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Agricultural & fishery corporations

Farming Association Corporation Establishment Procedure — The 5-Farmer Requirement and Tax Benefits

A farming association corporation is a corporation in which 5 or more farmers contribute jointly and run a cooperative business. There is no limit on the total amount of contributions, and if the requirements are met there are tax benefits such as a corporate tax reduction on income from crop cultivation and carry-over taxation of capital gains tax on farmland contributed in kind. If the number of members falls below 5, new members must be added within 1 year, so start by planning the membership.

Written by Hwang Yunsang, Administrative Agent · Published 2026-09-26 · Updated 2026-10-05

Procedure

  1. 1. Check the membership

    5 or more farmers (or agricultural producers' organizations such as agricultural cooperatives) must be members, and at the registration of establishment, documents confirming that the members are farmers (agricultural business entity registration confirmation certificate, farmer confirmation certificate, etc.) are submitted. Discuss in advance each member's amount of contribution and role, and even the possibility of withdrawal in the future. In practice, the contribution per member is often set at around 1,000,000 to 5,000,000 won.

  2. 2. Draft the articles of association and hold the inaugural general meeting

    The articles of association set out the business purposes, the method of contribution, the admission and withdrawal of members, the method of resolution, and the distribution of surplus. Hold the inaugural general meeting to adopt the articles of association and elect the representative director and the directors, and then prepare the minutes.

  3. 3. Make the contributions, report the establishment and register the establishment

    Make the cash contributions and the contributions in kind such as farmland and grassland, and file a report of establishment with the city, county or district (si/gun/gu) office having jurisdiction over the principal office. Within 14 days from the day the report confirmation certificate is received, apply for the registration of establishment at the competent registry office with that certificate attached.

  4. 4. Business registration and agricultural business entity registration

    After the registration, register the business at the tax office and register the corporation as an agricultural business entity. Policy support and tax reductions can be applied only after the entity is registered.

Required documents

  • Articles of association
  • Minutes of the inaugural general meeting
  • List of members and details of contributions
  • Documents confirming that each member is a farmer (agricultural business entity registration confirmation certificate, farmer confirmation certificate, etc.)
  • Report of establishment for the city, county or district (si/gun/gu) office (the report confirmation certificate is attached at the registration of establishment)
  • Officers' written acceptance of office and identification documents
  • For contributions in kind: documents on the farmland or grassland

Fees

Registration and license tax for the registration of establishment and registration costs are charged separately. Administrative agent service fees in the industry generally range from several hundred thousand won up to the 1,000,000 won range and vary with the number of members, whether there are contributions in kind, and the scope of drafting the articles of association. We will advise you after a consultation based on the members and the business plan.

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Legal basis and review date

  • Act on Fostering and Supporting Agricultural and Fisheries Business Entities, Article 16
  • Act on Fostering and Supporting Agricultural and Fisheries Business Entities, Article 16-3
  • Enforcement Decree of the Act on Fostering and Supporting Agricultural and Fisheries Business Entities, Article 13
  • Enforcement Decree of the Act on Fostering and Supporting Agricultural and Fisheries Business Entities, Article 13-2
  • Restriction of Special Taxation Act, Article 66
  • Restriction of Special Local Taxation Act, Article 11
  • Enforcement Decree of the Restriction of Special Taxation Act, Article 63

Checked against the statutes on

Statutes and public notices change, so each case needs to be checked individually. Statute titles are given in English for reference. The Korean statutes are the authoritative text.

Check these first

  • If the number of members falls below 5, new members must be added within 1 year.
  • Tax reductions have requirements and time limits, so whether they apply must be checked before establishment.

Frequently asked questions

How many people are needed to establish a farming association corporation?
5 or more farmers must contribute jointly. If members withdraw after establishment and the number falls below 5, new members must be added within 1 year, and failure to do so can be a ground for dissolution.
What is the difference between a farming association corporation and an agricultural company corporation?
A farming association corporation is an association-type corporation in which 5 or more farmers run a cooperative business, and an agricultural company corporation takes the form of a company in which contributions by non-farmers are also allowed within a certain range. Compare first which form fits the members and the direction of the business.
What tax benefits does a farming association corporation have?
Income from food crop cultivation is exempt from corporate tax, and income from other crop cultivation is exempt up to the income corresponding to revenue of 600,000,000 won per member per year (applies to business years ending on or before December 31, 2026). If farmland, grassland or similar property is contributed in kind and the requirements are met, carry-over taxation of capital gains tax can be applied (for contributions made on or before December 31, 2026; if half or more of the equity received is disposed of within 3 years, the carried-over tax amount is paid), and there is an acquisition tax reduction for farming real estate acquired within a certain period after establishment. The requirements and time limits can change with tax law amendments, so they need to be checked before establishment.
What is the minimum contribution for a farming association corporation?
There is no statutory minimum for the total amount of contributions. In practice it is often set at around 1,000,000 to 5,000,000 won per member, in line with the scale of the business and the operating funds.

Other guides in this area

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Hwang Yunsang Administrative Office in Songdo, Incheon prepares and submits administrative documents and explains the procedure. If your situation is similar, send us a message.

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This guide is general information based on public sources. Requirements, documents and deadlines differ by case and by the competent agency, so please confirm them before you proceed.