6/11/2013

Legal/Compliance Checklist for your Korean Company: Top 7 Things to Do Before you Do Business in Korea

This checklist was made in response to a media inquiry and is not meant to be exhaustive.
  
1.  Do you Have a Registered Company/Business? Operating in Korea is not as simple as just leasing an office.  All businesses whether in the form of a corporation or sole proprietorship in Korea are required to register as business with the tax office and local government offices.  For some businesses the approval of a government agency will be required.  Other articles on Korean corporate forms may be found at:

2.  Do you Have Employment Agreements, Employment Rules, License Agreements, Joint Venture Agreements, OEM agreements, Shareholder Agreements, Lease Agreements Tailored for your Korean Business?
No your U.S. agreements are not good enough.  Other articles on the need for Korean-tailored agreements that may be of interest may be found at:
3.  Are you in Compliance with Foreign Corrupt Practices Act?  The U.S. Foreign Corrupt Practices Act (FCPA) and the British, Canadian, French, German equivalent allows the government to severely punish those for even actions of a Korean partner.  A compliance system must be put in place.  If you do not have a compliance system tailored to your Korean operation - you may be heading down a road that can lead you into the hands of not, only, the Korean prosecution, but the prosecution of your foreign government.  A few more posts that may be of interest:
4.  Have you Protected your Trademarks, Patents, Copyrights and other Intellectual Property Rights?  Registration of your Intellectual Property rights (IP) "internationally" is not good enough for Korea.  You must register your IP in Korea.  Please read the following posts:
5.  Due Diligence?  I wrote so many times about Due Diligence it is painful to type those two D words.
6.  Did you Conduct a Compliance Audit?  You may be in violation of employment, tax, environmental, antitrust/monopoly, currency control, transfer pricing, occupational health and other laws and regulations.
7.  Did you Conduct a Financial Audit by a True Independent Auditor?  Speaks for itself.

Please - this is not to be taken as an exhaustive checklist.  Please scroll the blog for more issues that may arise in your operations in Korea. 

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Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.

info@ipglegal.com