Your annual investor meeting is in six weeks. The delegation list includes staff from a Korean pension fund — perhaps the largest LP in the room. The events team is planning what it always plans: dinners, a reception, maybe a golf outing for the LPs who arrive early. Somewhere in that plan sits a question nobody has assigned to anyone: what Korean law applies to the hospitality itself?
The law in question is Korea’s Improper Solicitation and Graft Act — enacted in 2015, in force since 2016, and universally known by its nickname, the Kim Young-ran Act. It reaches employees of a wide range of Korean public and quasi-public institutions, and its enforcement decree has been publicly amended as recently as 2023 and 2024, adjusting the hospitality-related limits — a reminder that this is a living statute, not a historical footnote.
Why it matters
The exposure here is unusually personal. Anti-graft rules attach consequences not only to organizations but to individuals — including, uncomfortably, the Korean investor personnel you are trying to build a relationship with. A hospitality misstep does not read as a technical foot-fault; it reads as having put your LP’s own staff in a compliance position. That is a relationship cost no fundraising calendar has a line for. And unlike most fund regulatory questions, this one is triggered by the events team, not the deal team — which is why it so often goes unasked.
The question map
- Who at the table is covered? Korean institutions span a spectrum from government-adjacent to fully private, and the Act’s coverage follows institutional status, not job titles. Which of your guests are within it is the threshold question.
- Does fundraising hospitality fall within the Act at all? Meals, transportation, accommodation, event access, entertainment — how the statute characterizes each, in the context of an existing or prospective investment relationship, is precisely the analysis that matters.
- What limits apply, and to what? The Act’s limits are category-specific and have moved over time. Which categories your program touches, and what the current numbers mean for it, is a question to answer before the invitations go out.
- Whose rules stack on top? The investor’s own internal code of conduct may be stricter than the statute. Which one binds the room?
- Who documents what? If the question is ever asked afterward, what record shows the program was considered rather than improvised?
Where the answer turns
Whether your hospitality program raises a Korean anti-graft issue turns on facts such as which institutions are attending, the status of their personnel, what exactly is being provided and in what setting, and how the costs are borne. Most programs can be run compliantly with modest adjustments — but the adjustments have to happen before the event, not in the post-mortem.
If Korean institutional guests are on an upcoming invitation list, the compliance pass is worth doing now — see the regulatory advisory practice overview or get in touch.