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Legal Developments in South Korea

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  • Korean Financial Regulators Advance Legislation to Introduce Regulatory Sandbox to Spark FinTech

    The 2018 year in review in Korea was notable for the sluggish overall economy, uncertainty surrounding the geo-politics and impact on Korea due to the global trade wars, on-going concerns related to the lack of jobs and unemployment, increased taxes and burdens for businesses and families, and no meaningful improvement or clarity in the current situation for 2019. In response, the Korean National Assembly passed a legislation called the Financial Innovation Support Act (the “FinISA”) on December 7, 2018 to spark the financial services industry in conjunction with FinTech products and services. The FinISA, which will soon take effect in March 2019, is intended to lay the legal foundation to introduce a regulatory sandbox for innovative financial services, where FinTech firms test their new products and services without certain regulatory oversight pursuant to exemptions for a limited period of time (“Sandbox”). As the FinISA exempts or defers application of existing finance-related regulations for new financial technology, products or services with the purpose of fostering the creation of innovative and new financial products and services, it will also support the stabilization of such services in the financial services market at the end of the testing period and is expected that the FinISA will support a revitalization of the FinTech industry which experienced sluggish growth in recent times. In particular, as companies and investors become more interested in security tokens and Security Token Offerings (“STO”) which are regulated by the Financial Investment Services and Capital Markets Act (the “FSCMA”), there have been on-going discussions and debates as to whether the FinISA could lead to a breakthrough in the crypto-asset industry based on blockchain technology. Crypto assets encompasses those assets which utilize blockchain technology where the asset is digitalized by utilization of cryptography, peer-to-peer networks and a public ledger of verified transactions resulting in a ‘units’ of such a crypto asset without any involvement by middle-persons or brokers (e.g., cryptocurrency.
  • Flying Under the Radar

    Flying Under the Radar: Companies Must Increase Awareness of the Potentially Dormant and Disruptive Changes to the Minimum Wage in Korea
  • New Legislation: Amendment to the Enforcement Decree of the Act on External Audit of Stock Companies

    The amendment to the Act on External Audit of Stock Companies (the “Act ”) and the enforcement decree thereof (the “Enforcement Decree ”), whose key feature pertains to the external audit and disclosure requirements for limited liability companies, became effective as of November 1, 2018. Certain provisions relating to the category of targets of external audits will become effective with respect to the fiscal years that commence on or after November 1, 2019. Therefore, for the majority of companies whose fiscal years begin on January 1 and ends on December 31 of each year, the revised category will become effective with respect to the fiscal year that begins on January 1, 2020.
  • New Proposed Tax Law Amendments Provide Clarification on the Taxation of Foreign Funds

    On July 30, 2018, the Korean Ministry of Economy and Finance (“MOEF ”) announced the proposed tax law changes/amendments for 2019 and beyond (“Proposals ”). The Proposals are expected to be reviewed and finalized by the Korean National Assembly in December 2018.
  • KFTC to Expand Scope and Penalties of Korea’s Antitrust Enforcement Regime

    Korea’s competition authority, the Korea Fair Trade Commission (the “KFTC , has announced a proposal to expand its existing enforcement authority to the courts and prosecutors through a full-scale reform of the Monopoly Regulation and Fair Trade  Act, Korea’s primary competition statute. If all proposed reforms are passed by the National Assembly as currently drafted, the impact on the Korean economy and antitrust enforcement will require companies doing business in Korea to tighten their risk management and compliance measures, as the scope and penalties of Korean antitrust enforcement would be broadened.
  • Korean data law amendments pose new constraints for cross-border online services and data flows

    Under amendments to IT Networks Act, set to take effect in March 2019 , offshore online businesses, meeting thresholds of nexus to Korea, will be required to designate local agent for regulatory oversight purposes.
  • New Legislation Reduces Maximum Weekly Working Hours in Korea

    *For better understanding of this article with other graphics , we highly recommend you to visit our firm's website as below. http://www.bkl.co.kr/upload/data/20180410/bkl-legalupdate-2018000410.html#.WsxBYIhuaHs
  • Supreme Court Renders Decision Calling for “Gender Sensitivity” in Sexual Harassment Cases

    Amid the widespread attention that sexual harassment/violence in the workplace has received due to international movements such as the “Me Too” movement, the Supreme Court of Korea has recently rendered a significant decision on the need to reform the judicial system’s approach to sexual harassment cases.
  • [South Korea] Amendment to Unfair Competition Law

    A bill to amend the Unfair Competition Prevention and Trade Secret Protection Act (the “UCPA”) was promulgated on April 17, 2018, and is scheduled to take effect on July 18, 2018.   The bill introduces significant amendments to the UCPA, namely stipulating store interior designs as business marks and making the unauthorized use of “ideas” an act of unfair competition, thereby substantially expanding the applicability of Subparagraph 1 (j) of Article 2 (“fraudulent use of another person’s product”) of the current (or pre-amendment) UCPA.
  • [South Korea] Location information law amended to ease requirement for tracking of objects

    Under changes to Location Information Act, to take effect in October 2018, businesses will be allowed to track goods after obtaining registration instead of license.