Korea Due Diligence for Joint Ventures, Licensing, OEMs and Buying a Korean Company

Intending to execute a joint venture agreement with a Korean company? Buying a Korean company? Licensing technology to a Korean company? OEM with a Korean supplier? Selling to a Korean company?Before going to bed with a Korean company (or individual) do a little due diligence.  The motivation for this article is an article by my friends over at the China Law Blog. Due diligence in Korea is not much different than due diligence in China.  However, don’t forget what is

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Starting a Manufacturing Business in South Korea: Top 14 Things to Know Before you Start a Business in Korea

Korea, in most cases, is a much better choice for the manufacturing of chemical, petroleum, construction equipment, complex crafted metals, specialty steel, automotive parts, semi-conductor, medical and pharmaceutical equipment and goods than China and most nations in Asia, because of Korea’s skilled work force, government incentives and increasingly transparent business practices. In many cases, manufacturing in Korea will not, in the end, be more costly than manufacturing in China, because of the increased efficiency of Korean workers and the, often,

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Distribution Agreements in Korea: Crawl before you Walk

Prior to going into any relationship with a distributor/agent in Korea, please read my post entitled: Finding a Korean Distributor: The Top 10 Things to Know Before Going to Bed with a Distributor in Korea. Please read that post in combination with this post, prior to engaging a distributor in Korea. We see too many Korean distribution and agency agreements that are mere spun U.S. or European agreements.  Please have your Korean distribution agreement and all agreements you have in Korea drafted

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Distribution Agreement in Korea: Factors to Always Keep in Mind

Prior to going into any relationship with a distributor/agent in Korea, please read my post entitled: Finding a Korean Distributor: The Top 10 Things to Know Before Going to Bed with a Distributor in Korea. Please read that post in combination with this post, prior to engaging a distributor. We see too many distribution agreements that are mere spun U.S. distribution or agent agreements. Please have your distribution agreement and all agreements you have in Korea drafted by an experienced

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Non-Registered Company Director (Executive Director/Senior Managerial Worker) in Korea deemed Employee under Korean Labor & Employment Law

Article 27 of the Labor Standards Act of Korea stipulates that all “employees” must be notified in writing of the reason for dismissal.  In most cases, 30-days notice or 30-days pay in lieu of notification is required.  Employees may, also, only, be terminated for “fault attributable to the employee” or “urgent managerial necessity.”  The burden is on the employer to prove “justifiable grounds for termination.”  All good proactive employment lawyers in Korea have detailed programs in place that assist in justifying

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Korean Workplace Discrimination Laws

There are numerous Korean labor and employment laws that prohibit employers from discriminating against their employees in a Korean workplace. These Korean workplace discrimination laws are found in a myriad of Korean statutes and regulations. This article on Korea’s discrimination laws shall provide a quick guide as to where employers and employees can locate the basic requirements under law. The major pieces of legislation are the following: the Korean Labor Standards Act; the Korean Equal Employment Opportunity Act; the Korean

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How to Invest in Korean Free Economic Zones (KFEZs): Korean Market Entry

Korean Free Economic Zones (KFEZs) are specially designated areas designed to improve the business and living environments for foreign firms looking to invest in Korea. In 2003, Korea’s very first KFEZ was launched in Incheon following the passing of the adoption of the “Act on Designation and Management of the Free Economic Zones.” Since then an additional seven have begun operation, bringing the grand total of KFEZs in Korea to eight. Companies with business in KFEZs are eligible for tax

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Korean Smart City Opportunities for Foreign and Domestic Companies Doing Business in Korea

The Korean government’s “2020 Smart Challenge” is officially rolling out with the Act on the Promotion of Smart City Development and Industry of Korea. The Act is coming into effect on Feb. 27, 2020. The Korean government is, specifically, launching three separate projects called: Korean City Challenge Open to large, SMEs and startup companies. Intended to encourage creative and technological solutions to problems in cities. Smart-mobility may be a large focus of the governments initiative. Korean Town Challenge Open to

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Korea prepares itself for Big Data-driven 4th Industrial Revolution: Korean Data Protection Laws Revised

On January 9, 2020, the National Assembly of Korea passed the “Three Data Act” of Korea. Implementation of the Act shall begin in June of 2020. The Korean Three Data Act iterates protections for, in general: personal information; information and communication; and business & individual credit information. IPG shall be writing more on this data protection issue over the next couple of months, please check back for more details. Three Data Act of Korea According to an article entitled the

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52-Hour Workweek Delayed in Korea for SMEs: Korean Labor Law Update

The Korean government delayed the implementation of the 52-hour workplace system for certain small and medium size companies. This System is intended to apply to all companies in Korea and mandates that no employee may work for an employer for more than 52-hours in any one week. The Ministry of Employment and Labor of Korea announced, on December 11, 2019, that the 52-hour workplace system is suspended for SMEs (Employers with less than 300 workers) until the end of 2020.

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Korean Waste Control Act Amendments of 2019

As a reaction to several accidents in waste storage facilities, the Korean National Assembly passed an an Amendment to the Korean Waste Control Act on March 28, 2019. The amendment puts in place, a more transparent measures and rules for waste-storage facilities. Major Amendments to the Korean Wastes Control Act Set of safety measures for waste-collecting vehicles. More specific safety rules for waste-storage facilities. Implementation by the Korean Ministry of Environment to conduct an annual safety inspection and survey on

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Korean Data Privacy Act: Need for Compliance Audit for your Korean Company

The European Union General Data Protection Regulation (EU GDPR) focuses on the data security of personal data of users of the internet. As the EU offers a potentially lucrative market for online businesses for many Korean companies, South Korea was eager to amend its existing Act on the Promotion of IT Network Use and Information Protection of Korea (“Korean Network Act”) based, at least, partially on bench-marking of the EU GDPR. We suggest all companies, doing business in Korea, conduct

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Minimum Wage Raised in Korea for 2020: Employment Law Updates

South Korea has chosen to raise the minimum wage by 2.9% for 2020 to KRW 8,590 (c. USD 7.11).  The Minimum Wage Commission of Korea set the wage at a lower than expected increase because of deteriorating economic conditions in Korea. President Moon’s plan to raise the minimum wage to KRW 10,000 per hour shall fall short, because of, among other things, a slower than expected growth rate and regional geopolitical issues facing Korea.  We shall keep the reader updated

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Korea Amends the Act on the Employment, etc. of Foreign Workers in 2019: Employment Law Updates

Amendment to the Act of the Employment, etc. of Foreign Workers in Korea (hereinafter as “Amendment to the Act of the Employment of Foreign Workers” of Korea) was proposed by the Korean Environment and Labor Committee in December 2018. The focus of the Amendment of the Employment of Foreign Workers is on the improvement of the living conditions of foreign workers at dormitories provided by their companies. Major Changes Due to the Amendment and the Struggles on the Way Addition

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Amendment to Korea’s Intellectual Property Registration System: Korea IP Law Updates

South Korean organizations, companies and startups will, likely, in the near future experience a quicker and increasingly more efficient Patent and Intellectual Property Registration System in Korea and internationally based on developments within the IP5. Top IP officials in Korea are gearing up, in order to help South Korean organizations, companies and startups register their Intellectual Property more efficiently.  It seems like the effort is a serious attempt to expedite approvals and lesson application burdens for those doing business in

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Korea Establishes Legal Grounds for the Commercialization of Autonomous Vehicles – A New Act for 2020

Proposed by the Chair of the Land, Infrastructure and Transport Committee on April 4, 2019, the Act on Promotion and Support of the Commercialization of Autonomous Vehicles (hereinafter as “Korean Act on Autonomous Vehicles”) aims to set forward legal grounds and a legal framework for projects of domestic and foreign companies, who focus on the development of autonomous or self-driving vehicles with the goal of the successful commercialization in Korea and abroad. The aforementioned Act shall become effective one year

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Terminate/Layoff an Employee in Korea: Terminating an Employee in Korea

The Korean Labor Standards Act mandates that employees under “contract” or “regular employees” may only be terminated for “justifiable reason attributable” to the employee or “urgent managerial necessity” after the completion of the employee’s probationary period. Both Korean employment law standards are, often, difficult for an employer to meet without the professional structuring of HR policies and procedures and a nuanced approach to termination of employees in Korea. We strongly recommend, prior to even considering firing or laying off Korean

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Korea Focuses on Greater Control over Imported Food – Amendment to the Special Act on Imported Food Safety Control 2019

The Special Act on Imported Food Safety Control was recently amended and shall strengthen the on-site inspections of foreign establishments, which already export food to Korea, as well as those, which apply for registration of the importation of overseas food. The Amendment was proposed in early April 2019 and shall become effective upon promulgation. We expect substantially heightened risk for importers and an increase in the price of many imported goods. Major Provisions of the Korean Amendment to the Special

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The Amendment to the Korean Pharmaceutical Affairs Act 2019

The Korean Pharmaceutical Affairs Act (hereinafter as “Pharma-Act”) was proposed by the Chair of the Health and Welfare Committee of Korea on December 27, 2018. The Pharma Act shall adds more cumbersome regulations on the foreign qualifications of pharmacists, increases the limits of penalty surcharges and shall change the system to transfer a Korean pharmacy businesses. This Amendment shall become effective in July 2019. The major amendments are detailed below. Key Highlights of the Korean Amendment to the Pharmaceutical Affairs

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Korea Increases the List of Serious Crimes in the Act on Regulation and Punishment of Criminal Proceeds Concealment

The Chair of the Legislation and Judiciary Committee in Korea proposed an Amendment to the Korean Act on Regulation and Punishment of Criminal Proceeds Concealment (hereinafter as “Act on Punishment of Criminal Proceeds Concealment”) on April 4, 2019. Some crimes shall be added to the list of “serious crimes” stated in the aforementioned Act. Amendment to the Act on Punishment of Criminal Proceeds Concealment The list of “serious crimes” (also “specific crimes”) as defined in Art. 2 (1) Korean Act

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