Valid and Enforceable Contracts in Korea: Korean Contract Law Basics

In Korea, contracts are agreements that are legally binding and enforceable under the law. They can be created for a wide range of purposes, such as employment, real estate, intellectual property, and commercial transactions. A contract, in Korea, is an agreement between two or more parties to create, modify, or terminate obligations that are legally enforceable. To constitute a legally enforceable contract in Korea, there must be: It is important to highlight that certain contracts in Korea require specific formalities

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Dual-Class Shareholdings in Korea: Korean Corporate Law Updates

Prior to the recent amendment to the Special Measures for the Promotion of Venture Businesses Act, Korea was an outlier in the developed world with regard to Dual-Class Shareholdings. Most developed economies allow Dual- Class Shares for IPOs and for unlisted countries. Korea prohibited Dual-Class Shareholding for both listed and unlisted companies. Korean Commercial Code Art. 369(1) The Korean Commercial Code mandates that a shareholder may, only, receive one vote for each share. This so called “One-Share One-Vote Principle” was

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Occupational Safety in Korea: Serious Accidents Punishment Act

The Serious Accident Punishment Act (“SAPA”) was passed by the Korean National Assembly and came into effect on January 27, 2022. With the implementation and recent expansion of the SAPA, we encourage all employers to do a comprehensive compliance audit. Some law firms, including this one, have attorneys and staff that can assist your team in doing a comprehensive audit. SAPA has greatly expanded the list of accidents that are applicable and significantly increased the penalties for breaking the law.

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Korean Flat-Tax Rate for Foreign Workers in Korea

The Special Tax Treatment Control Law of Korea extended the benefit of the Flat Tax to 20 years from the present five years. The flat tax rate with the local income tax is 20.9%. of the foreign employee’s earned income. Additionally, the National Tax Services of Korea and the Ministry of Economy & Finance of Korea agreed to deem the starting date for employment to be January 1, 2014, even if the foreigner worked in Korea prior to 2014. Thus,

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Termination of a Franchise Agreement in Korea: Korean Franchise Law Basics

The Fair Transactions in Franchise Business Act (“Franchise Act”) and the Fair Transactions in Large Franchises and Retail Business (“LFBA”) are the major laws governing the relationship between a franchisor and a franchisee. Whereas the general provisions of the Monopoly Regulation and Fair Trade Act (MRFTA), Commercial Act and Civil Act, additionally, regulate the franchise relationship and other business relationships in Korea. See: Definition of a Franchise in Korea for the Definition and an explanation of Korean Disclosure Requirements. Franchise

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Is a Non-Registered Company Director in Korea an Employee under Korean Labor Law

Many non-Korean workers for Korean and international companies doing business in Korea are hired under the title Director. Many of these workers are, in reality, executive employees working as executive-level managers. Many of these workers are “employees” under the Korean Labor Standards with all of the protections afforded employees. For an article on the dismissal of Foreign Executives in Korea please see: Unfair Dismissal of Foreign Executives under Korean Term Contracts and Dismissal of Employees in Korea. Korean Labor Standards

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Non-Compete Clauses in Korean Employment Agreements and Korean Business Sales Agreements

Non-compete clauses in Korean employment contracts are enforceable in Korea, but there are some limitations and requirements that must be met for them to be regarded as lawful and, thus, enforceable. A Non-Compete Clause is a type of restrictive covenant that is designed to protect the business of an employer from competition from a particular party. These clauses are, typically, utilized after the completion of the sale of a business or after termination of employment. The following article shall, specifically,

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Korean Jurisdictional and Choice of Law Issues in Commercial Agency & Distributor Agreements with Korean-based Agents & Distributors

In drafting and negotiating a Korean commercial agency agreement between a principal located in one country and an agent located in Korea, proper consideration needs to be given to the choices regarding the governing law and jurisdiction of such an agreement. If you are looking for an article on choice of law issues in Korean employment disputes, please see: Choice of Law Issues in Korean Employment Law Disputes. If you are looking for a basic overview of Korean Agency &

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South Korea Offers a Variety of Business Visas for those Wishing to Conduct Business in Korea

South Korea offers several types of business visas for foreign nationals who want to conduct business activities in the country. These include the D-7 (Investor/Business Manager) Visa, D-8 (Corporate Investment) Visa, and D-9 (International Trade and Investment) Visa, among others. Each type of visa has its own eligibility requirements and conditions, and applicants must provide proof of their business plans and financial ability in order to obtain the specific visa. Korea’s visa laws are, often, changing. For an article quoting

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Forming a Joint Venture in Korea? Beware a Common Pitfall

A client, a minority shareholder in a foreign-capital-invested company in Korea is involved in litigation with other company shareholders (Korean shareholders) over issues the client had with the majority and other shareholders. The client requested me to post this article to warn others entering the Korean market via a Joint Venture or similar arrangement. This article is not intended to discourage entering the Korean market via a joint venture. JVs in Korea are, often, beneficial for businesses looking to expand

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