| Real Estate Development Law |
The Real Estate Development Law should be amended to reflect realities of the market.
Unrealistic, inaccurate qualification of experts
Foreign development companies usually hire minimum staffing while outsourcing from the most qualified professional companies as occasion demands.
There is little or no need in true development companies for many of the “experts” as outlined in the qualifications.
In the event a person works in an investment firm, was highly educated abroad and has qualifications abroad, and then moves to a developer, this person will often not qualify under this law as his previous experience and qualifications do not fall specifically under any of the above, restrictive categories.? The law needs to be amended to include such employees who are extremely qualified and highly sought after by developers.
Where a person works for a company overseeing an investment or development, but not in the actual Special Purpose Company (“SPC”), they will not be credited with experience despite being intimately involved with the project from a head office level.? These employees need to be given credit for their work at the head office level.
Foreign developers who have majority ownership in local development companies should be able to submit their qualifications & work experience from their home country.
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It is necessary to take into account not only financial capabilities but also expertise, and soundness to make a complete evaluation of a developer.
Korea is in the process of reforming institutions to ease entry barriers in the real estate development market and facilitate development projects.
The paid-in capital for real estate development will be cut from 500 million won to 300 million won and one billion won to 600 million won. Therefore, financial burdens of small developers and individuals will be alleviated. |
| Paid-In Capital Requirement |
Perhaps a reduction on the paid-in capital requirement and simpler incorporation procedures.
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Paid-in capital above a certain level is necessary to ensure the stability of REITs and for early listing. However, Korea is considering a plan to cut the minimum paid-in capital and initial capital (one billion won) to promote REITs.
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