Korean Business Registration Number — What the Checksum Tells You

You're about to wire KRW 30 million to a Korean vendor. The invoice has a 10-digit business registration number (사업자등록번호). Is it real, or could it be a typo — or worse, a fabricated number from a fraud attempt? You can answer that in under one second, without calling anyone, by checking the embedded checksum. Here's how it works.

The format you'll see

Korean business registration numbers are 10 digits, typically formatted with two hyphens:

The middle two digits encode business type (more on this below). The last digit (10th) is a check digit computed from the previous nine. If someone fabricates a number, getting that check digit right by chance is a 1-in-10 gamble.

The checksum algorithm

The Korean National Tax Service (NTS) defines the algorithm as follows. Let the ten digits be d1, d2, ..., d10.

1. Multiply the first nine digits by the weight vector [1, 3, 7, 1, 3, 7, 1, 3, 5] and sum the results.
2. Add the tens-digit of (d9 × 5). This is a special correction step that some implementations forget.
3. Compute the check digit as (10 − sum % 10) % 10.
4. If the check digit equals d10, the number passes.

Worked example: 123-45-67890

A common test string is 123-45-67890. Let's walk through it.

So 123-45-67890 is not a valid format. The check digit should be 1, but the number ends in 0. This is exactly the kind of input typo that the checksum catches.

Why these weights work

The 1-3-5-7 weight pattern is a variant of ISO 7064 and was adopted by the Korean NTS in 1976. The combination has a useful property:

• Every single-digit typo is caught — changing any one digit changes the checksum
• Adjacent-digit transpositions (swapping d2 and d3, for example) are almost always caught, because consecutive weights are different
• A random 10-digit string passes only about 10% of the time, so fabricated numbers fail roughly 90% of the time

Combined with the format constraint and the typing of middle digits, the practical false-positive rate for random fabrication is much lower than 10%.

Reading the middle two digits

Digits 4 and 5 encode the business type. This isn't used in the checksum, but it tells you about the counterparty at a glance:

What the checksum cannot tell you

A passing checksum verifies format only. It cannot tell you:

• Whether the business is actively registered
• Whether the business has been suspended or closed
• Whether the business is in tax arrears
• Whether the address or representative is current

For real-time registration status, the Korean National Tax Service runs a free public lookup at Hometax Business Status Inquiry (no certificate required). Use the checksum as a first-pass filter and Hometax for the definitive status.

Practical workflow before a wire transfer

1. Run the number through the checksum validator — instant pass/fail.
2. Check the middle two digits — does the business type match what the vendor told you? (A "consulting LLC" claiming an XXX-01-XXXXX individual number is a red flag.)
3. Run a Hometax status check — is the business actually registered and active?
4. Cross-reference the company name on the tax invoice with the Hometax registration certificate.

Steps 1 and 2 take less than ten seconds. Step 3 takes about a minute. Together they catch nearly every typo, fabrication, and misrepresentation before money moves.

Wrap-up

Korean business numbers carry their own verification built in — you just need to know the algorithm. For a one-second check, use the business number validator. For deeper context on Korean tax and accounting, see the income tax calculator and VAT calculator.

Algorithm is current as of the National Tax Service published spec. For active-business verification, always cross-check with Hometax.