Best Investment & Business Structuring Lawyers in South Korea

1. About Investment & Business Structuring Law in South Korea

Investment and business structuring law in South Korea governs how businesses are formed, reorganized, financed, and exited. It covers corporate entities such as stock corporations (주식회사) and limited liability companies (유한책임회사), as well as mergers, acquisitions, and cross border investments. Practical planning relies on, and must align with, civil and commercial law, tax rules, and regulatory approvals.

Key areas include how capital is contributed, how shares or interests are issued and transferred, and how governance structures are formed to reflect ownership. Compliance with disclosure, fiduciary duties and governance standards is essential for protecting investors and avoiding penalties. Guidance from a qualified attorney helps translate complex rules into a feasible operating structure.

In practice, investment structuring combines corporate form selection, tax planning, and regulatory compliance. It also involves understanding foreign investment incentives, domestic employment laws, and sector specific restrictions. For accurate, up-to-date guidance, consult official texts and a Korea qualified attorney who focuses on corporate and investment work.

Official guidance and statutory texts for Korean corporate law are available on law information portals maintained by the government. See law texts for Commercial Act, Civil Act and Foreign Investment Promotion Act for the latest provisions and 시행일s.

For authoritative sources, you can reference the Korean Legislation Information Center and related government pages. These resources help verify the exact wording of statutes and any changes that affect structuring decisions. law.go.kr provides consolidated texts and updates on Korean law.

2. Why You May Need a Lawyer

• Scenario 1: You plan to establish a foreign owned subsidiary in Korea with multiple tiers of ownership and intercompany loans. A lawyer ensures the Articles of Association, shareholder resolutions, and intercompany loan terms comply with the Commercial Act and tax rules, while coordinating foreign currency requirements with the National Tax Service.

• Scenario 2: You want to merge or restructure an existing Korean affiliate into a parent company across borders. An attorney helps with stock transfers, merger agreements, appraisal rights, and notifying regulatory authorities to avoid post transaction disputes.

• Scenario 3: You seek foreign investment incentives under the Foreign Investment Promotion Act, including designation as a foreign invested company. A lawyer can map eligibility, file required registration, and optimize tax credits or exemptions with the National Tax Service guidelines.

• Scenario 4: You are acquiring a Korean business and require robust due diligence, risk allocation, and optimal contract structure for asset vs stock purchases. An attorney coordinates diligence, negotiates warranties and indemnities, and sequences closing conditions.

• Scenario 5: You are entering a deregulated or sensitive sector necessitating government approvals or licensing. A lawyer helps identify sector restrictions, prepare applications, and communicate with regulators to minimize delays.

• Scenario 6: You need ongoing corporate governance support for board decisions, minority protections, and related party transaction controls to comply with the Commercial Act and fair trade requirements.

3. Local Laws Overview

The following statutes govern core aspects of investment structuring in Korea. Always verify latest texts on official law portals for 시행일 and amendments.

Commercial Act (상법) - Sets out how corporations are formed, governed, and dissolved, including articles of association, share transfer procedures, and director duties. It governs corporate governance frameworks and shareholder rights in stock companies and other business forms. law.go.kr provides the consolidated text and revision history.

Civil Act (민법) - Regulates contracts, obligation creation, property rights, and liability, which underpin all investment transactions and corporate arrangements. It provides the default rules for commercial contracts, sale of shares, and agency relationships. law.go.kr contains the latest provisions and changes.

Foreign investment regimes and related incentives are described in the Foreign Investment Promotion Act, including how foreign invested companies qualify for certain benefits. Consult law.go.kr for the current text and 시행일s.

Foreign Investment Promotion Act (외국인투자촉진법) - Governs foreign investment registration, incentives, and the designation of foreign invested zones. It provides guidelines on eligibility for tax credits, exemptions, and other regulatory supports for foreign capital entering Korea. For the official text and updates, use law.go.kr.

For practical workflow and regulatory contact points, government agencies such as the Financial Services Commission (FSC) and the Ministry of Trade, Industry and Energy (MOTIE) issue sector specific rulings and approvals. Consult their portals for current procedures and contact information. FSC and MOTIE provide regulatory guidance and licensing information.

4. Frequently Asked Questions

What is the Foreign Investment Promotion Act and why does it matter?

The Foreign Investment Promotion Act governs foreign investment registration, incentives, and regulatory oversight for foreign invested enterprises in Korea. It affects tax credits, residency eligibility, and sector access for foreign investors. Understanding it helps optimize incentives and compliance strategies.

How do I start a local subsidiary as a foreign investor in Korea?

You typically prepare Articles of Incorporation, appoint directors, and file with the district court for incorporation. You must also register with tax authorities and obtain any sector specific licenses before operations begin. A local attorney can manage the process efficiently.

When is a share transfer treated as a formal stock transfer under Korean law?

Share transfers are typically documented via a share transfer agreement and require updates to the shareholder registry. The Commercial Act governs the formalities and notice requirements to other shareholders. Consult a lawyer to ensure proper timing and filings.

What is the typical timeline to register a new company in Korea?

Registration usually takes 2-6 weeks depending on completeness of documents and regulator workload. Delays can occur if sector licensing or foreign investment approvals are needed. Plan for a cushion of 1-2 months for complex structures.

Do I need a Korean attorney for a merger or acquisition?

Yes, a Korean attorney helps manage due diligence, drafting of merger agreements, regulatory notifications, and risk allocation. They ensure compliance with Korean corporate and competition laws to avoid post closing disputes.

How much does it cost to hire a law firm for investment structuring in Korea?

Costs vary by project scope, complexity, and firm size. A typical early stage advisory engagement can range from several thousand to tens of thousands USD, with scope expanding for due diligence and multi jurisdiction work. Obtain a written scope and fee estimate up front.

What are the key differences between a stock corporation and a limited liability company?

A stock corporation issues shares and targets broader investor access, while a limited liability company focuses on members' contribution and internal governance. The Commercial Act sets distinct formation, governance, and transfer rules for each form.

Is due diligence required for all cross border investments?

Due diligence is highly recommended for most cross border investments to identify liabilities, restrictions, and negotiation points. It helps structure disclosures, warranties, and indemnities in the deal.

How long does it take to obtain government approvals for foreign investment incentives?

Approval timelines vary by sector and agency, often 4-12 weeks for standard incentives. Highly regulated sectors may require longer review and additional licenses or environmental assessments.

What is a foreign invested company status and what benefits does it confer?

Foreign invested company status can unlock tax incentives, visa possibilities, and faster registration in some cases. Eligibility depends on investment type, sector, and compliance with designated criteria.

Can I use a power of attorney to sign corporate documents in Korea?

Yes, a power of attorney can authorize signing corporate documents. The document must meet formal requirements, and some actions may require personal signatories or notarization depending on the case.

5. Additional Resources

• Law.go.kr - Official portal for Korean legislation; access the Commercial Act, Civil Act, Foreign Investment Promotion Act and other statutes. It provides the current text and revision history. law.go.kr

• Financial Services Commission (FSC) - National regulator responsible for financial policy, licensing of financial institutions, and supervision of capital markets affecting investment structuring. fsc.go.kr

• Ministry of Trade, Industry and Energy (MOTIE) - Government ministry handling industrial policy, investment approvals, and sector specific regulations relevant to business structuring. motie.go.kr

6. Next Steps

1. Define your structuring objective and the preferred corporate form based on ownership goals, tax considerations, and regulatory exposure. This clarifies scope before engaging a lawyer.

2. Identify a Korea qualified attorney with investment structuring experience across corporate, tax, and regulatory matters. Request a written proposal outlining scope, fees, and timelines.

3. Prepare a written brief with background information, target structure, and key documents. Include potential jurisdictions, funding plans, and anticipated regulatory contacts.

4. Schedule an introductory consultation to review compliance requirements for foreign investment incentives and sector licenses. Bring all relevant corporate documents and due diligence questions.

5. Obtain a formal engagement letter and proposed milestones. Align budget with expected regulatory steps, due diligence, and potential tax planning activities.

6. Execute the engagement, begin drafting corporate documents, and coordinate with tax advisers to ensure consistent treatment of transfers, valuations, and incentives.

7. Monitor regulatory changes and update your structure as needed. Schedule periodic reviews with your legal counsel to stay compliant and optimize incentives.