is an employment agreement that provides otherwise, the employee becomes a “regular employee”
under Korean labor laws and qualifies for additional
legal protections. The practical effect of these protections is that it is very difficult for companies to terminate employees, or even to lay off employees for economic reasons. In addition, employment laws treat
companies differently depending on the number of
employees at the company. Smaller companies are
exempt from some requirements, but as a company
If and when the Korea-U.S. free trade agreement
wins approval, there will likely be another new
wave of foreign investment from the United States
and a surge in the number of foreign and foreign-invested companies operating in Korea.
grows it becomes subject to more stringent requirements. Companies that decide to start operations in
Korea need to be aware of these issues and need to
plan properly from the very beginning. Competent
legal advice is critical to minimize the potential unexpected burden of complying with the labor laws.
The other areas where Korea ranked low in the IFC
rankings – tax, business formation, and property registration – are also areas where competent professional advice can make a big difference. There are tax
breaks available to foreign investors in certain industries where the government desires to attract foreign
investment. While the procedural requirements to
establish a joint stock company or branch office are
more burdensome in Korea than in many countries,
competent and efficient advice and proper planning
can speed up the process. The property registration
system in Korea is efficient and reliable, but is very
unfamiliar to some foreign investors. Many of the difficulties foreign companies encounter can be overcome, streamlined or minimized with proper guidance and planning.
Korea already ranks as the 13th largest economy in
the world, and continues to grow faster than any
other major industrialized country. If and when the
Korea-U.S. free trade agreement wins approval, there
will likely be another new wave of foreign investment
from the United States and a surge in the number of
foreign and foreign-invested companies operating in
Korea. For many American companies, the question is
not whether – but when – to open a branch office or
subsidiary in Korea.
Because foreign companies frequently need legal
advice on a wide range of issues, practicality requires
that they find a single law firm with the breadth and
depth of experience to efficiently and proficiently
answer all of their questions. Yulchon is a full-service
law firm with the capability to handle all of a foreign-invested company’s legal needs. In addition to the formation, labor, tax, intellectual property, customs and
property registration services that most foreign and
foreign-invested companies require, we also have the
resources to provide industry-specific regulatory
advice for many industries. Many former officials from
the Korea Fair Trade Commission, the National Tax
Service, the Financial Supervisory Service, and other
agencies have joined Yulchon as senior advisors. O
Authors
Hee Chul Kang
Co-head of Corporate & Finance Team
Robert W. Wachter
Inbound Foreign Investment Practice Group
Yulchon, Attorneys at Law (Seoul)
Textile Center 12F, 944-31 Daechi 3-dong,
Gangnam-gu 135-713 Korea
Tel: +82-2-528-5200
Fax: +82-2-528-5228
E-mail: mail@yulchon.com
Yulchon, Attorneys at Law (Vietnam)
Unit 03, 4th Floor, Kumho Asiana Plaza,
39 Le Duan St., Ben Nghe Ward,
Dist.1, Ho Chi Minh City, Vietnam.
Tele: ( 84) +8-39110225
Fax: ( 84) +8-39110230
E-mail: eyang@yulchon.com
www.yulchon.com
