Acquisition for non-profit purposes

– It is possible to acquire land without establishing a separate branch or corporation.
However, in this case, leasing land or conducting other profit-making activities is not
allowed.
Acquisition for profit-making purposes
– According to Art. 614 of the Commercial Act, it is obligatory to establish a branch or
corporation.
Art. 614 of the Commercial Act
– According to Art. 614 of the Commercial Act, it is obligatory to establish a branch or
corporation.
Art. 614 of the Commercial Act
– Paragraph 1: A foreign company intending to engage in business in the Republic of
Korea shall appoint a representative in the Republic of Korea and shall establish a
business office.

If a foreign company establishes a separate branch or corporation after acquiring real estate for the purpose of lease or other profit-making activities, the company has to pay acquisition and registration tax when changing the ownership of the real estate. For that reason, it is recommended to acquire real estate after establishing the branch or corporation in order to avoid the payment of the taxes.In recent days, companies conclude contracts of sale & lease due to lack of capital. This also is a profit-making activity and therefore the foreign company needs to set up a branch or company in Korea.

– Even if a foreign company does not have a business office in Korea, it is possible to
register the acquired real estate. The registration number for real estate registration
can be obtained at the competent city/”gun” (county)/”gu” (district) office.

Required documents for the issuance of a registration number are: corporate registration issued by the relevant country, proof of the status and address of the representative.

There are three ways to obtain the D-8 foreign investment visa:

1. The foreigner goes to any overseas Korean government representative office (embassy,
consulate, etc.) with the required documents and applies directly for the visa, if the
period of sojourn is less than one year.

2. The inviting party in Korea goes to the relevant immigration office and gets the
certificate for recognition of visa issuance and conveys it to the invited person overseas.
The invited person then goes to an overseas Korean government representative office
and submits the certificate and the passport to obtain the D-8 visa.

3. If due to unavoidable reasons, the foreign investor or a dispatched employee from the
overseas parent company as an essential professional manpower, could not get a D-8
visa and entered Korea, an application for a change of sojourn conditions can be filed at
the immigration office or Invest KOREA. Then it is possible to change the status and
obtain a D-8 visa.

It is required to enter Korea by first obtaining a short-term business visa (C-2) for preparing the establishment of a foreign-invested company, and then change the status to a D-8 visa after completing the registration of the company.

The two Chinese nationals can be regarded neither as dispatched employees nor as individual investors, but as employees directly employed by the foreign-invested company in Korea. Therefore, they must apply for the E-7 visa (other particular occupations) and not the D-8 visa.

Usually 25% withholding tax is applied to profits that are wired overseas. However, the Republic of Korea has established tax agreements with the majority of countries except for Hong Kong and Taiwan. According to the individual agreements the withholding tax rate for the corresponding country is set at 5% – 15%.

According to the Customs Act, the employment of the worker has to be ransferred and M&A alone is not a justifiable reason enough to undertake a restructuring.However, if restructuring is unavoidable, and meets the necessary requirements for under-taking a justified restructuring procedure, the two parties can merge after the restructuring or do the restructuring procedure after the merger.

Labor union membership for people who are not workers of the company is prohibited, and a worker dismissed from a company has thus, in principle, lost the right to membership of the labor union.However, if the worker was dismissed on grounds of his activities in the labor union, the worker can apply for relief at the Labor Relations Commission. In that case, the worker remains a member of the union until a decision is made by the Central Labor Relations Commission.

The wage system in Korea is based on an average wage and ordinary wage. The average wage is the basis for calculating severance pay and remuneration for accidents, whereas the ordinary wage is used for calculating additional allowances such as overtime payments.
In order to simplify the wage system, the dual system of average wage and ordinary wage should be changed to a simplified system of a standard wage.
The elements to be included in a standard wage would be of much interest for both the labor and management, so that much time will be needed to gather opinions from both parties, as well as academic circles, before reaching any final conclusions.

People falling into the following categories cannot possess more than 49% of total issued shares of the key communications companies:

– Foreign nationals or foreign governments;
– A company of which a foreign national or government is in possession of more than
15% of the total issued stocks and is the major stockholder.
A foreign national cannot become the majority shareholder of Korea Telecom.
– However, it is only possible when possessing less than 5% of shares.

A Korean national with permanent residence of a foreign country is not a foreigner pursuant to the Foreigner’s Land Acquisition Act. Therefore, the process according to the land acquisition notification is not necessary, but the inflow and outflow of capital need to be notified pursuant to the Foreign Exchange Transactions Act, because according to that Act, the overseas Korean national is a non-resident.Required documents for transferring ownership

1. Social registration card (if still existent);
2. If the social registration card is cancelled, then the following documents are needed:

– Proof of address or proof of residence (issued by an overseas public institution, or
notarized by a foreign notary office);
– Real estate registration number issued by the registry division of the Seoul District
Court (Tel. 82-2-530-1892).

When applying for the registration number, the following documents need to be submitted:

– Certificate of registration of overseas Korean (issued by a Korean embassy or
consulate overseas);
– Family register;
– Power of attorney (if proxy files application);
– Application through mailing service is available.

Services regarding visa matters for foreigners include qualification for sojourn, approval for the change of conditions for sojourn, approval for extension of the visa, approval for activities not included in the present visa status, addition and change of workplace, and approval for re-entry.
Invest KOREA deals with the approvals for the change of conditions for sojourn, for extension of the visa, and for re-entry of foreign investors eligible for the D-8 visa and their families