The following Korean Compliance Checklist is intended to provide, only, a basic overview of the necessaries for keeping the law and shareholders off your back. We, highly, recommend having a compliance audit performed – if you have not completed a compliance audit of your Korean business within the last three years.
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 businesses with the tax office and local government offices. For some businesses, the approval of a government agency shall be required. Other articles on Korean corporate forms may be found at:
- Establishing a Company in Korea: Under Revised Corporate Code
- Limited Liability Companies Under the Revised Korean Commercial Code
2. Do you Have Employment Agreements, Employment Rules, License Agreements, Joint Venture Agreements, OEM Agreements, Shareholder Agreements, and Lease Agreements Tailored for your Korean Business?
No your U.S. or European agreements are not good enough. Other articles on the need for Korean-tailored agreements that may be of interest may be found at:
- Basic Agreements for Doing Business in Korea
- Doing Business in Asia: Due Diligence, Agreements, Lawyers and Street Smarts
- Negotiating a Joint Venture Agreement in Korea
3. Are you in Compliance with the Foreign Corrupt Practices Act and other Like Laws?
The U.S. Foreign Corrupt Practices Act (FCPA) and the British, Canadian, French, and 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:
- You Can Succeed in Korea without Resorting to Bribery
- Foreign Corrupt Practices Act: Don’t Forget Your Business in Korea
- Korean Anti-Graft Law
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:
- How to Protect your Brands, Trademarks and other IP in Korea
- Nine Musts for a Successful License Agreement in Korea
- Don’t Only Trust Us: Trademarks in Korea
5. Due Diligence?
I wrote so many times about Korean Due Diligence it is painful to type those two Ds.
- Korea Due Diligence: Not So Different from China
- Stock Purchase and M & A Due Diligence Checklist
- Beware the Grey Market Trap: Due Diligence, Agreements, and Street Smarts
- Top 10 Mistakes of Companies Operating in Korea
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.
- Compliance Control Standards in Korea Under the Amended KCC
- I should write more about this issue.
7. Did you Conduct a Financial Audit by a True Independent Auditor?
Often these audits lead to a revelation of financial improprieties and sometimes “independent” auditors are controlled by key employees within your company. Options exist.
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.
Sean Hayes is the first non-Korean attorney to have worked 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. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law for our litigation services.
If you would like a consultation with an English-speaking lawyer in Korea, please schedule a call at: Schedule a Call with an Attorney.
- Korean Compliance Checklist for your Business in Korea
- Korean Data Privacy Act: Need for Compliance Audit for your Korean Company
- Small Business Compliance in Korea: No Not Only for the Big Boys
- Korea’s Legal Measures to Reduce Fine Dust Pollution
- 14 Things to Consider Before Starting a Manufacturing Business in South Korea
- Korean M & A Due Diligence Checklist: Mergers & Acquisitions Due Diligence in Korea
- 52-Hour Workweek Delayed in Korea for SMEs: Korean Labor Law Update
- Searching Trademark & Service Marks in Korea: Register your Trademarks/Service Marks Prior to Doing Business in Korea
- English-Speaking Business Lawyers in Seoul, Korea: Corporate Law & Compliance Team at IPG Legal
- Acquiring Shares in Closed Korean Corporations in Exchange for Products at Discount: Don’t Forget the Due Diligence in Korea