New Provisions regarding the Korean Act on Reporting and Using Specified Financial Transaction Information

The Amendment to the Act on Reporting and Using Specified Financial Transaction Information of Korea (hereinafter as “Amended Financial Transaction Information Act of Korea”) focuses on strengthening Korean legal provisions related to money laundering as well as implementing a “global standard” proposed by the Financial Action Task Force on Money Laundering. The Amended Financial Transaction Information Act of Korea shall enter into force on July 1, 2019. Major provisions of the Korean Act on Financial Transaction Information The purpose of

Continue reading

National Database of Training Programs for Overseas Medical Service Workers in Korea

The National Assembly of the Republic of Korea recently passed the bill Amending the Act on Support for Overseas Expansion of Healthcare System and Attraction of International Patients (hereinafter as “Amendment to the Act on Overseas Expansion of Healthcare”), which major goal is to establish and operate a national database of medical training programs for foreign medical service workers. The Amendment shall be in force at the end of 2019. History of the Korean Act on Overseas Expansion of Healthcare

Continue reading

Amendment to Korea’s Occupational Safety and Health Act in 2019

The amended Occupational Safety and Health Act of Korea (hereinafter as “OSHA”) entered into force on January 15, 2019. One major aspect of the revision is that it has raised the risk of liability of representatives of institutions and companies and companies for workplace industries in Korea. The amended Korean OSHA law is expected to increase the risk to company management, increase liability of companies and increase options for employees that are perceived to have been harmed because of the

Continue reading

Succeeding in Business in Korea

Since 1977, I have observed the rise and fall of many foreign companies in South Korea. I have witnessed the trials and tribulations as a bank employee, a high-tech salesman, a country manager and as a business consultant of foreign and Korean companies doing business in Korea . Bluntly speaking, while some foreign ventures have had some unlucky breaks, those companies that have succeeded in the Korean market have done so for good reasons.  And those who have failed have done

Continue reading

Safety Measures in Korean School Buses in Korea via the Amended Road Traffic Act of Korea

The Amendment to the Korean Road Traffic Act (hereinafter as “ Korean RTA”) is in force since March 2019 and shall generally increase the safety for children in school buses in Korea. The Amendment was a reaction to an accident that occurred with in school buses, including children, which got physically harmed or even died. An infamous incident involved a young child that left unattended in a bus and died because of, among other things, heat exhaustion. Korean RTA drastically

Continue reading

Korean Act on Special Cases Concerning the Establishment and Operation of Internet Banks

In September 2018 the Korean National Assembly passed the Korean Act on Special Cases Concerning the Establishment and Operation of Internet Banks (hereinafter as “Act on Internet-Only Banks”), which is in force since January 2019. The major facial intent of the Act on Internet-Only Banks is to “…encourage innovative enterprises to enter the financial market while laying the legal framework for the convergence of information and communications technologies (ICT) with financial services, and the creation of new economic growth drivers.”

Continue reading

Corruption in Korea: What is the Crux of the Problem? by Tom Coyner

Whenever I read a news item regarding Korean corruption, I have mixed feelings. Usually the article is based on the latest finding by a well-meaning NGO that focuses on corrupting influence of big business on government without adequately addressing the root causes or even the breadth of corruption. Korean corruption doesn’t limit itself to envelopes and car trunks of cash being paid by business people to government officers. *The following article is a re-posting of an article by Tom Coyner. 

Continue reading

Piercing the Corporate Veil in Korea: Suing Shareholders of a Corporation

It is possible, in some situations, for shareholders to be sued for the acts of a corporation.  The concept is called “piercing the corporate veil.” The Supreme Court of Korea has noted that the corporate veil may be pierced and a shareholder may be sued: “Where a company maintains the external appearance of a juristic person while it merely takes the form of a juristic person and, in substance, it is equivalent to other person’s private enterprise behind the corporate

Continue reading

Building Systems Before JVs in Korea to Build Trust between Partners

A blog referred to me by the China Law Blog has a wonderful post on Developing Trust in China by Building Trustworthy Systems/Processes.  The same advice given in this blog post is relevant to work done in Korea, Southeast Asia, China and even the West.  We believe that the verification of the developing and implementation of these system is, often, necessary before building a joint venture relationship with a Korean company. The value of building systems is not to be

Continue reading

Contract Drafting in South Korea

The following post considers some of the basics of contract drafting in South Korea. The following post is meant to be, only, a basic explanation of the basics of a good Korean contract based on a few observations. This post is not meant to be an exhaustive explanation of this issue, books have been written on contract drafting and we will not be drafting a book with this post. The main purpose of drafting a contract is to avoid a

Continue reading

Minority Squeeze-outs in Companies in Korea

The amended Korea Commercial Code of 2012 allows majority shareholders with 95% of the shares of a company in Korea, to purchase the shares of the minority for “fair value.”  Thus, allowing a statutory means under Korean Law to squeeze-out a minority shareholder. Fair value may be determined by the court if the parties are unable to reach an agreement within 30 days of a request by the majority shareholder to purchase the shares of the minority. We advise that

Continue reading

“Probationary Periods” in Korean Employment Contracts for Newly-Hired Workers

Korean companies should consider negotiating stipulations to create “probationary periods” at the start of employment to train and assess newly-hired Korean workers. Often companies wish to evaluate workers over a set period of time after concluding a labor contract to assess the worker’s abilities and intelligence, and to allow the worker time to gain familiarity with the work.  This period of employment is called a “probationary period.” The practice is relatively unregulated by the government. The Labor Standards Act of

Continue reading

Korea’s Improper Solicitation & Graft Act?: Scope of Application

The Scope of Application of the Improper Solicitation and Graft Act of Korea (“Graft Act”) was a hotly contested issue that led to Korean court challenges.  The Constitutional Court of Korea has upheld the Graft Act of Korea.  More details, including a list of articles on the Graft Law of Korea, may be found at: Improper Solicitation & Graft Act of Korea. The Scope of Application is defined in Article 2 & Article 11 of the Bribery Act.  The Act

Continue reading

Fiduciary Duties of Korean Directors/Representative & Controlling Shareholders of Korean Companies

Directors of companies, registered in Korea, many be held criminally and civilly liable for acts as a director (in limited cases even controlling shareholder can be held criminally liable).  Many acts (or inactions) that would not be deemed criminal in the West are, often, deemed criminal in Korea.  Additionally, matters that are considered in the West as mere “civil” matters, often, begin and end at the Korean prosecutor’s office. A little due diligence, complying with corporate formalities, nuanced corporate governance

Continue reading

Korean Compliance Checklist for your Business in Korea

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 preformed – if you have not completed a compliance audit of your Korean business in the past or recently.   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

Continue reading

Choice of Law Issues in Employment Disputes in Korea

Choice of law/jurisdiction issue often arise in Korea when an agreement chooses a law/jurisdiction for resolution of a dispute other than Korea, internal conflicts in the agreement exist (yes this happens) or no choice of law/jurisdiction clause was chosen and the agreement seems to be better handled by a foreign court, or by the law of the foreign jurisdiction, because of, inter alia, the locale of witnesses and the subject matter of the agreement. Choice of law/jurisdiction issues are governed in

Continue reading

Korean Business Culture vs. Western Business Culture Explained by IPG Attorneys

We, often, have clients that proclaim that they can’t understand the way that Koreans do things.  They complain about an inability to reason, keep promises, express opinions and give a straight answer. Koreans have plenty of complaints about Westerners also.  Koreans, often, complain that Westerners concentrate too much on details and not enough on the big picture, care about money more than friendship and focus too much on efficiency. The root of these issues is vastly different cultural realities. Korean Business

Continue reading

Involuntary Dissolution of a Company in Korea: Shareholder Disputes in Korean Companies

Under Article 520 of the Korean Commercial Act, a minority shareholder, holding at least 10 percent of the total and outstanding shares of a Korean company, may request to the Korean court of competent jurisdiction the dissolution of a company in Korea.  Korean court judges consider this procedure an extraordinary procedure and, only, rule in the affirmative, usually, after all other avenues to resolve the shareholder dispute have failed. However, this procedure is useful, in many disputes, in resolution of

Continue reading

Can you Succeed in Korea without Resorting to Bribery?

Perhaps in a few warped ways, I have a bit of affection for the Foreign Corrupt Practices Act, which bars American companies from bribing officials overseas. From a nostalgic perspective, I recall when this act was made into law while I was at my first “real job” at The Chase Manhattan Bank in Seoul. The immediate reactions around me in the US business community were those of dread. We were certain that we would be put to disadvantage when competing

Continue reading

Korea Blockchain Law Society Founded: Korean Crptocurrency Law Updates

The inaugural meeting of the Blockchain Law Society of Korea was held last week.  We wrote on the Korean Law Blog articles on Korean Blockchain/Alt Currency Law and shall be participating in the Blockchain Law Society and updating the reader on issues addressed by the Blockchain Law Society.  You shall find more articles on Blockchain, Alt currenices, Korean Crypto-currency Law and like topics on this blog over the next couple of months. We are looking forward to more lively discussions and

Continue reading