SOUTH KOREA Law and Practice Contributed by: Hyeon Kang, Tae Kyoon Kim, Seungil Hong and Sung-Ho Moon, Bae, Kim & Lee LLC
• RETF – not applicable; • RECF – KRW100 million; and • PFV – KRW5 billion. 5.5 Applicable Governance Requirements The ownership limitation for each type of entity is as follows: • stock corporation – not applicable; • limited liability company – not applicable; • CR-REIT – not applicable; • general REIT – up to 50% by any one share - holder (with certain exceptions); • RETF – must be owned by more than two investors (with certain exceptions); • RECF – must be owned by more than two investors (with certain exceptions); and • PFV – at least 5% of the shares must be owned by financial institution(s). There are no public offering-related require - ments that apply to the various types of entity except for: • general REIT – at least 30% of the shares must be put up for public offering (with cer - tain exceptions). Restrictions on external financing for each type of entity are as follows: • stock corporation – not applicable; • limited liability company – not applicable; • CR-REIT – permitted within double (or ten times, under certain exceptions) the amount of its net assets; • general REIT – permitted within double (or ten times, under certain exceptions) the amount of its net assets; • RETF – permitted within double the amount of its net assets (with certain exceptions);
• RECF – permitted within double the amount of its net assets (with certain exceptions); and • PFV – not applicable. Qualifications for assets invested in by each type of entity are as follows: • stock corporation – not applicable; • limited liability company – not applicable; • CR-REIT – seller of the assets is a company subject to corporate restructuring; • general REIT – at least 70% of the assets are invested in real estate; • RETF – more than 50% of the assets are invested in real estate (with certain excep - tions); • RECF – more than 50% of the assets are invested in real estate (with certain excep - tions); and • PFV – investment is made in facility and security operations centre (SOC) develop - ment, natural resource development or other specific development projects that require large amounts of time and money. Requirements for real estate development pro - jects invested in by each type of entity are as follows: • stock corporation – not applicable; • limited liability company – not applicable; • CR-REIT – the investment ratio is required to be set by shareholders’ resolution, and the business plan is required to be confirmed by a licensed real estate investment consulting company; • general REIT – the investment ratio is required to be set by shareholders’ resolution, and the business plan is required to be confirmed by a licensed real estate investment consulting company;
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