How to Buy a Café in Korea: Step by Step from NDA to Handover
Step 1. Set a budget that covers more than the price
The headline price of a café is usually its key money. On top of that you need the lease deposit, which the landlord holds and returns when you leave, the first month's rent, transfer costs such as the withholding tax on key money and possibly VAT, and working capital for at least three months of rent, wages and supplies. Buyers who spend everything on key money run out of cash before the shop settles under new ownership.
Decide early whether you are buying as an individual or through a company, because that changes which taxes apply and whether VAT on the purchase can be recovered. If you are a general VAT taxpayer, VAT paid on equipment and goodwill can be credited; if you register as a simplified taxpayer, it cannot. Our guide on comprehensive business transfer covers this in detail.
Step 2. Sign an NDA and verify the sales
Serious sellers share real figures after a confidentiality agreement, and on Gachiitda the financial tab of a listing opens after you accept the NDA. Ask for 12 to 24 months of VAT returns, card-sales statements from the card company, delivery-app settlement reports if the café delivers, and POS reports. Put the same months side by side. Card sales plus cash receipts should roughly match the VAT return; delivery-app settlement shows what was actually deposited after fees, not the gross order value.
Cross-check with purchases. Coffee beans, milk and cups are bought in proportion to sales, so if sales rose but supplier invoices did not, ask why. Look at seasonality across a full year, and ask how much was spent on delivery-app advertising in the best months, because advertised sales disappear when the advertising stops. Normalize profit by adding a wage for the owner's own hours if the owner works the counter.
Step 3. Confirm the lease before anything else
The café is only worth what the lease allows. Meet the landlord, or have your consultant do so, and confirm in writing that the landlord will sign a new lease with you and on what deposit, rent and term. Ask for the building register (건축물대장) and the property registry (등기부등본) to check that the space is legally usable as a food business and whether there are mortgages that could lead to a forced sale.
Under the Commercial Building Lease Protection Act, a tenant can generally demand renewal for up to ten years in total, and within the Act's protection scope annual rent increases are capped at five percent. Check whether the current lease is close to that ten-year limit, because a renewal right that has run out changes the value of the business. Also ask about redevelopment plans; a notice of redevelopment can end the lease and the key money with it.
Step 4. The key money contract
With the lease terms agreed, sign the key money contract with the seller. It should list every item included, from the espresso machine to the signage, state whether each is owned or rented, and allocate the price between facilities, goodwill and inventory. Make closing conditional on the landlord signing the lease and, if you need a visa, on the visa being granted. Pay a deposit at signing and the balance at handover.
Include a non-compete. The Korean Commercial Act bars a seller who transfers a business from running the same business in the same city or county and neighboring areas for ten years unless agreed otherwise, but a clear clause with a defined radius and period avoids dispute. If the café is a franchise, the franchisor must approve the transfer and may charge a transfer fee and require a store renovation, so get that approval before you sign.
Step 5. Permits: take over the food-business report
A café in Korea operates under a food-business report (영업신고) as a rest-restaurant (휴게음식점) or, if it serves meals, a general restaurant (일반음식점), filed with the district office under the Food Sanitation Act. When a business changes hands, the new operator files a succession report (영업자 지위승계 신고) within one month. The new operator must also complete food hygiene training, and staff who handle food need health certificates.
Check the seller's record for administrative sanctions, because unexpired penalties can carry over to the successor. The district office can confirm this. If the space has never been used as a food business, a new report is needed instead of a succession, and the building's use classification must allow it, which is why Step 3 comes before Step 5.
Step 6. Business registration and the money
Register the business (사업자등록) with the tax office, which can be done online or in person and must be completed within 20 days of starting. Choose general taxpayer status if you want to recover VAT on the purchase. If the deal is a comprehensive transfer, make sure the contract says so and that the seller files the business transfer report with the VAT return. If not, the seller issues a tax invoice and you pay the VAT.
At payment of key money, withhold 8.8 percent as the seller's other-income tax and remit it to the tax office by the 10th of the following month, and give the seller a withholding receipt. Re-register the card merchant account, the delivery-app accounts and any point-of-sale subscriptions under the new business number. Delivery-app accounts deserve attention: whether reviews and order history carry over depends on each platform's rules at the time, so confirm it before you value them.
Step 7. Handover
Agree a handover period, usually two to four weeks, in which the seller works alongside you. Cover recipes and supplier contacts, equipment maintenance, the regular customers' habits, and the seasonal calendar. Ask the seller to introduce you to the landlord and the main suppliers in person. If staff are staying, sign new employment contracts and register them for social insurance under your business.
The first three months are when most of the value is kept or lost. Keep the menu and prices stable at first, keep the people customers know, and change things only after you understand why they were done that way. A verified café with a sound lease and a careful handover is one of the safest small businesses a foreigner can buy in Korea. The steps above are how you make sure it is that café.
FAQ
How much does a café in Korea cost?
It varies by city, location and size. The price is mostly key money plus the lease deposit, and the right way to judge it is against verified monthly profit and the remaining lease, not against other listings.
Do I need a Korean partner?
No. Depending on your visa you can buy as an individual or through your own Korean company. A Korean-speaking consultant helps with the landlord and the district office, but ownership stays with you.
Can I keep the existing staff?
Usually yes, by agreement with each employee. Employment does not transfer automatically in an asset deal, so sign new contracts and register social insurance under your business.
What if the seller's sales turn out to be lower than claimed?
That is what the verification step is for. Put a sales cut-off date in the contract so a drop between signing and closing is visible, and tie the final price to verified figures.
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Get a free consultationThis guide is general information, not legal, tax or immigration advice. Korean laws, tax rates and immigration rules change; confirm the current rules with a Korean tax accountant, lawyer or licensed administrative agent before you sign or file anything.
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