Legal Frameworks and Regulations for Business in South Korea

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Business Law & International Context

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Introduction
South Korea is a sovereign state which is a part of East Asia. The country is located in
the southern part of the Korean Peninsula. The growth of the country is dependent on
foreign investments; therefore, it encourages international organisations to invest in the
country. The country has enacted the Foreign Investment Protection Act 1988 which is
focused on providing incentives to parties who invest in the country. These incentives
include financial support, cash grants, tax reliefs, industrial locations, and others. The
organisations which conduct business in the country are categorised into two types which
include corporations and private businesses. These organisations are further categorised
into four subtypes which include general partnerships (Hapmyeong Hoesa), joint stock
corporations (Chusik Hoesa), limited liability partnerships (Hapja Hoesa) and limited liability
corporations (Yuhan Hoesa) (PKF, 2018). There are various legal frameworks and regulations
which are implemented on the organisations operating in South Korea.
Legal Concepts Applicability in South Korea
Legal System In South Korea, there are two key sources of law which apply to
the country which include primary and secondary sources. In the
primary sources of law, treaties, rules, legislation, and regulations are
included. The secondary sources include cases, journals, law reviews
and archives. In South Korea, the ruling or precedent of the court is not
considered as a law. However, these rulings carry strong values under
the Supreme Court. In South Korea, there are six basic codes in its legal
system which includes criminal code, commercial code, civil code, code
of criminal procedure, code of civil procedure and constitution (LOC,
2018).
Other than these codes, there are various other written laws in
South Korea as well. These laws include rules made by Supreme Court,
directions, rules, notices of government ministers, enforcement or
Presidential decrees, the National Assembly passes statutes, treaties
under article 6 (1) of the constitution and ministerial ordinances

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(Latestlaws, 2018). Although these are not considered as law, however,
they govern the functions of public servants.
Intellectual
Property
The Korean Copyright Act 1957 is the legislation which provides
provisions regarding copyright protection. This act was introduced in
the Berne Convention which was happened for the Protection of
Literary and Artistic Work (WIPO, 2018). Moreover, this act was
amended by the government of South Korea in 2011. The reason for
amendment was preparing it as per the terms of the Free Trade
Agreement which is formed between European Union and South Korea.
Organisations did not have to get their copyright registered in
South Korea, and their trademarks are protected by the Trademark Act.
The parties have to register these in the Korean Intellectual Property
Office. In the case of patents, the Utility Model Act and the Patent Act
provides provisions which are used by the Korean Intellectual Property
Office for their protection (Yoon, 2015). Parties can get a patent for
both products and methods; however, protection is available for
products by the Utility Model Act.
Sale of Goods The Sale of Goods provides the provisions regarding imposition
of sales tax rates for customers in South Korea. This tax is imposed on
the services which are purchased by customers. Currently, the tax rate
which is imposed on services of customers is 10 percent (Trading
Economics, 2018). In South Korea, various registered commissioned
agents are appointed as registered trading company which perform the
work of establish branch sales offices and hiring staff members.
Moreover, the provision of the Commercial Act 2010 applies to
the guidelines given under the Sale of Goods. Under this legislation, five
classifications are made on which the tax is imposed which include
maritime commerce, general provisions, insurance, companies, and
commercial activities. The commercial activities are governed under
Part II of this act. In this part, provisions regarding sales of movable
properties are given along with agency and advertisement activities