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Editorial

Overview

The main subject dominating South Korea’s legal future relates to the third-stage liberalisation of the Korean legal market permitting the establishment of joint venture law firms between local and foreign law firms. Joint ventures between Korean and European firms will be possible from July 2016, and those between Korean and US firms from March 2017.

However, in its current form, the Foreign Legal Consultants Act (as revised by the Korean Ministry of Justice) is looking distinctly unpalatable for foreign firms. Burdened with the risk, but not the control, of the joint venture – foreign firms are allowed only a minority stake – and shackled with the imposition that the union must be between a domestic firm and the head office of the international entity, most foreign firms consider this something of a ‘sham’ opening.

Nonetheless, South Korea remains a tempting market for global players, with White & Case LLP (Foreign Legal Consultant Office) and Kobre & Kim the latest to open an office in Seoul. This is partly a result of the international success of Korean building contractors, and partly due to the head office residence of some of the world’s most progressive businesses, including Samsung Electronics, Hyundai Motor and POSCO.

With regards to domestic legal work, corporate and employment practices fared particularly well following a move by the corporate giants that dominate the business landscape to streamline lagging parts of their businesses, in a bid to focus on core sectors. In one significant deal, Samsung Electronics, the nation’s biggest conglomerate, agreed to sell four of its chemicals and defence sector affiliates to Hanwha Group for $1.82bn, as part of its business reorganisation.

Kim & Chang remains the largest and probably best-known law firm in the region, and leads the so-called ‘Big Six’; the others are Bae, Kim & Lee LLC; Lee & Ko; Shin & Kim;Yoon & Yang LLC; and Yulchon. Though market liberalisation may not break the stranglehold these firms have over domestic work, a shake-up of the order remains a possibility. Rapidly growing firms like the ‘up-and-comingJipyong threaten the status quo.

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Press releases

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Legal Developments in South Korea

Legal Developments and updates from the leading lawyers in each jurisdiction. To contribute, send an email request to
  • Brief Introduction to Issuing QIB Securities in Korea

    To date, most issuance of bonds in the Korean capital markets has been focused on the public market, but in regard to issuance of bonds in the public market, there is an obligation to file a securities registration statement for investor protection purposes and there are broad disclosure obligations even during the period of secondary distribution and trading of such securities.
  • [South Korea] 2016 Proposed Tax Law Amendments

    On July 28, 2016, the Ministry of Strategy and Finance announced its proposed tax law amendments for 2016. According to the proposal, the revisions are aimed at increasing the engines for growth and promoting fairness in taxation in accordance with the mid- to long-term tax policy initiatives of the government. The proposed amendments are expected to come into effect on January 1, 2017 pending approval by the National Assembly.
  • Substantial Developments in Korean Bankruptcy Laws

    Substantial Developments in Korean Bankruptcy Laws Reflecting Practical Needs of the Parties Involved: CRPA and DRBA
  • Breaking Down the Just-Cause Barrier

    A Systematic Approach of Securing Greater Flexibility in Managing Poor Performing Employees
  • Court Regards Tax Avoidance Purpose as a Primary Consideration in Determining Beneficial Ownership

    The Seoul Administrative Court recently ruled that a Hungary-based subsidiary ("HungarianCo") - set up in 2010 by a Dutch Motion Picture Licensing Entity ("Dutchco") to hold exclusive rights in distributing motion pictures produced by the group company in Korea, Japan, Israel and Hungary - was not the beneficial owner of royalty payments made by a Korean entertainment and motion pictures distributor ("KoreaCo") for rights to distribute motion pictures in the Korean market. Although HungarianCo had substantive physical presence in Hungary, the court held that based on an overall consideration of the purpose for setting up the entity in a certain jurisdiction, the nature of the activities performed by the employees, scope of transactions undertaken and actual flow of payments, DutchCo was the beneficial owner to the royalty payments and applied the royalty withholding tax rate of 15% pursuant to the Korea-Dutch tax treaty.
  • Korean Regulator, Encouraging Financial Institutions by Relaxing the Chinese Wall Regulations

    On 28 June 2016, the Korean government enacted an amendment (the "2016 Amendment") to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (the "FSCMA") which, among others, expands the exception (the “Wall-Cross exception”) to the Chinese wall regulations, i.e., restriction on the communication and exchange of information between business sectors within financial institutions (The term “financial institutions” as used in this article refers to dealers, brokers, fund managers, investment advisors, discretionary investment companies and trust companies (all of which are regulated under the FSCMA) to the exclusion of all other types of financial business entities such as merchant banks.) The 2016 Amendment seeks to enhance the competitiveness of financial institutions by allowing them to integrate activities which do not - or are unlikely to - conflict with one another, and further simplifies the regulatory scheme by removing the exceptions to the Chinese wall regulations from the Regulation on Financial Investment Business and incorporating the same in the Enforcement Decree.
  • [South Korea] Ministry of Strategy and Finance Issues Notice of a New Filing Requirement, and ...

    [Ministry of Strategy and Finance Issues Notice of a New Filing Requirement, and Those Companies Subject to the Comprehensive Report on International Transactions]
  • [South Korea] KFTC Issues Amended Guidelines on the Review of Unfair Trade Practices

    On December 31, 2015, the Amendment to the Guidelines on the Review of Unfair Trade Practices (“Amendment” and “Guidelines,” respectively) came into effect. The Guidelines are intended to provide guidance to companies about when their unilateral conduct may be considered an “unfair trade practice.”
  • [South Korea] Government to Strengthen Investigation of Environmental Crimes through a Newly ...

    [Government to Strengthen Investigation of Environmental Crimes through a Newly Established Task Force]
  • Court Holds Royalties for Foreign-Registered Patents are Not Subject to Withholding Tax in Korea

    Court adhered to the existing position on the determination of royalty payment

Press Releases worldwide

The latest news direct from law firms. If you would like to submit press releases for your firm, send an email request to
  • Lower VAT On Hotel Services In Montenegro

    An important piece of regulation has been introduced in Montenegro recently, through the reduction of VAT on catering services in four stars hotels (in the north of the country) and five-star hotels (on the seaside), which will be effective from 2018. According to media reports, Olivera Brajović, General Director of Tourism Development and Standards in the Ministry of Sustainable Development and Tourism, pointed out that these reduced tax rates on services of preparing and serving food and drinks are expected to raise the overall competitiveness in the hospitality sector, while at the same time contribute to the combat against grey economy.
  • Karanović & Nikolić Joins The NextLaw Global Referral Network

    Karanović & Nikolić is pleased to announce that it has joined the NextLaw Global Referral Network, created by global law firm Dentons. We are particularly excited by the fact that Nextlaw presents a new type of network, with a unique invitation-only approach in their selection, ensuring that all of its members have the highest quality standards and a proven track record of excellence.
  • Sweet Smell Of Success - Serbian Sugar Industry Consolidates Its Forces

    After more than a four months and a Phase II (in-depth) investigation, the Competition Commission gave conditional approval, to Sunoko's acquisition of the Star Šećer company and its subsidiary Te-To - the owner of the sugar factory in Senta. No divestments have been required from Sunoko.
  • New Bridge Over Danube To Be Built In Belgrade

    News reports are informing us that Belgrade will gain another bridge over the Danube river in the near future – this one at the Ada Huja island and over three kilometres long.
  • Nikola Tesla Airport To Acquire Sava Centar?

    Media outlets have recently been reporting on the possibility that Nikola Tesla Airport will acquire Sava Centar (SC), with the purpose of turning it into its company headquarters. This acquisition would be followed by an investment of over EUR 30 million in the next three years for the building's reconstruction and adaptation. Such a decision would result in Sava Centar changing its name to "Congress Centre Nikola Tesla Airport", with an expanded array of facilities, including a tower, a shopping mall, and a hotel. The funds for the investment in question will be hailing from the Airport's own assets.
  • Too Big To Hide – European Commission Sanctions Truck Cartel

    Global competition law circles have recently been shaken by the European Commission's record-setting fine of EUR 2.93 billion for collusion on the automotive market, imposed against Volvo, Daimler, Iveco and DAF trucks. The sanctions in question varied amongst the accused parties, with Daimler facing the largest penalty in the amount of more than EUR 1 billion on its own. Iveco's fine was set at EUR 494 million, DAF's at EUR 752 million, and Volvo's fine has been set at EUR 670 million.
  • Cartel Office ensures greater competition in rail sector

    The German railway company Deutsche Bahn must allow for more competition. The Bundeskartellamt, Germany’s Federal Cartel Office, found that the company had abused its dominant market position with respect to the sale of rail tickets.
  • ETERNA LAW IS PLEASED TO ANNOUNCE START OF THE COOPERATION WITH PUBLIC ASSOCIATION "ACADEMY OF PREVE

    Eterna Law (representative office in Almaty) announces the beginning of co-operation as a legal adviser with the Public Association "Academy of Preventive Medicine of Kazakhstan."
  • LAG Sachsen-Anhalt on video surveillance at the workplace

    Video surveillance at the workplace does not inevitably give rise to claims for damages. That was the verdict of the Landesarbeitsgericht (LAG) Sachsen-Anhalt [Regional Labour Court of Saxony-Anhalt] (Az.: 6 Sa 301/14).
  • Final stretch for loan withdrawal

    Those who still want to withdraw from real estate loans concluded between 2002 and 2010 should take action now while the right of withdrawal is on its last legs. This get-out-of-jail-free card is set to lapse shortly.