Kent is a senior foreign attorney and partner at APEX LLC, a leading law firm in Korea. Kent is a member of the banking & finance team and heads the International Practice Group. Kent represents major Korean financial institutions investing overseas as well as foreign clients with business interests in Korea. His areas of specialty include corporate finance, project finance, M&A, joint ventures, foreign investment, cross-border transactions and international arbitration. Prior to joining APEX LLC, he practised in top law firms in the US, Korea, New Zealand and Cambodia. Kent has published numerous journal articles and given lectures on foreign investment, REITs, project financing and international tax regimes. Kent has been on the Board of Directors of The Kiwi Chamber (New Zealand Chamber of Commerce in Korea) since 2009.
Dear Kent Shi,
First a very warm welcome to our Experts Corner. Your involvement is very much appreciated.
Quite often people especially entrepreneurs who wants to do a business start-up with Korean Companies bumps into difficulties with the koreans concerning; written contracts. As said earlier the koreans likes very much an oral agreement after a long time of -courting- each other. But for western entrepreneurs(SME) its very difficult to proceed the business deal without a written contract. And even if the koreans are willing to sign an agreement they often wants to be written with a lot of -grey area- in the content.
Personally I adviced several times to SME-companies to go for a sort of receiving a (single use) -Certificate- by the koreans which they(european counterpart) could show to their european bankers in order to show the reliablity of the korean business-contact in order to receive a -go- for financial investment. Also I advised in cases according to import/export business to write an extended L/C to exclude the -grey area- between Western & Korean Companies. Also the same with working with INCO-terms.
My question for you is what you can advise as a lawyer some additional info or different info then written here above to improve dealing business between western & korean companies(SME)?
I appreciate you kicking off with a thoughtful and interesting question concerning Western companies doing business with Korean companies. Foreigners doing business with Korea can often encounter disputes with the Korean counterparty (but no more than say, China or other parts of Asia).
In most Western jurisdictions, a contract involves "a meeting of the minds". In Korea, a contract can seem to equate to a rough working agreement, subject to change depending on the circumstances. Many Koreans don’t view deviations from a contract as a breach of contract. Rather, Koreans tend to see contracts as always being flexible and subject to further negotiation. Culturally, a written contract is not the real contract; the unwritten or oral agreement one is the real contract. However, many Korean sellers will unilaterally change terms or renege on verbal promises or understandings if they feel that they can. Therefore, any written contract should be executed with these factors in mind. So, for a foreign company, how do you avoid getting ripped off?
From the buyer’s side, the following pointers are recommended:
If you’re a European company selling product into Korea, the following might decrease your chance of getting burnt:
Hopefully, noting these basics will help to facilitate business between foreign companies and Koreans and save parties from a lot of angst.
Kent - Thanks a lot for the thoughtful and helpful advice.
I'll also suggest Peter Bartholomew's recent KBC interview as a resource. About two thirds of the way though, he discusses contracts and Koreans and how to approach this sensitive topic wisely.
Thank you very much for your reply.
The main reason i liked to start with this question is that several KBC members asking me all the time the same question. They usually start a negotation with the koreans and got along the way the idea that the whole conversation is going nowhere
;-) I do hope sincelery that your answer will fill in their question. Thank you again.
I originally messaged William with this question and he suggested I contact you. Any advice you have would be greatly appreciated!:
I'm currently here teaching English on an E2 visa, but have made some contacts throughout the past couple years and have been offered an entry level position at a Korean company. (I'm really excited about this opportunity, as this was what I had eventually imagined happening when I first came to Korea!!)
However, there have been problems with how to go about getting me a visa so that I can go to work for this company. They say they can't hire me as an E-7 because I'm just entry level, not a "specialist" and they can't hire me as an E-2 because their company isn't set up with special training facilities. I'm looking into getting an F2-7 visa but that seems like it's going to take a long time.
Now, William suggested looking further into the E7 and seemed to think that even though I'm entry level, it would still be a possibility. I think I'm going to contact the company and ask them to look further into this option.
Do you have any other suggestions?
Thanks for your time,
If the F2-7 option seems too long and troublesome, I would second William's advice and take another look at the E-7. I'm not an immigration guru by any stretch, but even if the position you've been offered is entry-level, your past experience in your field/industry will be relevant, i.e. your E-7 visa will be assessed on your experience and credentials in the field/industry for which you're applying. In addition, it doesn't matter if your position doesn't fit into the typical "specialist" positions of accounting, law etc. You could have a Master's degree or several years' experience in, for example, marketing, which could satisfy the E-7 criteria.
Not sure if this is enough to go on, but hope it helps. Good luck!
Right now me and my partner are looking to sell our current business and move on to a future venture. I was wondering if you have any legal advice regarding Korea and the real estate market. Currently we live in Guri-si, Gyeonggi-do. Any advice would be helpful. We are especially curious about the average real estate commission rates, market trends for this time of year and possibly selling privately without the use of a broker.
Your assistance is much appreciated!
Thank you in advance for your help.
Kyle - Are you trying to sell real estate? Or a business?
For real estate, here's a discussion that's pertinent - http://www.koreabusinesscentral.com/group/koreaeconomicforum/forum/...
And here's a relevant discussion on selling a business - http://www.koreabusinesscentral.com/forum/topics/seeking-a-business...
Thanks for your swift reply.
We are trying to sell a business, more specifically a bar. We have quite a few resources and many contacts but I am just trying to gather as much information as possible before going through with the process. I guess my main concern is with commission rates for real estate agents. I have talked to a few agents and I feel some of them are trying to cheat me because I am both young and foreign.
I believe that real estate agent commission rates are pretty standard throughout the industry and a set formula is applied. Even so, like most things, such rates may be negotiable, depending on the agent.
A good reference on KBC for real estate is an article written by Robert Eberenz in the original Korea Economic Slice:
This information is probably more general in nature, so please feel free to contact me directly via PM for any specific legal pointers you may need for your situation. Good luck.