International Practice

# India-South Korea Cross-Border
Legal Advisory

South Korea

## South Korea Legal Services

South Korea has emerged as one of the most dynamic economic partners for India in the Asia-Pacific region. Bilateral trade between India and South Korea exceeds $27 billion annually, driven by strong commercial ties in sectors including automobiles, electronics, steel, petrochemicals, shipbuilding, and information technology. The India-Korea Comprehensive Economic Partnership Agreement (CEPA), which came into force in January 2010, has significantly deepened this relationship by reducing tariff barriers and facilitating cross-border investment flows. Korean conglomerates such as Hyundai, Samsung, LG, and POSCO have made substantial investments across India, while an increasing number of Indian IT companies, pharmaceutical firms, and manufacturing enterprises are expanding into the Korean market.

At ESB Global Law Advisory, we provide comprehensive cross-border legal counsel from our Mumbai office for Indian businesses and professionals engaging with the South Korean market. Our practice combines a thorough understanding of Indian commercial law with specialist knowledge of the Korean regulatory environment, enabling us to deliver practical, commercially focused advice that bridges both legal systems. Whether you are leveraging CEPA tariff concessions, forming a Korean subsidiary, negotiating technology transfer agreements, protecting intellectual property with KIPO, or resolving a cross-border commercial dispute, our team is equipped to guide you through every stage of the process with precision and depth.

### India-Korea CEPA & Trade Compliance

The India-Korea Comprehensive Economic Partnership Agreement is the foundational legal framework governing bilateral trade and investment between the two nations. The CEPA provides preferential tariff access on over 90% of tariff lines, covering goods ranging from auto components, textiles, and machinery to pharmaceuticals and marine products. To benefit from reduced or zero-duty treatment, Indian exporters must comply with the CEPA's rules of origin requirements, which specify the minimum local value addition or change in tariff classification necessary for goods to qualify for preferential rates. We advise Indian manufacturers and trading companies on structuring their supply chains and documentation to satisfy these origin criteria and avoid costly reassessments by Korean customs authorities.

Beyond goods, the CEPA also encompasses trade in services, investment liberalisation, and provisions on competition policy and government procurement. Indian service providers in sectors such as information technology, engineering consultancy, and financial services can access the Korean market under the services commitments of the agreement. We assist clients with market access analysis, regulatory approvals from Korean authorities including the Ministry of Trade, Industry and Energy (MOTIE), and compliance with Korean product safety and labelling standards administered by the Korean Agency for Technology and Standards (KATS). Our advisory practice also covers anti-dumping and countervailing duty investigations, safeguard measures, and trade remedy proceedings that may arise in the context of India-Korea bilateral trade.

### Company Formation & Corporate Structuring

Establishing a corporate presence in South Korea requires careful consideration of entity type, capital requirements, governance obligations, and sector-specific regulations. The most common structures for Indian investors are the Chusik Hoesa (stock corporation), which is suitable for larger operations and offers the flexibility to issue multiple classes of shares, and the Yuhan Hoesa (limited liability company), which provides a simpler governance framework for smaller ventures. Indian companies may also register a branch office to conduct revenue-generating activities in Korea or a liaison office for market research, quality control, and coordination functions that do not involve direct commercial transactions.

The incorporation process involves drafting articles of incorporation, appointing directors and a statutory auditor where required, depositing the initial capital in a Korean bank account, and registering the entity with the competent District Court Registry and the Korean National Tax Service. Foreign investment must also be reported to the Korea Trade-Investment Promotion Agency (KOTRA) or a designated foreign exchange bank under the Foreign Investment Promotion Act (FIPA). We guide Indian clients through each of these steps, including structuring joint ventures with Korean partners, negotiating shareholders' agreements that address governance, profit distribution, exit mechanisms, and technology sharing, and ensuring ongoing compliance with Korean corporate governance requirements under the Commercial Act.

### Technology Transfer & Joint Ventures

South Korea is a global leader in technology innovation, ranking among the world's top spenders on research and development as a proportion of GDP. Indian businesses frequently engage with Korean counterparts in technology transfer arrangements, collaborative R&D projects, and joint venture partnerships spanning industries such as semiconductors, automotive components, consumer electronics, renewable energy, and biotechnology. Technology transfer agreements in the Korea-India corridor must be carefully structured to address ownership of foreground and background intellectual property, licensing scope and territorial restrictions, royalty structures and payment mechanisms, confidentiality obligations, and technology improvement sharing provisions.

Joint ventures between Indian and Korean entities require particular attention to governance structures, given the distinct corporate cultures and regulatory environments of both countries. We draft and negotiate JV agreements that establish clear decision-making frameworks, deadlock resolution mechanisms, non-compete and non-solicitation covenants, and exit strategies including put-call options and tag-along and drag-along rights. Our practice also covers the regulatory approvals required for foreign investment in restricted sectors under the Foreign Investment Promotion Act, compliance with the Monopoly Regulation and Fair Trade Act administered by the Korea Fair Trade Commission (KFTC), and the registration of technology transfer agreements with relevant Korean authorities where required.

### Intellectual Property & KIPO Registration

Protecting intellectual property in South Korea is essential for Indian businesses entering the Korean market, whether through direct operations, licensing arrangements, or export of branded goods. The Korean Intellectual Property Office (KIPO) administers the registration of patents, utility models, trademarks, and industrial designs. South Korea operates on a first-to-file principle for both patents and trademarks, making proactive registration critical to securing rights before competitors or trademark squatters file pre-emptive applications. Indian applicants can file directly with KIPO or utilise international filing mechanisms including the Patent Cooperation Treaty (PCT) for patents and the Madrid Protocol for international trademark registration designating South Korea.

For patent applications, Korean law requires that inventions satisfy the criteria of novelty, inventive step, and industrial applicability. The Korea-India Patent Prosecution Highway (PPH) programme allows Indian applicants who have received a favourable examination result from the Indian Patent Office to request accelerated examination at KIPO, significantly reducing the time to grant. Trademark registration in Korea follows a classification system aligned with the Nice Classification, and applications undergo examination for both absolute grounds (distinctiveness, descriptiveness) and relative grounds (similarity to prior marks). We advise Indian clients on IP portfolio strategy, prosecution management, opposition and cancellation proceedings, licensing and technology transfer agreements, and enforcement actions including customs recordation with the Korea Customs Service, civil litigation before the Patent Court and IP Division of the Seoul Central District Court, and criminal complaints for counterfeiting and piracy.

### Immigration & Work Visas

Deploying Indian professionals to South Korea requires navigating the Korean immigration framework, which classifies visa categories by the nature and duration of the intended activity. The E-7 (Special Occupation) visa is the primary route for skilled Indian professionals including software engineers, management consultants, researchers, and technical specialists, requiring sponsorship from a Korean employer, relevant qualifications or work experience, and approval from the Ministry of Justice. The D-8 (Corporate Investment) visa is available for Indian nationals investing in or managing a Korean subsidiary, while the D-7 (Intra-Company Transfer) visa facilitates the transfer of employees from an Indian parent company to its Korean branch or subsidiary.

For short-term business activities such as attending meetings, conferences, or conducting site inspections, Indian nationals may utilise the Korea Electronic Travel Authorization (K-ETA) system for visa-free entry for stays of up to 90 days, though this does not authorise gainful employment. We advise Indian companies on selecting the appropriate visa category for their personnel deployment needs, preparing employer sponsorship documentation, ensuring compliance with Korean labour laws including minimum wage requirements and working hour regulations under the Labor Standards Act, and managing the visa renewal and status change processes. Our practice also covers the alien registration requirements applicable to foreign nationals residing in Korea for extended periods and the procedures for obtaining permanent residency (F-5 visa) where eligibility criteria are met.

### Dispute Resolution & KCAB Arbitration

Cross-border commercial disputes between Indian and Korean parties are most commonly resolved through international arbitration, which offers a neutral forum, procedural flexibility, and the advantage of enforceability across borders under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Korean Commercial Arbitration Board (KCAB) is the premier arbitral institution in South Korea, and its KCAB International Rules provide a modern, efficient procedural framework well-suited to resolving complex cross-border commercial disputes. Seoul has established itself as a leading arbitration seat in Asia, supported by Korea's strong rule of law, modern arbitration legislation under the Korean Arbitration Act (modelled on the UNCITRAL Model Law), and excellent hearing facilities.

We represent Indian clients in KCAB arbitration proceedings as well as in arbitrations administered by other institutions such as the International Chamber of Commerce (ICC) and the Singapore International Arbitration Centre (SIAC) where India-Korea disputes are seated in third-country jurisdictions. Our practice also encompasses mediation and conciliation proceedings, which are increasingly utilised as a cost-effective preliminary step before formal arbitration. For disputes involving the India-Korea Bilateral Investment Treaty, we advise on investor-state dispute settlement mechanisms. On the enforcement side, we assist with the recognition and enforcement of Korean arbitral awards in India under Section 48 of the Arbitration and Conciliation Act, 1996, and the reciprocal enforcement of Indian awards in South Korea, ensuring that favourable outcomes are translated into practical results.

### Tax Planning & India-Korea DTAA

The India-South Korea Double Taxation Avoidance Agreement (DTAA) is the key treaty governing the allocation of taxing rights between the two jurisdictions and providing relief from double taxation on cross-border income flows. The DTAA covers income categories including business profits, dividends, interest, royalties, fees for technical services, and capital gains, with specified withholding tax rates that are generally lower than the domestic rates of either country. Indian businesses with Korean operations must carefully structure their activities to optimise their position under the DTAA while maintaining compliance with the tax laws of both India and South Korea.

Key tax planning considerations for India-Korea operations include assessing Permanent Establishment (PE) exposure for Indian companies conducting business activities in Korea, structuring royalty and technical service fee arrangements to benefit from reduced DTAA withholding rates, ensuring transfer pricing compliance for related-party transactions under both Indian and Korean transfer pricing regulations, and navigating Korea's corporate income tax system which imposes rates of 9% to 24% depending on the level of taxable income. We also advise on Value Added Tax (VAT) registration and compliance in Korea, the interaction between Indian controlled foreign company (CFC) rules and Korean operations, and the practical procedures for claiming DTAA benefits including the issuance of Tax Residency Certificates and the filing of withholding tax refund applications with the Korean National Tax Service.

### Our India-South Korea Legal Services Include

- India-Korea CEPA tariff advisory, rules of origin compliance, and trade facilitation
- Korean company incorporation (Chusik Hoesa, Yuhan Hoesa) and branch registration
- Joint venture structuring, shareholders' agreements, and partnership documentation
- Technology transfer agreements, R&D collaboration, and licensing arrangements
- Patent, trademark, and design registration with KIPO
- Korea-India Patent Prosecution Highway (PPH) applications
- E-7, D-8, and D-7 visa advisory and employer sponsorship documentation
- K-ETA guidance and short-term business visitor compliance
- KCAB International arbitration and cross-border dispute resolution
- India-Korea DTAA advisory, transfer pricing, and PE risk assessment
- Korean labour law compliance and employment contract drafting
- Anti-dumping, trade remedy, and customs dispute advisory
- Foreign investment reporting under FIPA and KOTRA procedures
- IP enforcement, customs recordation, and anti-counterfeiting measures
- Korean regulatory approvals and sector-specific licensing

FAQ

## Frequently Asked Questions

### How does the India-Korea CEPA benefit Indian businesses exporting to South Korea?

The India-Korea Comprehensive Economic Partnership Agreement (CEPA), in force since January 2010, eliminates or reduces customs duties on a wide range of goods traded between the two countries. Indian exporters can access preferential tariff rates on over 90% of Korean tariff lines, including pharmaceuticals, textiles, machinery, and agricultural products, provided they comply with the rules of origin requirements specified under the agreement. The CEPA also covers trade in services, investment protection, and mutual recognition of qualifications in certain professional sectors. ESB Global advises Indian businesses on structuring their exports and investments to maximise the benefits available under the CEPA framework.

### What are the options for an Indian company to establish a business entity in South Korea?

An Indian company can establish a presence in South Korea by incorporating a Korean subsidiary as a Chusik Hoesa (stock corporation) or Yuhan Hoesa (limited liability company), registering a branch office of the Indian parent entity, or setting up a liaison office for non-revenue activities. Incorporation requires registration with the relevant District Court Registry, filing with the Korean National Tax Service for a business registration number, and meeting minimum capital requirements where applicable. The choice of entity depends on the nature and scale of intended operations, tax planning objectives, and the degree of operational independence desired from the Indian parent company.

### How can Indian professionals obtain work authorisation in South Korea?

Indian professionals seeking to work in South Korea must obtain an appropriate visa category based on the nature of their employment. The E-7 visa (Special Occupation) is the most common route for skilled professionals including IT engineers, researchers, and management specialists, requiring sponsorship from a Korean employer and approval from the Ministry of Justice. The D-8 visa is available for corporate investors and intra-company transferees establishing or managing a Korean subsidiary. Short-term business visitors may use the K-ETA (Korea Electronic Travel Authorization) system for stays of up to 90 days without a visa, though this does not permit gainful employment. ESB Global assists with visa strategy, employer sponsorship documentation, and compliance with Korean immigration regulations.

### How are intellectual property rights protected for Indian businesses in South Korea?

South Korea has a robust intellectual property regime administered by the Korean Intellectual Property Office (KIPO). Indian businesses can register patents, trademarks, and industrial designs directly with KIPO or through international mechanisms such as the Patent Cooperation Treaty (PCT) for patents and the Madrid Protocol for trademarks. South Korea operates on a first-to-file system for both patents and trademarks, making early registration essential to secure rights. KIPO also handles utility model registrations and provides accelerated examination programmes including the Korea-India Patent Prosecution Highway (PPH), which allows Indian applicants with granted Indian patents to fast-track examination in Korea. ESB Global advises on IP portfolio strategy, registration procedures, and enforcement actions including customs border measures and litigation before the Korean IP courts.

### How are India-South Korea commercial disputes typically resolved?

India-South Korea commercial disputes are commonly resolved through arbitration administered by the Korean Commercial Arbitration Board (KCAB), which is the leading arbitral institution in South Korea and handles a significant volume of international cases. Arbitration seated in Seoul under KCAB International Rules offers a neutral, enforceable, and efficient mechanism for resolving cross-border disputes. Korean arbitral awards are enforceable in India under the New York Convention, to which both countries are signatories. Alternatively, disputes may be resolved through the Korean court system, though this is generally less preferred for international matters due to language barriers and longer timelines. Mediation is also available through KCAB and is increasingly encouraged for commercial disputes.

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Korea Operations?

## Expert India-South Korea
Legal Counsel

Navigate the Korean legal landscape with confidence. Our cross-border team provides strategic counsel for Indian businesses at every stage of their South Korea operations, from CEPA-driven market entry to KCAB dispute resolution.

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