How Foreign Companies and Individuals can Collect Debts from Debtors in South Korea?

Many foreigners, both companies and individuals, seek our advice on how they can effectively collect debts from debtors with assets, businesses and/or residences in Korea. The following article details the major means of collecting on a debt in Korea. Collecting a Debt in South Korea from a Korean Debtor Hire an Experienced English-Speaking Korean Law FirmIt is crucial that you hire a Korean law firm with experience in collecting on

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Provisional Attachments of Assets in Pending Litigation in Korea Courts

A party attempting to collect on a debt or potential liability based on breach of contract or torts in Korea may obtain a Provisional Attachment of an Asset. Another useful tool to expedite proceeding in a Korean civil matter is to Obtain a Payment Order from a Korean Court.  A provisional attachment is considered provisional, since the attachment is executed prior to the final judgement. The, facial, purpose of a provisional

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Korean Commercial Liens versus Korean Civil Liens

Korea, in short, has two major types of liens – Commercial Liens and a Civil Liens.  For example, in a dispute between a contractor and a landowner or developer, a contractor make execute a Commercial Lien or Civil Lien.  A Commercial Lien is governed by the Korean Commercial Code while a Civil Lien is governed by the Korean Civil Code.  I shall for ease, utilize the contractor and landowner (developer)

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Arrest/Attachment of Ships at Korean Ports: Maritime Liens in Korea

The arrest of vessels/ships in Korea is a common tool to satisfy judgements against debtors.  Korean courts allow the ex-parte arrest of ships.  The court, normally, does not request from the Korean counsel of the creditor/claimant evidence of how long the ship will remain in Korean waters, as is, sometimes, the case in other neighboring jurisdictions. We find Korea to be a much easier destination for arresting vehicles than many

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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

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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

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7 Musts to Succeed in Business in Korea

We have the unique pleasure to have a bird’s-eye view of numerous clients’ businesses in Korea.  At this stage of our experience in Korea we are, typically, able to determine which companies will, likely, succeed and which companies will, likely, fail.  We are far from perfect, but companies that succeed in Korea, normally, have the following seven things in common: 1.  Comprehensive Understanding of the Korean Market by a Neutral

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Wills, Trusts, Pre-Nuptial Agreements, Living Wills, and Power of Attorneys in Korea

We receive numerous calls requesting the notarization of wills, living wills, general and specific power of attorneys, prenuptial agreements and other like agreements and documents in Korea. These documents are, often, just pulled from the internet.  Pulling these documents from the internet is not adequate – in most cases. We, sometimes, notarize these agreements for clients, however, in most cases we refer the client to their local embassy in Seoul,

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Enforcement of Arbitral Awards in Korean Courts: Arbitration Law Basics

After an arbitration panel outside of Korea renders an arbitral award against a Korean company or individual, typically, if the non-prevailing party lacks assets outside of Korea or the prevailing party needs to enjoin acts in Korea, the prevailing party chooses to enforce the arbitration award in Korea.  Enforcement is not as easy as just giving arbitral awards to non-prevailing Korean parties.  For enforcement of foreign judgments in Korean courts

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Tax Liability of Controlling Shareholders in a Korean Company: Tax Law Updates

Under Article 39 of Korea’s Framework Act on National Taxes, unpaid taxes owed to the Korean government are enforceable against certain “ologopolistic” shareholders of respective debtor company’s shareholder.  This secondary liability of shareholders is codified within the Framework Act on National Taxation.  Article 39 of the Framework Act on National Taxes, specifically, notes that: “Where the property of a corporation is not enough to pay national taxes, additional dues and

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Privity of Contract in Franchise Agreements in Korea: Korean Franchise Law Updates

Normally, in Korea, a contract/agreement cannot confer rights nor impose obligations upon a person who is no a party to the contract/agreement.  One interesting case, in franchise law, applied this principle to the benefit of the franchisor and the detriment to a supplier.  A Supplier delivered food through a Distributor to a Franchisee based on a franchisee requirement iterated in a franchise agreement with a franchisor.  The case brings to light, also, the

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Debt Collection Cases in Korea on the Rise: Buyers and Sellers Beware

My firm has noticed a sharp increase in the number of requests for the debt collection services of my team. One of these cases involves an unpaid invoice from a British company to a Korean wholesaler for over USD 700,000. The British company was duped by a small paid invoice which was quickly followed by an unpaid large invoice. Of course, the Korean company (not a company –one guy and

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English-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law

IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive  and unconflicted representation. Our attorneys are, intentionally. different from the crowd.  From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand

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A Franchisor may be Unable to Prosecute a Franchisee for Embezzlement in Korea

Article 355 of Korea’s Criminal Act defines embezzlement as: “a person who, having the custody of another’s property, embezzles or refuses to return the property shall be punished by imprisonment for not more than five years or a fine not exceeding fifteen million won.” In a landmark case in Korea’s Franchise Jurisprudence, the Supreme Court ruled a franchisee may not be held criminally liable for embezzlement for “arbitrary spending of

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Execution/Enforcement of American, European & other Nation Court Judgments in Korean Courts

Question:  I have a final judgment against a Korean individual from a New York state court.  How can I enforce this judgment in Korea against this Korean individual? Korean Central District Court. Answer: A foreign judgment, in Korea, can be executed based on meeting the requirements of the Civil Execution Act of Korea and Civil Procedure Act of Korea.  The relevant provision are Article 26 and Article 27 of the

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Will the Korean Government Kill Bitcoin? The legality of Bitcoin in Korea

Local Korean vernaculars have reported that Bitcoin and other “Alt Coins” are to be investigated by the Bank of Korea, Korea’s Prosecutors Office and other government agencies. It is alleged by some in the Korean government that these crypto-currencies may be nothing more than Ponzi or Pump & Dumb Schemes.  While, others, proclaim these currencies are at the foundation of freedom and they help to fight inflation imposed by central

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Korea New Exchange (KONEX) Basics

The Korean Exchange (KRX) established, on July 1, 2013, an SME only-listed securities market with the, facial, purpose of providing a new avenue for SMEs in obtaining assets for investments.  A KONEX-listed firm with capabilities to list, at a later date, on the KOSDAQ or KOSPI may, also, benefit from a stream-lined procedure to list on the KOSDAQ or KOSPI.   Korea’s capital markets have been, strongly, criticized for not providing

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Credit Rating Agencies in Korea: Due Diligence of Your Supplier, Franchisee, Joint Venture Partner & Distributors

Korea has established four credit rating agencies.  The four agencies are: National Information & Credit Evaluation (NICE); Korea Investor Services (KIS); Korea Ratings (KR); and Seoul Credit Rating & Information (SCRI). Some reports provided by these rating agencies are provided in English.  However, many of the English reports are not complete.  Thus, it is advisable to make sure if you have an English version of a report that it is

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Collecting a Debt in Korea: Payment Orders are your Friends

We receive many emails concerning our collection services and this answer is an answer that I give for most collections matters involving debts with debtors that appear solvent. 1. Obtain a Payment Order & Send a Demand Letter (지급명령) A Payment Order Complaint is filed to the court and this complaint, if accepted by the court, is served on the debtor-defendant.  If the complaint is not answered in 14 days by

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Korea Contracts Don’t Forget the Counter-party: Due Diligence before Executing an Agreement in Korea

We see numerous matters coming before us from parties in the States or Europe that are importing a product from a Korean company.  Of course, the products are either faulty or never come. We, also, see cases where a Korean company is importing a product and the importing party ends up not being the party that the American or European company thought they were doing business with. Also, often, companies

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