South Korea > Legal market overview
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South Korea’s domestic market remains sluggish, with lawyers reporting slim pickings on the M&A and capital markets fronts. In contrast, firms report an uptick in outbound transactions, and a marked increase in shipping finance. Also, more corporate private auctions are taking place as holding companies seek to sell off subsidiaries.
Outside the transactional arena, employment continues to be a busy area as companies seek to navigate South Korea’s idiosyncratic employment laws; and the ongoing Apple v Samsung patent litigation in relation to smartphones and software continues to generate headlines.
The South Korean market opened up to foreign firms in 2012, with a number taking the opportunity to open an office in the jurisdiction. Linklaters joins Allen & Overy, Cleary Gottlieb Steen & Hamilton LLP, Paul Hastings LLP and Simpson Thacher & Bartlett LLP in the top tier of foreign firms this year; all have offices in the country except Allen & Overy, which continues to serve the jurisdiction from Hong Kong.
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Further to the Personal Information Protection Act ( PIPA ), the comprehensive data privacy law passed in March 2011 which will take effect on September 30, 2011, 1 the government has unveiled draft regulations to flesh out a number of the applicable requirements and standards. The drafts of the Enforcement Decree and the Enforcement Regulations, published on May 24, 2011, include significant requirements relating to data security, which, like other provisions, apply to any entity that handles personal information files for work purposes (referred to as “data handlers” below). Also now spelled out are various details concerning consent requirements, website sign-up rules, video camera restrictions, use of third party data handlers, reporting of leaks, and collective dispute mediation.
In a move to stabilize Korean financial markets that have been battered by last week's U.S. credit downgrade, the Financial Services Commission (FSC) announced on August 9, 2011 that it would impose a temporary ban on all short selling of listed securities traded on the Korea Exchange (KRX), including the main board KOSPI markets and secondary tech-heavy KOSDAQ markets. On August 10, 2011, the KRX adopted the prohibition on short selling for three months (August 10 to November 9, 2011). At the height of the global financial crisis in 2008, a temporary ban on all short selling had also been imposed in an effort to prevent short selling from destabilizing the local bourse. In June 2009, the FSC lifted the ban at least on covered short selling of non-financial stocks. Naked short selling is prohibited under the existing rules, so this temporary ban will have the effect of prohibiting all types of covered short selling of securities listed on the KRX such as stocks, convertible bonds, bonds with warrants, equity-linked warrants (ELWs), equity-linked funds (ETFs), warrants and beneficiary certificates (but not straight bonds).
The Financial Services Commission (FSC) announced that the three-month ban on all short selling of listed securities traded on the Korea Exchange (KRX) will be lifted on non-financial stocks starting from November 10, 2011, while the ban will be maintained on financial stocks for the time being due to their greater vulnerability to external factors such as euro zone risks. However, this remaining ban on financial stocks will not extend to short selling by liquidity providers to provide quotations, which will continue to be permitted. On August 10, 2011, the KRX adopted a temporary ban on all short selling for three months following the U.S. credit downgrade.
Capsule summary: Under amended business combination reporting rules effective from January 1, 2012, stock acquisitions by large companies will generally trigger prior review by the Korean Fair Trade Commission (KFTC). Other rule changes will allow a broader range of presumptively harmless transactions to use a simplified or fast-track merger review process, but at the same time the changes will permit closer scrutiny of anti-competitive effect in case of transactions that do not qualify for that process. Also, in a late 2011 ruling, the KFTC for the first time imposed corrective measures for an offshore business combination.
Tax treaty rates to apply to offshore investors only upon application including disclosure of benefimore >>
Planned changes to financial sector regulations expected to take effect September 2011 The Financial Services Commission (FSC) of Korea is poised to implement a slate of regulatory changes that will ease a number of the current constraints, and clarify standards, for the formation and operation of domestic hedge funds. First announced in draft form in late June 2011, the changes to the presidential decree promulgated under the Financial Investment Services and Capital Markets Act (FSCMA) are for the most part expected to be finalized in August 2011, and to take effect in September 2011. The stated aim is to spur growth in Korean hedge funds, known technically as "collective investment vehicles aimed at qualified investors." The new rules will broaden the scope of eligible investors; ease current hedge fund operating limits such as the leverage cap; finalize eligibility criteria for hedge fund managers; and permit a wider range of prime broker activity, including securities lending for short sales. The rules remain subject to revision as they undergo final government review. The anticipated key rules, however, are as follows.
On December 18, 2013, the Supreme Court of Korea held that the ordinary wages of employees of KB Auto Tech include fixed bonuses regularly paid. The decision impacts all employers in Korea, as ordinary wages are used to calculate overtime and compensation for unused annual leave, which may in turn impact severance pay. The following is a summary of the relevant issues.
Korean Constitutional Court ruled that a key provision of the Act on Prevention of Divulgence and Protection of Industrial Technology (as established as Act No. 8062 on October 27, 2006, and before amended by Act No. 10962 on July 25, 2011, the "Industrial Technology Protection Act" or "the Act") is unconstitutional (July 25, 2013, 2011Heonba39).
Amendments to the Commercial Building Lease Protection Act (the "Act", and as amended, the "Amended Act") were promulgated on August 13, 2013.
Schoenherr, a leading corporate law firm in Central and Eastern Europe, advised Österreichische Volksbanken-AG (OeVAG) on the sale of its fully-owned subsidiary Volksbank Malta Limited to Malta-based Mediterranean Bank plc. On 11 April 2014, OeVAG and Mediterranean Bank signed a Share Purchase Agreement for 100% of the shares in Volksbank Malta. Closing shall take place after the required approvals of the relevant regulatory bodies are received. read more...
Stefan Kuehteubl will join Schoenherr, a leading corporate law firm in Central and Eastern Europe (CEE), as a partner and the head of the firm's Employment practice as of July 2014. A highly-regarded employment law practitioner, Kuehteubl will be returning to Schoenherr, where he previously worked as a member of its employment team between 1999 and 2004. During the past ten years, he worked in a well-known Vienna-based employment law boutique, in which he was a partner since 2008. read more...
The Swiss law on product safety ( Produktesicherheitsgesetz, PrSG) is currently scheduled to enter into force on July 1, 2010. This new law aligns Swiss product safety requirements with EU law. It applies not only to manufacturers, but to anyone who commercially or professionally markets products in Switzerland, and it introduces substantial new obligations before and after the sale of a product.
The Chambers Global 2014 international ratings have hailed Pepeliaev Group's tax practice and the firm's managing partner Sergey Pepeliaev as Russia's best in the area of taxation (band 1 and Star Individuals). Commentators describe Mr Pepeliaev as "the father of Russian taxation." He has an outstanding reputation in tax litigation, for which he is said to be "absolutely brilliant." In addition, Chambers Global lavishes praise on Rustem Ahmetshin (band 2), one of the firm's senior partners, who has considerable expertise in areas such as VAT and audit advice. Chambers Global sources commend Pepeliaev Group partner Valentina Akimova (band 3) as a "smart tax specialist." She has significant experience in a wide range of tax matters such as VAT, income tax and excise duties. Sources recommend Andrey Nikonov (band 3), another senior partner in the firm, as an authority on VAT, mineral extraction tax and unified social tax. Chambers Global also rates Mr Nikonov highly for his experience in resolving tax disputes advising on the tax aspects of M&A transactions.
Dhir & Dhir Associates advised National Housing Bank, wholly owned by Reserve Bank of India, on the Tranche- II of public issue of tax free bonds in the nature of secured, redeemable, non-convertible debentures with benefits under Section 10(15)(iv)(h) of the Income Tax Act, 1961, aggregating upto Rs. 1,000 Crore.
In a recent landmark judgment of the Hon'ble Andhra Pradesh High Court in the matter of Deccan Chronicle Holdings Ltd. (DCHL) & Ors. Vs. Union of India & Ors ., the Hon'ble Court has laid down an important principal of law to the effect that SARFAESI Action can be taken by an assignee/ successor in interest only if the original lender had SARFAESI power.
DHIR & DHIR ASSOCIATES ADVISES NATIONAL HOUSING BANK ON THE PUBLIC ISSUE OF TAX FREE BONDS AGGREGATIDhir & Dhir Associates advised National Housing Bank, wholly owned by Reserve Bank of India, on the public issue of tax free bonds in the nature of secured, redeemable, non-convertible debentures with benefits under Section 10(15)(iv)(h) of the Income Tax Act, 1961, aggregating upto Rs. 2,100 Crore.
On 20.03.2014 was carried the first part of the annually organized forum "Legal Day" of German-Bulgarian Industrial Commercial Chamber. Representatives of the leading legal companies in Bulgaria and industry representatives also took part in the event.
On 24.03.2014 a meeting of the Advisory Board "Law" of the German-Bulgarian Industrial Commercial Chamber (GBICC) was held. The event was attended by representatives of the business as well as lawyers from major law firms in Bulgaria, including the law firm "Popov & Partners."