If you are a foreign investor or company with a stake in a Korean business, your shareholder rights are protected by the Korean Commercial Act on essentially the same terms as a domestic shareholder. The difference is execution: these disputes are won on Korean procedure, evidence, and timing. This guide outlines how foreign shareholders enforce their rights — and where counsel is decisive. It reflects the practice of Donghyun Kim, Attorney at Law (former Kim & Chang, Corporate Disputes & M&A; Ministry of Justice, International Legal Affairs).
Your rights as a foreign shareholder in Korea
- Records inspection: the right to inspect and copy accounting books and records, subject to statutory thresholds.
- Right to demand a general meeting: shareholders holding at least 3% of issued shares may request an extraordinary general meeting and petition the court if the board fails to act.
- Shareholder proposal: the right to propose agenda items and resolutions for the general meeting.
- Derivative action: the right to sue directors on the company’s behalf for breaches that harm the company.
- Injunctive relief: the right to seek provisional remedies before a vote or transaction causes irreversible harm.
Common dispute scenarios for foreign capital
Board control and director removal
When a local partner or founder entrenches control, foreign investors may need to remove a director or suspend their acts. A director can be removed by special resolution; where that fails despite misconduct, a qualifying shareholder may seek removal through the court and a provisional injunction suspending the director’s duties.
Dilution and down-round abuse
New share issuances timed to dilute an outside investor are a frequent flashpoint. An injunction against the new share issuance can preserve your position while the dispute is resolved.
Contested general-meeting resolutions
Where notice, quorum, or voting is defective, resolutions can be challenged — and, in urgent cases, suspended by injunction before they take effect.
Why deal-side experience matters in a dispute
Shareholder and board disputes sit on top of the underlying deal — the investment agreement, the shareholders’ agreement, the cap table. An attorney trained in M&A at Kim & Chang reads the transaction and the conflict as one problem, which shortens the path to leverage.
Frequently asked questions
Can a foreign shareholder demand a general meeting in Korea?
Yes — shareholders holding at least 3% of issued shares may request an extraordinary general meeting and petition the court if the board does not act.
How do you remove a director?
By special resolution; failing that, a qualifying shareholder may seek removal through the court and an injunction suspending the director’s duties.
What injunctions are available?
Suspension of a director’s duties, appointment of an acting director, injunctions against dilutive share issuance, and injunctions against contested resolutions.
This guide is general information, not legal advice, and does not create an attorney–client relationship. Outcomes depend on specific facts.
Facing a shareholder or board dispute in Korea? Email a short summary to info@saemunan.com or call +82-2-2138-1341. Counsel by Donghyun Kim, Attorney at Law · Saemunan Law Office, Seoul.