The planned changes, prompted by the rising number of limited companies and criticism that many multinational companies were bypassing local regulations, are said to have support of both the ruling and opposition parties.

However, issues remain over the degree of disclosure.

The Financial Services Commission had drawn up a revision that would require limited companies to be audited and to disclose the results, but the proposal was rejected by the presidential committee on regulatory reform, saying that such changes would lead to overregulation. 


Related article : Korean gov't seeks closer monitoring on foreign firms' limited Korean arms


Meanwhile, the number of limited companies has grown, and with it, concerns that many foreign companies were operating under the radar of the financial authorities.

According to South Korean financial authorities, the number of limited companies came to 25,929 in 2015, rising 52.5 percent from the 16,998 recorded in 2010.

The rise is thought to have been driven in part by the 2011 Commercial Act revision that eased requirements for establishing a limited company. Many multinational companies opted for the limited form in establishing South Korean operations, while others have changed existing subsidiaries into limited companies.

Companies that changed their South Korean operations into limited companies include Microsoft, Apple, Facebook and Oxy Reckitt Benckiser. Microsoft Korea took on the new form in 2006, Apple in 2009, and Oxy Reckitt Benckiser in 2011. Others such as Tesla and Alibaba set up their South Korean operations as limited companies from the outset.

By Choi He-suk (cheesuk@heraldcorp.com)