Korean Immigration Law’s 20% Rule Challenged

Increased direct foreign investment to Korea is, facially, Park Gun Hye’s Administration’s top priority. However, according to the Korea Herald, it seems like the Korean bureaucracy is not following the Park Administration. The Korea Herald reported that foreign companies have increased complainants about the current Korean immigration law as exemplified in at a government-organized forum in Seoul last week.   The complaints have come, in part, because “[u]nder Korean immigration regulations, companies are allowed to employ a workforce with up to 20 percent of their employees being foreign semi-professionals or skilled laborers on an E-7 visa.” Some participants argued that under the current regulations, foreign companies have to employee more local workers in order to increase their foreign workforce, which “adds to the financial pressure to many small and medium-sized foreign companies.” We see this and other issues with Immigration that we have seen, first hand, is causing many foreign

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Finding a Distributor or Agent to Sell/Market Your Products in the South Korean Market

Finding a quality distributor for your products is not an easy task in Korea.  We regrettably have dealt with numerous issues related to distributors not paying invoices, misrepresenting products, violating intellectual property rights and even selling fake products alongside the real imported products. The major reason for these occurrences is the client to quickly rushing into “opportunities” without vetting out a distributor and poorly drafted distributions agreements. Many distributors in Korea are fantastic, others are mere order processors and some are downright criminals.  It is not too difficult to avoid the latter two if you consider, at least, some of the following: 10 Ten Things to Consider Prior to Doing Business with a Distributor in Korea. Has the Korean distributor worked with other foreign companies? If not, you are, likely, dealing with a very inexperienced distributor.  Check, also, if the distributor was educated abroad.  We find that those with, only,

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Samsung Threatens Suit Over Reports of Chairman’s Condition

Irked by continuing reports of chairman Lee Kun-hee’s failing health, the Samsung Group has threatened legal action against media outlets carrying the stories fueling the speculation.  Commenting on this possibility, a Samsung spokesman stated that “we’ve repeatedly requested media with unsubstantiated reports for corrections. If they do not comply, we may file suit.” Rumors of the chairman’s health have been widespread since he suffered a heart attack earlier this month. One report this past week had the Samsung chairman dying on May 16th, explaining that Samsung was hiding the news in the meantime. The company has maintained that Lee is steadily recuperating. Chairman Lee is South Korea’s richest man.  He has been at the controls of the Korean conglomerate since 1987. The Power of Samsung in Korea: Ways to Protect Your Business from the Powers to Be in Korea Apple vs. Samsung: Koreans are Furious at China for Copying Samsung

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Verdict in latest Samsung/Apple Courtroom Battle

A U.S. Federal Court jury has resolved the latest legal dispute between Apple and Samsung, ruling that both companies wrongfully infringed some of the other’s patents while absolving each of liability in other patent infringement claims. Very notably, the jury awarded Apple $119.6 million in damages, much less than the $930 million awarded the two tech-giant’s earlier 2012 case, and nowhere near the $2.2 billion Apple had been seeking in this trial.  All of this, of course, is pending appeal. Commenced when Apple filed suit against Samsung in February of 2012, this suit saw Apple once again accusing Samsung of patent infringement, claims Samsung “systematically copied Apple’s innovative technology and products, features, and designs, and . . . deluged markets with infringing devices.” Samsung counterclaimed that Apple engaged in patent infringement of its own. A great article on the matter can be found at Vanity Fair: Apple’s Victory over Samsung

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Derivative/Shareholder Suits in Korea: Corporate Governance in Korea

Much like the United States, Korean law permits shareholders of a company to file a lawsuit against the company’s directors/third parties, on behalf of the company, when directors’/third parties’ wrongful acts result in losses or may later result in losses. In this type of legal action in Korea, known, often, as a derivative suit, the plaintiff-shareholders do not bring a claim as themselves as individuals, but as representatives of the corporation, the entity suffering the harm but which otherwise would be unable to raise a claim. In Korea, Article 403 of the Korean Commercial Code defines the statutory basis for derivative suits. The Code provides that a shareholder, holding at least 1/100 of the total issued and outstanding shares of a company, may sue a director on behalf of the company shareholders. With regard to listed companies, the code permits derivative suits when a shareholder has held not less than

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Using Korea as a Test Bed for Asian Expansion: Look to Facebook

I have advised, on many occasions, clients to look to Korea for their Asian expansion prior to entering more expensive and difficult Asian market – hey Facebook seems to agree in an article entitled: Facebook uses Korea as Test Bed. The Korea Herald has an interesting article that quotes the president of Facebook Korea as noting that:  “Facebook sees Korea as an important country due to its high mobile usage and the presence of global companies like Samsung and Hyundai,” he said. “This makes Korea an important test bed to Facebook (insofar as it is) wishing to be a mobile-first company.” We strongly recommend that all companies consider Korea as a useful “test bed” in determining if Asia will be a success for your brand, franchise, technology etc.  This advise is, also, the advise of the former head of the European Chamber in Korea that noted in the EU Chamber

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Guide to Establishing a Company in Korea: Branch vs. Office; FIPA vs. FETA

The establishment of a foreign enterprise in Korea is governed, inter alia, by the Foreign Investment Promotion Act and/or the Foreign Exchange Trade Act. Formation of a local corporation of a private business in Korea is governed by the Foreign Investment Promotion Act of Korea.  The establishment of a branch or office is governed by the Foreign Exchange Act of Korea.  A branch or office, in Korea, is considered a  domestic branch of a foreign corporation under Korea law. FOREIGN-CAPITAL INVESTED COMPANIES IN KOREA The Foreign Investment Promotion Act and the commercial law of Korea apply to investments that a foreign individual or a foreign corporation makes by establishing a corporation in Korea.  The corporation is considered a local corporation that was foreign-capital invested.  The foreigner or foreign company, in most cases, must  invest a minimum of KRW 100 million to avail of the benefits of the acts. The Foreign

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“Ordinary Wages” Under Korean Labor Law Clarified by the Supreme Court: “Regular, Uniform & Flat” Definition

The definition of “ordinary wage” has been clarified by the Korean Supreme Court in two decisions handed down on December 18, 2013.  The cases will have a significant impact on Korean Labor & Employment Law and will, likely, lead to additional litigation. The calculation for an Ordinary Wage is utilized to calculate statutory entitlements, thus, has an impact on the aggregate amount of contributions necessary to be paid to an employee.  The issue is one of the most significant issues, this year, for domestic and foreign employers. For example, under Article 56 of the Korean Labor Standards Act, an employer must pay 50% of the “ordinary wage” plus the ordinary wage for overtime, night and weekend work performed by the employee.  For many companies, this calculation could increase costs to a point that will make profitable companies head, immediately, to the red. The basic test has been that an Ordinary

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Can Koreans Perceive Foreigners as Part of the Tribe? by Senior Advisor Tom Coyner

Living abroad offers interesting and frustrating challenges. Having lived half my life in East Asia, I have long accepted that the trade-off in having an above-average existence comes with above-average potential irritations. That is, if one really gives a damn about what is happening, living in Asia can drive the well-intentioned expatriate up the wall. On the other hand, if one rationalizes what is happening in the immediate community is none of the foreigners’ business, life can be much simpler and more pleasant. A recent case in point came in the guise of an e-mail from an American friend who has lived in Korea for more than 40 years. Having lived here more than two-thirds of his life and being bilingual in Korean, he often seems more Korean than Western. But even before he arrived as a Peace Corps volunteer, he had developed a passion for older architecture. In time,

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Drinking Culture in Korea Explained by Tom Coyner

I’s funny how words can inform and mislead. When I first came to Korea in the mid-1970s, I often was enchanted and confused by the similarity of Korean and Japanese. For example, I stumbled across the word “judo.” Was it the martial art? No, that was “yudo” in Korean. It turns out that in at least literary circles, judo refers to the “way of wine.” Looking at the Chinese characters that originally formed the word, it was easy to recognize the first character, “ju,” from other uses of the same, referring to alcoholic beverages – often simplistically translated as “wine.” The second character, “do,” was the same as in Japanese, but as “tao” in Chinese. That character can be translated concretely as “path,” but it often connotes a more philosophical and spiritual meaning of “way.” The term Taoism traces its roots to this character. Getting back on path, the reader

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Do you Sell Buggy Whips? Succeeding in a Competitive Korean Market

In many ways, the 19th century continued until the outbreak of World War I. The 20th century ended with the fall of Lehman Brothers.  In confusing times such as these, it is natural for people to draw parallels as a way to understand current events surrounding us. They hope to gain some insight on an uncertain future. Here are some examples: A recent issue of BusinessWeek suggested that America of 2009 may learn from Japan of the 1990s. In Korea, journalists, businesspeople and even some economists refer to the 1997-98 Asian financial crisis as a case study from which they may forecast a future. But America is not Japan. In so many cultural and political ways, such comparisons defy making accurate projections. And the “IMF Crisis” was a regional event. It was relatively isolated from the global economy, compared to the worldwide crisis we face today. Today, several public figures

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The Korean War in Full Tom Coyner Color

There has been a great deal of activity commemorating the 60th anniversary of the Korean War armistice, but there has been little review of the events that made up the second half of that war. One may recall the basics: war begins in June 1950, UN responds in July, fighting around the Pusan Perimeter until August, Incheon landing and retaking of Seoul in September, UN forces capture North Korea, Chinese forces push back UN forces from October through December and fighting occurs around the 38th parallel during the first half of 1951. Then details seem to disappear during the two-year stalemate from July 1951, followed by the armistice negotiations with continued fighting until July 1953. In other words, after the Allied Forces retook Seoul a second time in March 1951, there is little mention, other than the casualties and a few battles. So, what really happened during those ensuing two

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Leading Attorneys in Korea: Sean Hayes One of Only Two Non-Koreans on List of Top Lawyers in South Korea

We are proud to announce that Sean Hayes has recently been listed by Asia Law as one of the top  attorneys working in South Korea. Leading Lawyers/Law Firms in Korea by AsiaLaw. Sean Hayes, IPG Legal Yong Seok Ahn, Lee & Ko Heejae Ahn, Yoon & Yang LLC Jay Ahn, Kim & Chang Henry An, Samil PricewatersCoopers Woo Hyun Baik, Kim & Chang Chad Chang Hoon Lee, Muhann Patent & Law Firm Yong-Jae Chang, Lee & Ko Tae Yeon Cho, Cho & Partners Young Joon Cho, Bae Kim & Lee Young Sun Cho, Yoon & Yang LLC J H Choi, Choi & Kim Jae Seong Choi, Barun Law Kyung Joon Choi, Kim Chang & Lee Woo Young Choi, Hwang Mok Park Hyunseok Choi, You Me Patent & Law Firm Won-Hyun Choi, Kim Choi & Lim Won Sik Choo, Lee & Ko Eui Jong Chung, Bae Kim & Lee Kye Sung

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KoreaBANG Takes on a Scandal at the JRTI

Our friends at KoreaBANG have posted an interesting article regarding a recent adultery scandal and suicide at Korea’s Judicial Research and Training Institute.  The site was founded by the same people that created ChinaSmack.  I can’t say all of the information on the site is unbiased, however, it is interesting.  Take a look here:Adultery Scandal at Korea’s Elite Law School Ends in [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. [email protected]

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Sean Hayes Attends American Bar Association’s Forum on Franchising

IPG has one of the leading practices in Franchise and Distribution in Asia.  Sean Hayes will attend the American Bar Association’s Forum on Franchising. From the event’s brochure: Welcome to the 36th Annual forum on Franchising at the Rosen Shingle Creek Resort in Orlando, Florida on October 16-18, 2013. Starting on Wednesday, October 16, highly-experienced franchise attorneys will present Fundamentals of Franchising, the finest course available on the basics of franchise law.  Two additional five-hour intensive programs will also be offered: an in-depth program on the theory and practice of mediating a franchise dispute, and Fundamentals of International Franchising, featuring experienced practitioners from both sides of the pond. On Thursday and Friday, twenty-four engaging, unparalleled workshops cover a variety of legal developments and business challenges facing the franchise industry.  Make sure to attend outstanding plenary sessions, including the popular Annual Developments, a survey of the key cases and decisions in

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‘Meet the Lawyers’ Session at MIPCOM Features Sean Hayes

Along with the speech by attorney Sean Hayes at MIPCOM on October 8, 2013 – Sean participated in a session entitled ‘Meet the Lawyers.’ Sean discussed, during the session, issues related to the clearing and acquisition of intellectual property in Asia.   In attendance were attorneys from Germany, Holland, Turkey, Korea, the UK and the US. Other articles that may be of interest that relate to MIPCOM: Sean Hayes Speech on Second Screen Legal Issues Reported in MIPCOM News October 9, 2013 Sean Hayes will be Speaking at MIPCOM on Second Screen Legal Issues You can visit MIPCOM’s website here. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. [email protected]

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Contracts Necessary for Doing Business with a Korean Company?

If you would like to avoid Korean court expenses and headaches related to your business in Korea, please do yourself a favor and have you Korean contracts drafted by an experienced Korean professional prior to doing business with a Korean company We handle litigation and arbitration matters for many clients that have either used a Korean attorney without adequate experience in Korea or that have foregone the use of an attorney in favor of form contracts they find on the internet or via an attorney with no experience in Korea. The litigation matter is, often, complicated because of these, too often, poorly drafted agreements and lack of some basic clauses that would add protections for a non-breaching party. Any client that pleads that the fee to draft these Korean contracts are too high or that they will just download a form agreement from the internet is immediately sent the following.

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Foreign-Capital Invested Companies in Korea Subsidies for Employing New Workers in Seoul, Korea

The Seoul Government has issued the following official notice in order to inform foreign-capital invested companies of a program to partially subsidize the wages of newly hired Korean employees. We have recently advised clients eligible for this program in our quarterly legal update.  We have also advised on the numerous other new tax holiday, incentive, and other programs available to foreign businesses operating in Korea and will be posting some of these updates on this blog over the next couple of weeks.  We think this program is immediately useful for many of the readers of this blog.  Please promptly apply for the benefits and we highly recommend learning more about the numerous other benefits available to foreign-capital invested companies in Korea. The following is the Official Notice issued by the Seoul Government. ___________________________________ Notice No. 2011 – 1289 Seoul Metropolitan Government (SMG), under the Seoul Metropolitan Government Ordinance on Support

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Korean Price-Fixing Law: Defining the Relevant Market in Korea Antitrust Law

The Seoul High Court (2009 NU 1930, May 19, 2010) has overruled a decision of the Korean Fair Trade Commission (KFTC) in a case concerning price-fixing by luxury car importers. The KFTC has appealed the this pivotal price-fixing case.  We shall update the reader. The High Court ruled that a price-fixing arrangement (restriction on discounts from MSRP) between Lexus car dealers was not an “unfair collective act” under Monopoly Regulation and Fair Trade Act Art. 19 (1) thus overruling the decision of the KFTC that imposed a fine and ordered the dealers not to engage in the price-fixing arrangement. The KFTC has also imposed a fine on other luxury car importers. The KFTC opined that the relevant market was the market for the particular car and not the entire car or luxury car market. Thus, the Commission ruled that the act restrained trade absolutely within the relevant particular car luxury

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Korean Labor Law Checklist for Employers and Employees

The Korean Ministry of Labor created this list with revisions by Sean Hayes and IPG.  I will update the list periodically. The checklist is intended for all employers that employ five or more workers. The list contains many generalizations, thus, don’t take this as the end all list.  I suggest, also, clicking on the label to the right entitled Korean Employment Law.  Please note that Korea’s Labor Law is evolving rapidly, thus, this list may not reflect recent changes.   KOREAN LABOR STANDARDS ACT A Korean company should conclude a labor contract with every worker whom it directly employs. An employer, when concluding a labor contract, should clearly state terms of employment prescribed by the act. (Fine up to 5 million Won) An employer ordinarily, employing ten workers or more, should prepare rules of employment and submit them to the Ministry of Labor. (Civil fine up to 5 million Won) An

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