This article was displayed on the ChosunBiz RM Report site at 4:53 p.m. on Jan. 30, 2026.
Among Korea's popular culture artists, the move to set up "one-person agencies" and go solo rose for a third straight year, hitting a record high. The trend of stepping out of the shadows of big management companies to build independent revenue structures is now evident in the data.
However, as tax audits and additional tax assessments targeting entertainers such as singer-actor Cha Eun-woo (legal name Lee Dong-min, 28) have followed one after another recently, the "tax evasion" risk surrounding one-person agencies is also growing.
According to the 2025 survey on the popular culture and arts industry that the Korea Creative Content Agency (KOCCA) recently released on the 31st, the share of popular culture artists affiliated with one-person agencies rose for three consecutive years, from 2.5% in 2022 to 4.1% in 2023 and 4.3% in 2024. By contrast, the share affiliated with existing management such as large agencies fell from 14.8% to 9.1% over the same period. While there are limits to a sample survey, it is interpreted as a clear shift across the entertainment industry toward preferring one-person agencies.
A one-person agency means there is only one affiliated entertainer, and typically the entertainer sets up a corporation directly to manage activities and revenue. Compared with being with a large management company, greater freedom and more focused management are cited as the strengths of one-person agencies.
Still, the industry points to "taxes" as the biggest driver behind the spread of one-person agencies.
Under the tax base, the personal income tax rate (including local income tax) is 46.2% for annual income of 500 million to 1 billion won, and 49.5% for 1 billion won or more. The corporate tax rate (including local income tax) applies 22% for the 200 million to 20 billion won bracket. If one earns 10 billion won a year, one would pay nearly half, about 4.8 billion won, in income tax, but only around 2.1 billion won in corporate tax, a significant reduction in burden.
If expense treatment is factored in, the perceived difference in tax burden is even greater. If items from hair and makeup expenses to manager and stylist salaries are treated as corporate expenses, corporate tax falls accordingly. Compensation that the entertainer receives while serving as a corporate officer can also be counted as a corporate expense.
One can also avoid so-called "health insurance premium bombs" by paying as a workplace subscriber of a one-person agency, rather than as a high-income regional subscriber.
Oh Moon-seong, president of the Korea Association of Tax Policy, said, "Beyond expense treatment for tax saving, once earnings grow, having a one-person agency is easier for staff and organizational management than working as a sole proprietor."
The problem is that cases judged to cross from "tax saving" into "tax evasion" are recurring. In 2024, including actor Lee Ha-nee, and last year, Yoo Yeon-seok, Cho Jin-woong, and Lee Joon-gi faced additional tax assessments ranging from hundreds of millions to tens of billions of won, bringing the one-person agency issue to the surface.
It becomes more serious when a one-person agency is suspected of being a paper company set up simply to cut taxes. Cha Eun-woo is a representative case. Cha Eun-woo was notified of an additional income tax assessment of 20 billion won, the highest ever for an entertainer.
The National Tax Service believes Cha Eun-woo signed a management service contract with Company A, established by his mother, and evaded income tax by splitting the revenue he earned among his agency Fantagio, Company A, and his personal name. The agency's position is that it "will actively explain in accordance with due process."
The key issue is whether the one-person agency has "substance." A one-person agency must prove it provided management services with proper office space and staffing. As in Cha Eun-woo's case, if the registered address is an eel restaurant in Ganghwa County, Incheon, the tax authorities can judge it to be a paper company with no substantive role and impose additional taxes.
Experts note that while a one-person agency itself is not illegal, income splitting through a shell corporation without substance is clearly subject to assessment.
Kim Sang-bong, an economics professor at Hansung University, said, "The key to distinguishing a paper company is whether there is actual physical presence and monetary substance," adding, "If production or work took place, then monetary transactions would have occurred and, in the end, taxes would have been imposed."
Oh also said, "A one-person agency itself is not illegal, but if a company was created in name only simply to avoid taxes, it becomes subject to assessment."
As the National Tax Service and other investigative authorities have signaled tougher probes into malicious and sophisticated tax evasion, some predict tax disputes over one-person agencies are likely to increase further.
An official at a large accounting firm said, "If it becomes a social controversy, more aggressive tax audits are inevitable," adding, "If you set up a one-person agency simply for tax saving, you may find yourself in a situation where there is more to lose than to gain."