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Oh, Hyunjoo --- "Review of Korean laws pertinent to Foreign Financial Institutions' Korean business: with emphasis on a few issues that are frequently raised in practice" [2012] ELECD 873; in Kim, Hwa-Jin (ed), "Korean Business Law" (Edward Elgar Publishing, 2012)

Book Title: Korean Business Law

Editor(s): Kim, Hwa-Jin

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781781003398

Section: Chapter 7

Section Title: Review of Korean laws pertinent to Foreign Financial Institutions' Korean business: with emphasis on a few issues that are frequently raised in practice

Author(s): Oh, Hyunjoo

Number of pages: 25

Extract:

7. Review of Korean laws pertinent
to Foreign Financial Institutions'
Korean business: with emphasis
on a few issues that are frequently
raised in practice
Hyunjoo Oh

I. OVERVIEW

There are two ways in which foreign investment firms and foreign banks
(each a "Foreign Financial Institution") do business in Korea ­ (1) estab-
lish a local operational base in Korea in the form of a subsidiary, branch,
etc. and have that local operational base obtain relevant licenses and
offer services onshore (the "Onshore Operation") and (2) offer services to
Korean residents directly from an offshore base without having any local
operational base (the "Offshore Operation").
In case of the Onshore Operation, the local operation base and its activi-
ties would be subject to the regulations that Korean financial institutions
would be subject to regarding such activities except for those matters that
statutes say otherwise. In the case of the Offshore Operation, a Foreign
Financial Institution's activities are generally deemed to take place outside
Korea, to have little effect on Korea and to be insufficient grounds for
imposing license requirements on such Foreign Financial Institution.
However, if such activities are deemed to have direct impacts on the
Korean market, such Foreign Financial Institution would be subject to
pertinent Korean regulations, such as license requirements (e.g. foreign
non-discretionary investment advisors or discretionary investment advi-
sors are required to obtain licenses before they can provide services to
domestic residents from their offshore bases) and registration statement
requirements (e.g. a public offering ...