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Published: 04 Nov 2008 03:51:49 PST

South Korea

Business Environment

Business practices

For further information: Blog of Korean Business Culture
For further information: Dong Business in Korea
For further information: Soft Landing Korea
Closed hours and days: Public office and lots of private offices are closed on Saturday and Sunday.
Banks: from 9.30 to 16.30, Monday to Friday, from 9.30 to 13.30 on Saturdays.

Public holidays

New Year's Day	January 1st
Lunar New Year's Day	January 1st of Lunar calendar
Independance Movement Day	March 1st
Labor Day	May 1st
Children's Day	May 5
Buddha's Birthday	April 8 of Lunar calendar
Memorial Day	June 6
Constitution Day	July 17
Liberation Day	August 15
Chuseok (Korean Thanksgiving Day)	August 15 of Lunar calendar
Nation Foundation Day	October 3
Christmas	December 25

Compensation day: When a public holiday falls on a Saturday or Sunday, it is not compensated.

Periods when companies usually close

Lunar New Year's Day Season	January 1st of Lunar calendar
Chuseok (Korean Thanksgiving Day)	August 15 of Lunar calendar
Summer vacation season	July or Aug according to companies
Winter vacation season	According to companies, between Christmas and New Year's day

Standards

National standards organizations

Korean Agency for Technology and Standards (KATS)

Integration in the international standards network

International Level: The International Standard organization (ISO); The International Electrotechnical Commission (IEC).

Asia-Pacific Level: The APEC/SCSC; The ASEM/TFAP/SCA, Trade Facilitation Action Plan/Standards and Conformity Assessment of the Asia-European meeting; The Pacific Area Standards Congress (PASC).

Classification of standards

KS consists of 16 categories from General to Information Industry and is divided into three parts. More information available on The Korean standards website.

Online consultation of standards

Korean Standards Service Network

Certification organizations

Korean Standards Association (KSA)

Legal framework

Independence of justice: Yes
Equal treatment of nationals and foreigners: Yes
The language of justice: Korean
Having recourse to an interpreter: Yes. With the rapid increase of the crime committed by the foreigners, the Korean courts are trying to staff up more necessary interpreters.
Sources of the law and legal similarities: The system is modeled on European systems with Anglo-American influences like Japan.
Consulting national laws online: Total Korean law service of Supreme Court
Total Korean law service
Ministry of Government Legislation (MOLEG)
Korea Legislation research Institute (KLRI)
Ministry of Finance and Economy (MOFE)

Intellectual Property

National organizations: Korea Industrial Property Office (KIPO)
Korea Institute of Patent Information (KIPI)
International Intellectual Property Training Institute (IIPTI)
Korea Copyright Commission
Korea Patent Attorneys Association (KPAA)
Regional organizations: Intellectual Property Rights Experts Group (IPEG)
International membership: Member of the WIPO
Signatory to the Paris Convention
Membership to TRIPS

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	Patent Law	20 years	Patent Cooperation Treaty Strasbourg agreement concerning the International Patent Classification
Trademark	Trademark Law	10 years renewable every 10 years	Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design	Design Law	15 years
Copyright	Copyright Law	50 years after the death of the author (It will be 70 years from the end of 2009 or 2010)	Berne convention for the protection of Literary and Artistic Works Convention for the Protection of Producers of Phonograms against unauthorized duplication of their phonograms Rome convention for the protection of performers, producers of phonograms and Broadcasting organizations WIPO copyright treaty WIPO performances and Phonograms treaty
Industrial Models	Utility Model Law	10 years

Tax rates

Consumption taxes

Nature of the tax: Value Added Tax (VAT)
Tax rate: 10%
Reduced tax rate: None.
Other consumption taxes: Special Excise Tax, Liquor, Tobacco Tax, Stamp, Energy, Environment, Transportation, Auto Tax, etc.

Corporate taxes

Tax rate

KRW 100 million or less	:	13% of tax base
More than KRW 100 million	:	KRW 13 million + 25% of the amount in excess of KRW 100 million

Tax rate for foreign companies

Taxation is based on the annual business income. Since most of the foreign investors are corporations and thus liable to pay it, corporate tax makes up the largest portion of the total taxes related to foreign investment. Under the tax agreement, only the income from the permanent establishment of a foreign company is taxable. Permanent establishments here refer to branches, warehouses, stores, or other establishments for installment or construction projects. A company which has a right to sign a contract or which conducts its business and trade through an agent who on behalf of the company buys or sells its stocks is also subject to tax. More information on Invest Korea website.

Capital gains taxation

The capital gains tax applies to the income coming from the transfer of certain assets by an individual in a given year. A corporation is not subject to capital gains tax, and is instead taxed on income generated from this transfer in a form of corporate tax. More information on Global Seoul website.

Main allowable deductions and tax credit

Tax deduction or exemption for farming cooperatives, fisheries cooperatives, forestry development income, small start-up businesses, start-up companies, foreign investment, disaster loss, Investment, R&D, etc. Consult Invest Korea website.

Other corporate taxes

Urban Planning Tax, Business Place Tax, Community Facility Tax, Local Education Tax, etc.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: Tax Treaty list of National tax service
Whithholding taxes
Bilateral agreement

Sources of fiscal information

Tax Authorities: National Tax Service
Other domestic resources: Seoul City

Accounting rules

Tax year

From January 1st to December 31st.

Accounting standards

Statement of Korea Accounting Standards.

Accounting regulation bodies

Financial Supervisory Service (FSS)
Korea Accounting Institute (KAI)

Accounting reports

Balance sheet, income statement, statement of cash flows, explanatory notes.

Publication

1)The companies quoted in the stock-exchange and KOSDAQ market have to follow the disclosure regulation:
- Periodic disclosure : the business reports after the end of a fiscal year, semiannual reports, and quarterly
reports, etc.
- Timely disclosure : major business details as outlined in the Securities Exchange Act and the Disclosure Regulations of the
KRX-Stock Market
- Special disclosure : merger, ·spin-off, reports of business takeover & transfer, reports of acquisition &
disposal of treasury stocks, etc.

2) External Auditing companies are required to disclose Audiiting report.

3)Corporations that issue securities are required to disclose public securities registration statements, business prospectuses, records of securities issuances, etc.
More information on Korea exchange website.

Professional accountancy bodies