Global company acquisitions safely, Law firm Veat’s secret.

Law firm Veat received a request from an Indonesian corporation (hereinafter referred to as the “client”) with shares held by a Korean, and proceeded with drafting an Indonesian corporate acquisition agreement and providing acquisition advice.

Law firm Veat, from the perspective of the acquirer, set forth clauses restricting contract termination and limiting damages claims in the event of a breach of representations and warranties, so as to accurately assess the information and financial soundness of the company being acquired.

Also, in the event that the information provided by the company being acquired differs from the actual situation or problems arise, safety measures were established to allow for termination of the transaction and restoration to the original state, and the ability to claim damages was limited to a certain amount, simultaneously securing fairness and stability.

We also carefully reviewed the securities acquisition reporting and foreign exchange transaction reporting procedures, which are essential for the acquisition of shares of a foreign corporation. We helped the client by smoothly conducting the preparation of reporting documents and execution of procedures to comply with the foreign exchange transaction law and regulations related to overseas direct investment in this transaction for the acquisition of shares of an Indonesian corporation.

Reporting Procedures for Stock Transactions Between Residents and Non-Residents

Overseas M&A transactions involve stock transactions, and stock transactions between residents and non-residents may require reporting according to the applicable law.

If a resident acquires shares of a foreign corporation, it may be subject to overseas direct investment reporting if they acquire more than 10% of the total number of shares or the total investment, or if an executive dispatch or technology provision contract is concluded, even if it is less than 10% for the purpose of participating in management.

Also, if a non-resident acquires shares of a domestic corporation, foreign investment reporting may be required if the investment amount is 100 million won or more and acquires more than 10% of the total number of voting shares or dispatches an executive.

Therefore, in transactions between residents and non-residents, appropriate reporting procedures should be identified and implemented according to the conditions and scale of the transaction. Failure to do so may result in sanctions or make it difficult to proceed smoothly, so it is important to receive assistance from a legal professional who deeply understands related legislation such as the Foreign Exchange Transaction Act and the Foreign Investment Promotion Act to conduct accurate reporting.

Based on the experience of successfully executing various domestic and overseas M&A transactions, Law firm Veat designs detailed clauses to reduce potential disputes that frequently occur in global M&A and systematically analyzes legal risks that may arise during the acquisition process, providing clients with the optimal solutions.

Veat operates a foreign exchange reporting center and accurately determines whether reporting is necessary based on the nature of the transaction, such as overseas direct investment reporting, foreign investment reporting, and securities acquisition reporting, and promptly supports the procedures. In particular, we provide one-stop service for preparing and submitting reports, helping clients to successfully complete the complex reporting process without any problems.

In this way, Veat provides clients with optimized legal advice for the overseas corporation’s entry into the domestic market and M&A transactions. We thoroughly respond from initial contract drafting and due diligence to transaction closing and reporting procedures, overcoming legal and institutional barriers to support the company’s successful growth.

If you need legal advice for various corporate acquisitions and investment transactions, please contact Law firm Veat at any time.

From contract drafting to transaction procedures, M&A attorneys will carefully advise to minimize the client’s legal risks and help with smooth completion of the transaction.

Thank you.

Law firm Veat