No Court Apprasial Necessary in Korea for In-Kind Contribution to Company

The Presidential Decree of the amended Korea Commercial Code notes that an appraisal by the Korean courts is no longer necessary when issuing equity stocks in exchange for an in-kind contribution in a company if: 1.  The amount of the in-kind contribution is less than KRW 50,000,000 and accounts for less than 20% of the entire equity of the company;2.  The value of the in-kind contribution is less than the book value listed in the balance sheet of the issuing

Continue reading

Importing and Selling Wine in Korea Just got a Little Easier

The Korea Times has posted an article about changes in the Korean wine market because of changes in Korea’s distribution law and the implementation of free trade agreements with the United States and the European Union .  We have seen more interest from major wine producers in the Korean market and we expect to see a few of the major players in the market enter the market soon.  The Korea Times notes that: Korea’s wine boom peaked in 2008 when

Continue reading

Understanding the Korea-U.S. Alliance by Tom Coyner

Given that it has been almost a year without significant anti-American demonstrations, this may be a good time to disclose some surprising realities in United States-Korea relations. Otherwise, in the heat of future demonstrations, the following could be misconstrued as some kind of knee-jerk defense by an American. So, allow me to try to set up and knock down some misconceptions about the South Korea-U.S. relationship. Myth: Anti-Americanism is a significant force within the Korean political and social environment. Reality:

Continue reading

Korea’s Starting a Company in Korea: Read:Economic Forecast by the European Chamber of Commerce in Korea and SERI

The European Chamber of Commerce in Korea published a great article by Mr. Chang-mok SHIN of the Samsung Economic Research Institute.   The article is very useful for companies wishing to establish an business in Korea and have based their feasibility study on less reliable forecasts.  SERI is not perfect, but they tend to be neutral and candid.  Mr. Shin predicts, in short, that: Korean Growth Rate in 2011 will be 3.6%.  This “low growth”  rate will be caused by the

Continue reading

Maximize Benefits of Korea’s FTAs with U.S. and EU via Legal and Business Consultants in Korea

IPG Legal is happy to announce the formation of the first team of professionals dedicated to providing clients advice and representation on how to maximize the benefits of the KORUS and KOREU FTAs for EU, U.S. and Korean companies. IPG has compiled a team of Korean and international attorneys, senior company executives, patent attorneys, accountants, recruitment professionals, business consultants, custom agents and other professionals to provide services to American and EU companies doing business in Korea under the KOREU and

Continue reading

FTC of Korea: All Bark and No Bite?

The Korea Times published an article, last week, on Korea’s Fair Trade Commission (FTC) that sheds light on a business and, also, consumer-friendly program offered by the FTC. The FTC has been, strongly, criticized by the main-stream for using the powers of the Commission to fight inflation in Korea in order to appease the Administration and the citizens.  Some of the most liberal, now, are even claiming that the FTC is not going far enough.  The FTC has no friends

Continue reading

Beware the Grey Market Trap in Korea: Due Diligence, Agreements and Street Smarts

Many of my clients operate, in Korea, through relationships with agents. The local agent, normally, holds an exclusive right to sell the client’s product in Korea. For example, one of my clients sells medical lasers. The company has relationships with agents throughout Asia. The relationships guarantee the agent an exclusive right to sell the lasers in the nation the agent is located in. The agent, also, is responsible for managing technical, warranty and other after-sale matters in the jurisdiction. One

Continue reading

KOR-US FTA Passed the Korean National Assembly Today

Great News. The Korea-United States Free Trade Agreement (KOR-US FTA) passed the Korean National Assembly today. The Agreement, previously, was passed by the U.S. Congress. The Agreement will be implemented on January 1, 2012. I will write more on the specifics of the Agreement over the next few [email protected]

Continue reading

Acquiring Shares in Closed Korean Corporation in Exchange for Product at Discount: Don’t Forget the Due Diligence in Korea

I just received a phone call from a prospective client with a wonderful product that has been offered a sweetheart deal.  Whenever I hear that someone has received a no risk or sweetheart deal in Korea, a red flag immediately goes up in my head and I immediately request the client to let me do a couple of weeks of due diligence. The, ubiquitous, sweetheart deal is ownership of shares in company in exchange for some benefit from the foreign

Continue reading

Korea: “Connected Yes, Competitive Maybe.” Korea – Beware of the Dragon to the North.

Sang-Hun CHOE posted a great article in the New York Times quoting IPG’s Senior Commercial Advisor Tom Coyner in an article entitled – Connected Yes, Competitive Maybe. Mr. CHOE emphatically notes that: But being hyper-connected is not the same as being hyper competitive. Connectivity on its own does not bring productivity or happiness. It does not necessarily even bring foreign investment. And for all its positives, Seoul’s connectivity comes with some downsides. For starters, the city is home to the

Continue reading

Selecting The Right Korean Partner by Tom Coyner

Most foreign companies in Korea, for practical reasons, must partner with a local company to market, sell and support their products and services. While once upon a time there were legal requirements to do so, now Korea has a relatively free market in this regard. Nonetheless, unless the foreign company is willing to make a very substantial investment up front, it almost always makes sense to partner. Frankly speaking, finding a Korean partner company can be ridiculously easy. Finding a

Continue reading

Dealing with Unions in Korea: The Top 14 Do’s and Don’ts

By Tom Coyner Korea, the Land of Perpetual Crisis, is facing yet another crossroads — this time in Korea the focus is on renewed challenges facing manufacturing. The weakening Japanese yen together with the growing strength of Chinese manufacturing, not to mention rising costs of Korean labor, is placing Korea once again as the proverbial shrimp positioned between the two whales. In fact, to a large degree, the real growth of Korean manufacturing is taking place in Korean-owned facilities outside

Continue reading

Limited Liability Companies under the Amended Commercial Code of Korea

Yuhan Hoesa is a form of a company in Korea similar to a western Limited Liability Company.  It has only been utilized, to date, by small privately held corporations and some financial companies under the Korean Asset-Backed Security Act, Korean Capital Markets Act or the Financial Investment Services Act. The revised Korean Commercial Code (KCC) allows for the more efficient and effective utilization of the Yuhan corporate entity.  I will be advising the use of this company form for some of

Continue reading

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

Continue reading

Korea Due Diligence: Not So Different From China

Steve Dickson wrote a great article entitled China Due Diligence. Not Optional – that I will steal and copy at length. His article appears on the China Law Blog. The blog is a must read for all doing business in China. Most companies are not aware that due diligence is required whenever you do any kind of business with a Chinese company. If you do not already know the Chinese company with which you will be conducting business, you must

Continue reading

Resolving Korean Joint Venture/Partner Disputes without an Attorney — Maybe

Conflicts are inevitable, but not unresolvable. Since the circumstances surrounding Korean JV/partner conflicts can vary greatly and since the personalities of the involved parties play a major role in the confrontation, there may not be any ready-made prescription for the solution. There are however, some general ideas that may help in resolving conflicts in the local business environment. Personal ConsiderationsWestern logic, alone, is not usually sufficient to influence a Korean counterpart. Re-opening or referring to the exact stipulations of a

Continue reading

A monkey on my back (Korea Times by Sean Hayes)

Korea ranks behind many of its developed and less developed Asian neighbors in many major economic freedoms and indices. The major monkeys on the back of the Korean economy, according to some surveys, include restrictive trade policies, a bloated bureaucracy, high tax rates, and over regulation of credit, business, labor and whatever else the bureaucracy thinks it can get its hands on. These indices are a useful guide for businesses considering entering the Korean market, however, they must never be

Continue reading

Korean Joint Ventures: Bare Essential of a JV in Korea

A client, a minority shareholder in a foreign-capital invested company in Korea is involved in litigation with other company shareholders over issues the client had with the majority and other shareholders. The majority shareholder (controls the representative director) has been helping himself to the company profits through liberal expensing and interested transactions with the company and his personal company. The majority shareholder is also threatening to block distributions and is possibly increasing the stickiness of his fingers. Like situations WILL occur

Continue reading