South Korea Expands English Disclosure Rules as New Labor Law Raises Corporate Risks (Image supported by ChatGPT)
SEOUL, Dec. 31 (Korea Bizwire) — A broader swath of South Korean companies will soon be required to file regulatory disclosures in English, a move aimed at opening the country’s capital markets further to foreign investors, even as a newly enacted pro-labor law is set to raise compliance risks for businesses.
Beginning May 1, the Financial Services Commission said Wednesday, mandatory English-language disclosures will be expanded to include companies with assets of at least 2 trillion won ($6.94 billion), down from the current threshold of 10 trillion won for firms listed on the benchmark Korea Composite Stock Price Index. Officials said the change is intended to improve transparency and accessibility for overseas investors as Seoul seeks to bolster the global competitiveness of its capital markets.
At the same time, companies are preparing for the implementation in March of the so-called “yellow envelope” law, a revision to the Labor Union Act that strengthens the bargaining rights of subcontracted and indirectly employed workers. The measure limits companies’ ability to file damage claims or seek provisional asset seizures against unionized workers — legal tools that labor advocates say have long been used to deter strikes.
Business groups have warned that the law could significantly expand labor-related liabilities, particularly for large conglomerates and foreign companies that rely heavily on subcontracting arrangements.
Additional changes are also on the horizon. South Korea’s minimum wage will rise 2.9 percent in 2026 to 10,320 won an hour, pushing minimum monthly labor costs to about 2.15 million won. The government said it will expand tax incentives for companies reshoring production, extending eligibility to firms that scale down overseas operations within four years of establishing or expanding domestic facilities.
Foreign companies operating liaison offices in South Korea will face tighter oversight as well. Under newly introduced rules, authorities will be able to impose fines of up to 10 million won on foreign firms that fail to submit required reports on liaison office operations or that provide false information.
Together, the measures reflect a policy shift that pairs greater market openness with stricter labor and regulatory enforcement — a combination likely to reshape the operating environment for both domestic and foreign businesses in South Korea.
M. H. Lee (mhlee@koreabizwire.com)
