, you're looking at a figure with the management fee left out.

How far the Commercial Building Lease Protection Act (Korean: 상가건물 임대차보호법) applies to a lease depends on the size of the deposit. The Act does not apply to a lease whose deposit exceeds the threshold set by Presidential Decree (Article 2(1) proviso). However, some provisions, such as the one on the tenant's right to assert the lease against third parties (*Korean: 대항력; the lease becomes effective against third parties from the day after the tenant takes delivery of the building and applies for business registration, Article 3(1)), apply even to leases above the threshold (Article 2(3)). That means the business registration timing from STEP 1 is also tied to when that right arises.

If the Act applies to the lease, and the parties have agreed that the tenant pays the management fees needed to maintain the building, the tenant may ask the landlord to provide the details of the management fees charged to the landlord, and the landlord must comply (Article 19-2, in force from May 12, 2026).

□ Check the lease's deposit, monthly rent, and management fee structure item by item. The management fee is charged separately from the rent.

□ Check how far the Commercial Building Lease Protection Act applies to this lease and, if it applies, whether you can request the details of the management fees. The scope of application depends on the size of the deposit.

Branch office registration and the lease are outside what interior work covers, and the interior company usually comes in once the building contract is reasonably far along. From the next step on, this article also includes what SPACEBASE has experienced on site.

STEP 3. Before construction: The building's construction guidelines

Before construction, check whether the building has set its own construction rules.

You need to get the "building construction guidelines" from the building's disaster-prevention office and pass them to the interior company. Depending on the building's guidelines, the total construction cost can rise by as much as about 10%. That means a quote received without the guidelines may come in lower than the actual construction cost.

Guide ① also listed the "building construction management guidelines" as a document that must be attached to the RFP (request for proposal).

□ Hand the building construction guidelines to the interior company together with the RFP. The guidelines need to be reflected from the quotation stage.

STEP 4. Decide the move-out before moving in: Restoration to original condition

The record made at move-in becomes the baseline for comparing the scope of restoration at move-out.

The scope of restoration under statutes and case law

Article 615 of the Civil Act applies mutatis mutandis to leases (Article 654), so a tenant, too, must restore the leased property to its original condition when returning it, and may remove anything the tenant has attached to it. The Supreme Court has held that where a tenant has repaired or altered the leased property, the tenant must in principle remove that part and return it to its condition at the time of the lease. It added that the scope is to be decided specifically and case by case in light of the contents of the contract, the condition of the property at the time of the lease, and what was changed (2017Da268142).

There is also a 1990 decision on a case where a tenant leased and renovated a shop that already had fixtures: absent a separate agreement, the tenant only had to restore what the tenant had renovated, excluding the facilities installed by the previous tenant (90Daka12035). The two decisions involve different facts, so it is hard to say that either one takes precedence.

A tenant may demand that the landlord buy anything attached with the landlord's consent when the lease ends (Article 646), and an agreement that is contrary to this provision and others and is unfavorable to the tenant is void (Article 652). However, the Supreme Court interpreted an agreement with specific wording, under which the tenant would rebuild or alter with the landlord's approval and then restore the premises to their original condition at the tenant's expense before the return date, as a waiver in advance of the tenant's claim for reimbursement of beneficial expenses (95Da12927). The claim for reimbursement of beneficial expenses is the right to be repaid, if an increase in value remains when the lease ends, either the amount spent or the amount of the increase (Civil Act Article 626(2)).

How to read such an agreement differs from case to case, but all three decisions looked at whether there was an agreement on restoration and, if so, what it said. That means the scope of restoration is set by several circumstances, starting with the restoration clause in the contract.

What to check before the move-in construction

Since the rule is to restore the premises to their original condition on return, the scope of the move-in construction is tied to what has to be reversed at move-out. Restoration is often a mandatory item in the building contract, but few clients set the construction scope with it in mind.

If you sort out effectively, with restoration in mind, where existing facilities can be used, you can reduce the company's operating budget later. The criteria for deciding how far to reuse existing facilities are covered in The Standards for Reusing Existing Facilities in Office Interior Work.

If the site is one another company is using, whether the floor and ceiling you see now will still be there when you move in depends on how far restoration goes. A site you view after restoration is finished doesn't have this problem. For a small office building, restoration rules differ from building to building, so it's important to check.

□ Check the contract's wording on the scope of restoration (what is removed, which areas, who bears the cost). The contract's contents are taken into account in setting the scope.

□ If the site is one another company is using, check how far and in what way the floor, ceiling, and existing facilities will be restored. What remains when you view the site may differ from what remains when you move in.

□ Record the move-in condition with photos and documents. It becomes the baseline for comparison at move-out.

STEP 5. Head office approval and the schedule

Once the building is settled, you start looking for an interior company right away, and move-in takes 3 to 4 months on average, depending on the size of the space.

Foreign company projects are different right from the bidding stage, where the interior company is chosen. The RFP often comes in English, an English PT (presentation) is often required, and SPACEBASE also writes the design proposal in English. In some cases the overseas head office makes the first selection of interior companies to take part in the bidding, and the person in charge in Korea runs the bidding PT. In that case, the head office is involved in the schedule from the bidding stage, before construction.

Because the budget and design also need approval from the overseas head office, preparation can take longer than for other companies. How much longer varies by head office and isn't consistent. Occasionally, every matter is confirmed with the overseas side even during construction before the work proceeds, and since a reply often takes a week, progress becomes difficult. The more often something needs confirming, the longer the construction schedule can run. That's why it works more smoothly when a person in charge in Korea serves as PM (Project Manager) during construction.

□ Check which steps need head office approval and put them in the schedule first. The approval waiting period affects the steps after it.

□ Separate what needs confirming with the head office from what the person in charge in Korea can decide. A reply from the head office often takes a week.

Scope and basis of this article

This article went through the topics in order, from branch office registration to restoration to original condition, head office approval, and the schedule. The lease agreement goes into the business registration documents, while the restoration clause, the construction guidelines, and head office approval are things to reflect in the construction scope, the quote, and the schedule before work begins. The statutes, court decisions, and public agency guidance in this article are organized from the published original texts, and this article is not legal advice. Which provisions apply to an individual contract needs to be confirmed by a judicial scrivener or an attorney. The practical content from STEP 3 onward is SPACEBASE's field experience, and the statutes are as of October 2026.

🔗Related Reading

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👉 Office Interiors for Foreign Companies: Three Roles the Korean Branch Space Plays

👉 [An Easy-to-Follow Office Design Guide] ① How to Write an RFP

👉 [An Easy-to-Follow Office Design Guide] ② 6 Ways to Choose an Interior Company

👉 [An Easy-to-Follow Office Design Guide] ③ How to Get Good Quotes & the Importance of the 'Site Briefing'

👉 [An Easy-to-Follow Office Design Guide] ④ How to Prepare Your PT & Manage the Construction Schedule

👉 [An Easy-to-Follow Office Design Guide] ⑤ How to Run a Final Inspection Before Moving In

If you want to set the construction scope and schedule after the building is decided, with the construction guidelines and restoration to original condition in mind, contact SPACEBASE.

👉 Contact SPACEBASE about your project

*Photos and design courtesy of SPACEBASE