The number of workers subject to obligatory employment is so high that it is leading to a lower competitiveness. Are any measures planned to solve this problem?

Pursuant to the Labor Relations Act, compulsory employment includes physically disabled people as well as safety and health specialists.

Obligatory employment of health and safety specialists:

• In order to guarantee the health and safety of workers, it is common to employ health and safety specialists, which is also the case in advanced industrialized countries such as in Germany and Japan.
• In advanced industrialized countries the standards for their selection are even stricter and also the fields are more subdivided.
• The Korean government has been continuously liberalizing regulations, and especially in May 1997, the obligatory employment in the field of industrial health was revoked. Also, liberalization took place in other areas such as for expansion of double-posts, common recruitment system (new), reduction of obligatory employment, more exemptions etc.
• The Korean government has been continuously liberalizing regulations, and especially in May 1997, the obligatory employment in the field of industrial health was revoked. Also, liberalization took place in other areas such as for expansion of double-posts, common recruitment system (new), reduction of obligatory employment, more exemptions etc.
• However, the health and safety field

Obligatory employment of disabled people

• The obligatory employment of disabled people is intended to give them the opportunity to participate in society and live an ordinary life through their work.
• This system is based on the idea that the entire community has to take responsibility for employing disabled people. Employment leads to economic autonomy and independence of the disabled, but if this system was left to the free decision of the companies, then many of the disabled would face severe shortages of work opportunities.
• Many advanced industrialized countries are protecting disabled people through this system of obligatory employment, which allows them to live a higher quality of life. This was made possible through the charges levied to the employer, which have to be paid if not employing disabled people. This fund is used as the basic financial source for training, facilities, etc. of the disabled and therefore returned to the employer through direct or indirect means.
• The Korean government will make efforts to lay the foundation for the employment of disabled people through the development of job training, and provide skilled disabled workers to the company. This would lead to an improvement of productivity as well as solve the problem of shortages in the workforce.

Are there any professional agencies dealing with factory establishment?

The agency in charge of factory establishment is the Korea Industrial Complex Corporation (KICOX). Its headquarters are located in Seoul with ten branches across the nation. For advice regarding factory establishment you can call 1566-3636 from anywhere in Korea and get consultation about factory establishment. Alternatively, please refer to the following contact points or check out their English web site at http://www.kicox.or.kr/english/e-Home.html.

BranchResponsible RegionTelephone Number
Support Center for
Factory Establishment
Nationwide Supervision and
Operation of a Factory Establishment
Management Information System(FEMIS)
02-6300-5731
Seoul CenterSeoul, Incheon, Gyeonggi
(excluding Yangpyong, Yeoju)
02-6300-6513
Wonju CenterGangwon, Chungbuk, Gyeonggi033-761-7124
Suwon CenterGyeonggi031-259-6241
Cheonan CenterDaejeon, Chungnam041-554-9636
Gumi CenterDaegu, Gyeongbuk054-467-0731
Cheongju CenterChungbuk043-236-4107
Changwon CenterBusan, Gyeongnam055-260-1211
Ulsan CenterUlsan, Gyeongnam052-228-1550
Gwangju CenterGwangju, Jeonnam, Jeju062-953-5713
Gunsan CenterJeonbuk063-468-6900

What are the types of visa and how long is their validity?

There are generally two types of visa: single entry and multiple entry.

– Single entry visas have a validity of three months from the date of issue.
– Multiple-entry visas have a validity of principally one year from the date of issue.
However, holders of diplomatic and government passports are issued a visa with a
validity of three years. Visas issued by agreement are valid until the date of
agreement.

In practice, the types of visa can be divided into four categories:

1. Visa for foreigners conducting diplomacy, official duty and negotiation (SOFA) and their
families: diplomacy (A-1), official duty (A-2), agreement (A3).
2. Visa for non-profit activities and short-term stay (less than 90 days): temporary news
coverage (C-1), short-term business (C-2) and short-term visitors (C-3).
3. Employment visa: short-term employment (C-4), professors (E-1), teaching foreign
languages (E-2), research (E-3), special technology instruction (E-4), special
occupations (E-5), arts and entertainment (E-6), other particular occupations (E-7),
industrial trainees employment (E-8), non-special employment (E-9),
working holiday (H-1).
4. Others: culture/art (D-1), students (D-2), industrial trainees (D-3), general trainees
(D-4), residence reporters (D-5), religious workers (D-6), intra-company transferee
(D-7), treaty investors (D-8), treaty traders (D-9), visiting and joining families (F-1),
residence (F-2), dependent families (F-3), overseas Korean residents (F-4),
permanent residence (F-5), others (G-1).

Further information about visa issuance: refer to the English homepage of the Ministry of Justice. ww.moj.go.kr/english/index.php

What is the visa status of the family of a foreigner working for a foreign-invested company and what documents are needed when applying for the visa and approval for change of status?

Family of a foreigner working for the foreign-invested company is the spouse and unmarried children under 20 years of age.When the foreigner and the family apply together for the visa or approval, the documents needed are passport, application form and documents verifying the relationship (birth certificate or marriage certificate).When the application is filed separately, additional documents to the ones listed above are the certificate of employment of the foreigner and a copy of the alien registration ID.The visa issued to the family is that of dependent families (F-3) and the length of stay is equivalent to that of the spouse or parent.

What are the types of environmental pollution prevention facilities and where is the place of registration?

The types of facilities can be divided as for the following:

– Air pollutants;
– Water pollutants;
– Prevention of the discharge and generation of noise and vibration;
– The design or execution of facilities to reduce or control the above.

Depending on the industrial sector, the businesses are divided into air pollution prevention facilities business, water pollution prevention facilities business, and noise / vibration prevention facilities business.
People interested in prevention facilities business have to possess the necessary technological capabilities as stipulated in the Enforcement Decree of the Development of and Support for Environmental Technology Act, and need to register at a local environment agency.

Is it compulsory to pay for student grants and for congratulations / condolences?

In return for wage increases demanded by workers, companies used to give other allowances or welfare benefits.

– For that reason, the wage system became complicated and also management costs
increased. The allowances became fixed payments no longer reflecting the workers’
performances.
To solve this problem, it should be settled between the labor and management themselves. However, administrative support is also given by the government.
– If possible, the various allowances should be included in the basic wage, so that only
the allowances reflecting the performance of the worker are retained.
The government is making efforts to expand social welfare, especially for small-medium enterprises that have a relatively weak welfare system compared to large conglomerates, and for low-wage workers. The welfare includes scholarships, financial support for medical expenses and condolences / congratulations among others.

If the company could dismiss workers at will or even if the present system was maintained, would unjust dismissal be defined as a crime?

If companies could dismiss workers at will, then there would be a great danger that dismissal will be misused. Especially in Korea, where the social welfare system is still almost non-existent, such a law would constitute a serious economic, as well as social blow to such workers.Therefore, it is necessary to place certain restrictions to dismissing a worker such as justifiable reasons and process.

– Penalties are necessary for companies violating the laws, which are designed to prevent
the misuse of the right of dismissal.
On the other hand, the Labor Standards Act was amended in February 1998 allowing an immediate execution of a dismissal for managerial reasons in order to improve the flexibility of the labor market.
– That would be the case when deteriorating business makes it necessary to conduct a
business transfer, merger or acquisition in order to avoid further deterioration of the
business.

What are the tax benefits for venture start-ups and start-up SMEs?

Various benefits are given to start-up SMEs (for SMEs established outside the metropolitan area before Dec.31, 2006) and venture start-ups (confirmed as a venture start-up company by the SMBA within two years of its establishment). The benefits include reduction of national taxes such as corporate tax and income tax, as well as local taxes such as acquisition tax and registration tax.

 Relevant RegulationDetails
Corporate Tax
Income Tax
Art. 6 of the Special Tax Treatment Control Act50% tax reduction from the tax year in which the initial profits were recorded until five years from the beginning of the following tax year.
Royalty TaxArt. 116 of the Special Tax Treatment Control ActNo stamp duty for documents such as certificate, bank account or contract needed for the application of a loan at a financial institution, if the loan is applied for within two years of business establishment. However, the only businesses that are eligible are those established pursuant to the Support for Small and Medium Enterprise Establishment Act.
Registration TaxArt. 119 of the Special Tax Treatment Control ActNo registration tax for assets needed for businesses that are acquired within two years after business establishment.
Special Tax for Rural DevelopmentArt. 4 of the Special Tax for Rural Development ActNo Special tax for rural development (20% of tax reduction) is levied on tax reductions of corporate tax, acquisition tax, registration tax or income tax of the established SME.
Property Tax
Comprehensive Land Tax
Art. 121 of the Special Tax Treatment Control Act50% reduction of property tax and comprehensive land tax for five years from the date of business establishment for assets in possession of the company and needed for the business activities of the company.