Why local sales in Korea are possible without an entity — a ground-up explanation of the legal basis and mechanics of the Importer of Record / Seller of Record structure.
The two terms refer to separate legal roles under Korea's customs and e-commerce rules. Understanding them without confusion is the starting point.
The IoR and SoR can be held by the same entity or by different entities. When an overseas brand enters Korea without a local entity, the structure works by having a third-party local entity perform both roles on its behalf. This is the legal basis for the IoR/SoR agency service KONIVO provides.
Korean marketplaces do not allow overseas entities to sell directly. This is not a platform policy but a legal requirement.
The IoR/SoR structure is a contractual arrangement that clearly separates legal responsibility among three parties: the overseas brand, the local agency (IoR/SoR), and the Korean consumer.
The IoR/SoR agency is listed as the party legally obligated for import and sale. The overseas brand is insulated from Korean administrative and tax obligations.
Even though registration is in the agency's name, trademark and product ownership belong 100% to the original brand. This is set out in a brand ownership agreement.
The IoR/SoR structure is legally valid only when three agreements between the brand and the agency are executed together: a delegation agreement, a brand ownership agreement, and a settlement agreement.
IoR and SoR are separate legal statuses. The same entity can perform both, but the "importer" under the Customs Act and the "online retail business" under the Act on Consumer Protection in Electronic Commerce are independent obligations grounded in different laws. Confusing the two roles can create legal gaps in certification, customs clearance, and consumer dispute handling.
See how KONIVO actually operates →Not every overseas brand has to choose this structure. Depending on the situation, a different entry structure may be a better fit.
These are risks a brand must understand and pin down in the contract when choosing an IoR/SoR structure.
| Risk | Level | Description | Mitigation |
|---|---|---|---|
| Breach of contract by the IoR/SoR | High | Risk that the agency uses sales proceeds at its own discretion or delays settlement | Escrow payment or a weekly settlement agreement, plus securing joint view access to the brand's accounts |
| Ownership of certifications | High | KC and food certifications obtained under the IoR's name may not be transferable when the contract ends | Spell out a certification transfer clause in the contract and agree the transfer process (30 days) in advance |
| Ownership of marketplace accounts | High | Coupang and Naver accounts are owned by the IoR/SoR entity, so the brand may lose account access | Register the brand as a joint account administrator, plus a transfer guarantee agreement (KONIVO's 30-Day Transfer Guarantee) |
| Product recall liability | Medium | If a recall occurs, the IoR (KONIVO) bears primary liability; how cost recovery is pursued must be agreed in advance | Take out product insurance and clarify product-liability terms in the contract |
| Misunderstanding the tax structure | Medium | A permanent establishment (PE) issue may arise even if the brand has no substantive management activity in Korea | Review by a tax accountant and establishment of a transfer pricing policy |
| Difficulty controlling pricing | Low | The SoR independently decides to discount prices or sell bundles | Include the pricing policy (MAP/MRP) as a contract term |
Misunderstandings often make brands hesitate to enter — or, conversely, hold the wrong expectations.
The concept questions brands ask most often.
No entity, no local hiring — the fastest path to selling on Coupang and Naver within 30 days.