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, since the embassy stamp has a far less chance of not being recognized in a foreign jurisdiction than a Korean notarial stamp.  We, often, also, advise a redraft of the document. This post was not written to tell you not to call me about notarial issues (actually don’t contact me about notarial issues unless your nation does not have an embassy in Korea- contact your embassy), but to be aware that many of the agreements and documents that I have

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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 the nexus between your commercial and legal needs. Our attorneys shall never push to you useless memos, non-nuanced legal advice or get you into litigation without an honest assessment of the merits and shortcomings of the matter. We are  – intentionally different from the crowd.  Globally Experienced – Locally Connected.  We are IPG.  Korean Legal Practices Korean Antitrust, Competition & FTC Arbitration, Int’l & Domestic Korean Civil Litigation Korean Criminal Defense Korean Corporate Law & Compliance Korean Employment, Labor &

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Guardianship Law in Korea: The Lotte Family Conservatorship Saga Continues

With news late in 2016 that the Seoul Family Court Appointed a Law Firm as Legal Guardian for Shin Kyuk Ho, founder of Lotte Group, and the negative effect the ruling had on his elder son’s efforts to regain control of the conglomerates, it is a good time for business owners and their families to understand what guardianship law may mean for businesses and families in Korea. Guardianship Law in Korea The Adult Guardianship Act of 2011 of Korea in the main law, in Korea, creating a Guardianship/Conservatership System in Korea. Under the Guardianship Act of Korea, a family court, in Korea, may declare a person to be legally “limited-incapable” if, as a result of, inter alia, mental illness or disability, a person lacks the mental capacity to make his or her own decisions or will jeopardize the livelihood or their family’s livelihood in he or she does make decisions

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Korean Trust Act of 1961 Amended

The 1961 Korea Trust Act has been criticized as being an archaic law that does not reflect generally accepted international trust standards and practices.  The revised Korean trust law was passed to alleviate many of the problems of the old Korean Trust Law.  The new law in Korea will came into effect in July of 2012.  This post is a revised version of a post that was first posted in 2012. The most significant changes to Korea’s Trust Act are listed below. The new Korea Trust Law allows the designation of a settlor as a trustee.  The trustee, however, will be unable to windup the Korean trust and will be required to meet specific formalities when executing the powers as a trustee. The new Trust Law of Korea allows for beneficiary certificates to be issued by the Korean trust. The new Korean Trust Law allows the the trust to issue

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Enforceability of Korean Executed Holographic/Handwritten Wills in Korea

Holographic wills are enforceable in Korea under Article 1066 of the Civil Act of Korea.  Our law firm is, presently, handling a matter concerning the estate of a decadent where the decadent executed a handwritten (holographic) will and the inheritors are Korean and foreign nationals. Holographic Wills This is a common issue for lawyers at our firm to handle – with the exception of the handwritten will issue. We, rarely, see cases, these days, of a testator that has executed a handwritten will.  This, however, was not so rare in the not so distant past. We, highly, recommend not utilizing a handwritten will and having a will formally drafted and executed.  However, in some cases where a testator is near death it may be advisable to execute a handwritten will quickly and, also, quickly, contact an attorney to get a formal will drafted and executed. Article 1066 of the Civil

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Attaching Assets in Korea: Security on Movable Property and Receivables in Korea

The Ministry of Justice has recently announced a draft bill concerning the securitization of movables and receivables. The Bill has been pushed for strongly by SMEs. SME’s have complained, since the 1997 Currency Crisis that they are unable to adequately capitalize at market rates. Representatives of the IMF, that I spoke with a few years back, also were very keen on this type of bill. They believed that this Bill will help foster SMEs and new entrant’s potential for innovation and growth. At present, over 92% of securitized lending is through real estate. The reason stems from the lack of a disclosure system for movables and receivables. The Bill intends to address this issue and solve the problem of SME with adequate raw materials, account receivables, intellectual property, and inventory and no real property. Basic Details of the Act on Security on Movable Property and Receivables (the “Bill”): 1. Grantors

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Proposed Amendment to Real Estate Development Business Act of Korea: Rating of Real Estate Development Projects

In an attempt to avoid additional failures in the Korean real estate market, the Korean government at the end of July 2013, proposed revisions to the  Real Estate Development Business Act of Korea. The revisions would, inter alia,: 1.  Give authority to the Ministry of Land, Infrastructure and Transport (“MLIT”) to select a agency of real estate experts (“Agency of Experts”) to verify private ratings.  The specifics of this Agency of Experts scheme would be designated by a President Decree.  The purpose of the revision is to have an analysis by a true “neutral.”  As in most cases, the devil may be in the details.  2. Officially recognize the practice of the MLIT of delegating responsibilities to local Korean governments.  These delegated responsibilities include issuing real estate registration certificates. We will update the reader if the law passes.  _________Sean Hayes may be contacted at: [email protected] Sean Hayes is co-chair of

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Korean Tourism Infrastructure Improving: Special Act for the Expansion of Tourism Accommodation

The Korean Tourism Organization under the leadership of a German-born non-ethnic Korean is the greatest reason for the increase in the number of tourists in Korea.  The KTO has been transformed from a government black hole into a vibrant organization with a bold vision. One of the most significant issues for tourists visiting Korea, because of the drastic increase in tourism over the past few years, has been the lack of adequate accommodation. Seoul is notorious for having, during peak times of the year, a lack of adequate business class rooms.  The situation is even more dire in many of the more remote areas.  The recent implementation of the Special Act for the Expansion of Tourism Accommodation Facilities is intended to help resolve this issues.  The Act’s most significant benefits includes: Extending the maximum period for a lease of a hotel facility to 30 years from the present five years;

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Korean Home Prices Too Low? A big NO WAY by Tom Coyner

It will soon be that dreaded time again for me – the renegotiation of my apartment lease. Thankfully, it happens just once every two years, but it is a real pain. The silver lining to this biannual cloud is that it forces me to look more closely at the Korean housing market, an important factor in most economic considerations. At first brush, Korean real estate is as loopy as any foreigner may surmise about anything in the Korean economy. First of all, there is a glut of slow-moving, unoccupied apartments – and yet prices remain artificially high. This is partially due to the universal axiom that real estate prices rise much faster than they fall. People naturally welcome seeing investment values inflate and resist recognizing shrinking values.Second, housing costs are kept high, in spite of the vast supply of housing, due to a practice called jeonse, the non-interest-bearing, fully refundable

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Renewal Rights/Terms for Commercial Leases in Korea Under Amended Commercial Building Lease Protection Act of Korea

The Commercial Building Lease Protection Act (“CBLP”) came into force on August 13, 2013.  The amendments, mentioned below, will solely come into force for leases entered into after August 13, 2013.  The changes will assist those with large deposits from getting the boot by a landlord based on no apparent reasons.  Renewal/Terms for Commercial Tenants with Deposits over KRW 300million  (Major Tenants) Under the former CBLP, tenants with deposits of over KRW 300,000,000 (For Seoul) were not protected with the right to renewal of a commercial lease.  The Presidential Decree to the CBLP proscribes who is a “major tenant” based on the location of the space.  A Major Tenant is Seoul is deemed by a Presidential Decree to be a tenant with a deposit of over KRW 300,000,000.  The amount, in many parts of Korea, are significantly lower than KRW 300,000,000. The present CBLP specifics that all commercial leases under

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Environmental Impact Statements in Korea: New Korean Environmental Impact Assessment Regime

In the third quarter of 2012, the amended Environmental Impact Assessment Act (“EIAA”) was implemented.  After the enactment, environmental impact assessments are no longer governed by both the Framework Act on Environmental Policy and the EIAA, thus, eliminating a great deal of confusion caused by inconsistencies in the acts. Major revisions include: 1.  Implementation of Strategic Environmental Impact Assessments and Small-Scale Environmental Impact Assessment over Prior Environmental Review under Framework Act on Environmental Policy The EIAA has abandoned the use of Prior Environmental Review under the Framework Act on Environmental Policy in favor of the often more clear and consistent Strategic Environmental Impact Assessment (“SEIA”) and Small-Scale Environmental Impact Assessment.  However, projects approved before implementation of the EIAA will still be governed by the Prior Environmental Review under the prior act.  The impact of this change is becoming known and it seems like the majority of the proposed “high-level” administrative

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Incheon to Turn an Island into the New Macau: I will believe it when I see it

The Korea Times has reported that Incheon City government has plans to transform two islands into a gambling, leisure and entertainment park larger in size than Macau.  The Korea Times note, in part, that: The large-scale development project, designed to turn two islands inside the Incheon free economic zone into a world-class leisure hub, is expected to cost 317 trillion won ($288 billion) and take about 20 years to complete. Incheon city unveiled a blueprint for the envisioned leisure complex, dubbed “8City,’’ at the Shilla Hotel in downtown Seoul, Wednesday. In November 2006, Incheon signed a memorandum of understanding with international hotel chain Kempinski Group headquartered in Geneva to initiate the project. Under the plan, the 8City will span 80 square-kilometers, three times larger than Macao. It will be shaped like number 8, considered lucky by Chinese. There will be convention centers, marinas, casinos, car race tracks, theme parks, residential

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Korail vs.Lotte: Lesson for Investors in Korea

A promising development project may be scrapped because of a peculiar battle for control between a Korean conglomerate and a Korean government-controlled enterprise.  The feud is a lesson for investors who believe that investing in a project with the involvement of the Korean government will assist in guaranteeing success.  Often the involvement of Korean government enterprises overly complicates matters and leads to power struggles between the “experts” and the government.  Because of Korean government realities, however, often the involvement of a Korean government enterprise is required.  This project is an exciting project for many of our domestic clients struggling in this market and hopefully personality conflicts will not put in jeopardy a great project that will revitalize an area that is the geographic center of Seoul and could become a new downtown in a district that will loose a great deal when the U.S. military base is relocated. The following

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The Koreans are Coming: Hana Financial to Acquire Majority Share in U.S. Broadway National Bank

Hana Financial has announced that it will purchase 71% of Broadway National Bank’s holding company.  Broadway National Bank is a New York-based bank that tailors its services to Korean clients. Hana Financial is one of Korea’s largest retail and investment banks.  The main purpose of the acquisition is to expand Hana’s retail operations to the U.S. market.__________Sean Hayes, IPG’s Co-Chair of the Korea Practice Team, may be contacted at: [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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Non-Acceptance of Government Report Grounds for an Appeal to Korean Court

Over the past decade, Korea has liberalized its government permit system and has required, in many more instances, only a report or notification to be filed with the government for many activities that previously required approval of a relevant Korean government authority. Even with the change, however, the Korean bureaucracy has, often, been unwilling to give up its power and has simply rejected reports, thus, in reality rejecting the anticapted activity. In a Supreme Court case handed down late last year (2008 Du 167), the Supreme Court of Korea ruled in a case concerning a construction report, that the non-acceptance of the report is justifiable grounds for an appeal of the non-acceptance to court. This development is a welcomed sign for developers and other that are often stymied by bureaucracy with too much time and not enough business sense. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not

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Korean Investment in Asia and the West is on the Decline

A few news sources, including Law Times, have announced the financial crisis is curtailing Korean company’s investments abroad. Kumho Tire has announced that it will suspend the building of a tire plant in Georgia. The project was scheduled to be completed in the second half of 2009. Kia motors will likely not go forward with a $1 billion assembly plant in Georgia. Posco Steel planed to continue its plans of building a $12 billion mill in India and a $5million mill in Vietnam. However, news has spread that the plans were scraped because of disputes with the governments. I have a few clients that have suspended their Southeast Asia projects because of the Won’s collapse. One of the projects is the building of one of the tallest buildings in Cambodia. The foundation and a few floors have already been built. Many in the real estate market believe that many Korean

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Lack of Office Space in Seoul

Lack of Office Space in Seoul By Sean Hayes (Korea Times 11-26-2008) Korea, in this global economic turmoil, must become a more attractive location for foreign investors. The answer to attracting more foreign capital is obviously to improve the overall investment climate. Along with the ubiquitous mention of tax reductions, regulatory revisions, and an improved living environment; Korea also must reduce expenses in doing business in the country including access to affordable office space. The access to affordable office space may be as important for the short- and long-term development of the economy and the nation’s goal of becoming the hub of Asia as many of the regulatory, legal, political, and economic reforms that have been proposed by the Lee Myung-bak administration. For example, a few of my clients mentioned that one of the major obstacles to expanding their presence in Korea is the lack of office space. One, in

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REITS in Korea: Real Estate Investment Trust Law Amended

REITS in Korea: Real Estate Investment Trust Law AmendedLaw Update by Sean Hayes The Real Estate Investment Trust Act was amended in June of 2007 and the law will become effective in October of 2007. The law was revised in order to encourage the establishment of more REITs. The previous law was criticized for being too complicated and for giving too much discretion to the Ministry of Construction and Transportation (MOCT). Elements of the New Korean REIT Law:1. Approval of MOCT NOT required to establish a REIT. Approval still needed before the invitation of investors. The MOCT, however, should approve most applications if the minimum requirements are met. Approval is only intended to insure that the minimum requirements are met. 2. Paid-in capital requirement is reduced from W25billion to W1billion. However, the REIT must increase the paid-in capital to W10billion within six month of approval by the MOCT. 3. Fund

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REAL ESTATE INVESTMENT COMPANY ACT (old)

REAL ESTATE INVESTMENT COMPANY ACT (Amended as of January 14, 2005)(New Law in effect on Oct, 2007)CHAPTER I GENERAL PROVISIONS Article 1 (Purpose) The purpose of this Act is to contribute to the development of national economy by prescribing the matters concerning the establishment of a real estate investment company, the management methods of assets thereof and the protection of investors therein to provide citizens at large with more opportunities to invest in the real estate as well as to vitalize the sound investment therein. Article 2 (Definitions) The definitions of terms used in this Act shall be as follows: 1.The term “real estate investment company” means any company that is incorporated pursuant to Article 5 mainly for the purpose of investing its assets in real estate and managing invested assets, which falls under each of the following items: (a) The self-managed real estate investment company: The company that has

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Korean Foreigner’s land Aquisition Act (Enforcement Decree)

ENFORCEMENT DECREE OF THE FOREIGNER’S LAND ACQUISITION ACT INTRODUCTION Details of Enactment and Amendment – Enactment: This Decree was enacted to prescribe matters delegated by the Act on the Acquisition of Lands by Foreigners and their Management (Act No. 4726, Jan. 7, 1994) such as the detailed standards for land for actual use that may be acquired by foreigners and the procedures for such acquisition as well as those necessary for the enforcement thereof following the enactment of the said Act. The formerly executed Enforcement Decree of the Foreigner’s Land Acquisition Act (Cabinet Decree No. 645, Apr. 10, 1962) is repealed by the enactment of this Decree. – Amendment: This Decree has arrived at its present form as a result of being wholly amended on June 24, 1998 and being partly amended on December 30, 2002 and March 17, 2004. Accordingly, its title was changed to the Enforcement Decree of

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