Not Paying Korean Statutory Severance to an Employee in Korea is a Crime

Korean Labor & Employment Law has strict and specific rules imposed on employers, running afoul of these rules can place a representative director/sole director or the individual employee responsible for the violation of law to face criminal and civil sanctions. The criminal sanctions can include a sentence of time in prison or large fines. For an article on severance obligations after a merger please see: Korean Statutory Severance Obligations After a Merger in Korea. For example, the Employee Retirement Benefit

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Korean Tax Incentives for Start-up Businesses in Korea

Our friends at the Korean Tax Blog drafted a post on Korean Start-up Business Tax Incentives. We, at IPG Legal, have written other articles on other incentives, grants, and Korean free trade zones that can be found with a search of this blog, however, we have regrettably neglected many tax incentives. With the increasing cost of doing business in Korea, the Korean government is stepping up and offering incentives for some startup businesses., mature businesses and also businesses wishing to

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Language Supremacy Clauses in Korean Agreements Governed by Korean Law

A language supremacy clause dictates what language governs the interpretation of a contract. Many international contracts are drafted in multiple languages. However, because of the complexity of legal terms, lack of precision in certain languages, the nature of language translation, and other local realities it is best to choose a governing language to avoid the issue of an alleged discrepancy between the Korean and English-language versions of the contract. In most cases, we advise choosing English as the governing language

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Laying off an Employee in Korea: Korean Law on Corporate Downsizing & Redundancy

Reducing the headcount in Korea can be difficult, time-consuming, and costly without the use of an accountant and a proactive attorney. Article 24 of the Labor Standards Act of Korea governs the dismissals of employees for managerial reasons. This is the main applicable law for making an employee redundant. For a general article on terminating an employee in Korea please see: Terminating an Employee in Korea. For an employer employing “employees” in Korea to legally terminate under Article 24 of

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Squeezing-out Minority Shareholders under Korean Corporate Law

The amended Commercial Code of Korea provides for “squeeze-out” rights for shareholders holding 95% or more of the shares of a company. This Korean law was promulgated in April of 2012. The law also provides for a right of minority shareholders of Korean companies to demand a “sell-out.” It seems possible, under the very vague wording of the amended clauses, for a sell-out to take place at the same time as a squeeze-out with the potential of conflicting appraisals and

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Top 100 Korean Lawyers & Legal Consultants in Korea

Sean Hayes, head of the Top Korean Dispute Resolution Law Firm of the Year was rated by LawAsia, one of the leading peer-reviewed publications in Asia, as a Top 100 Lawyer in Korea. Sean Hayes is one of the only non-Korean attorneys on this Korean Lawyer “A-list” and the only non-Korean that was on the list each year the list was published. Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of

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Guide to Winding-Up/Closing a Korea-based Company: Korean Company Liquidation Procedure

Any business in Korea that is registered as a corporation must wind up/liquidate the company to legally close the business in Korea. Many companies, however, choose to forgo this step thinking that no repercussions will be felt. This belief is far from the reality. I know a pending case that has led to prosecutions, a lawsuit of a related company, and a tax audit of an individual shareholder. For an article on Korean Bankruptcy please see: Korean Bankruptcy Law. The

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Legal Reserve of Inheritance for an Estate in Korea

Korea’s Legal Reserve of Inheritance/mandatory share of inheritance (유류분/遺留分) is a specific portion of an inheritance given to heirs notwithstanding the will. Therefore, for example, even if the will notes that a certain estranged child shall not receive any of the inheritance, Korean Law imposes a mandatory share of the estate for this heir. Therefore, the deceased is forced by Korean law to provide a certain percentage of the estate to all legal heirs under Korea’s Inheritance Reserve Law. For an article

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Punishment in Korea for Not Paying Korean Child Support

Korea has legal tools in place to punish a person who refuses to pay child support. We advise, if you have a child support order to not sit on your rights, and if payment is not made, consult an attorney and get the process moving in order to enforce your rights. If you have not been awarded child support it is advisable to read the following article: Korean Child Support Basics explained by IPG Legal and Calculating Child Support in

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Korean Statute of Limitations for Unpaid Wages in Illegal Worker Dispatch Cases in Korea

The Supreme Court of Korea ruled in April of 2023 for the first time on the statute of limitation for damages claims based on an illegal dispatch of workers in Korea. The Supreme Court of Korea ruled that the statute of limitations clause under Article 766 of the Korean Civil Code and not the statute of limitations clause under Article 49 of the Korean Labor Standards Act should be applied to unpaid wage claims filed by a subcontractor’s employee against

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