New South Korean law mandates foreign game companies to appoint domestic representatives

Game companies with annual sales of at least ₩1 trillion ($700,000) or over 100,000 monthly users in Korea must appoint a domestic representative for legal compliance. 

As reported by the Korean Herald, the new law comes after a revision to South Korea’s Game Industry Promotion Act, taking effect on October 23rd. 

Under the revised act, foreign-based companies with over $700,000 in annual sales or 100,000 Korean users in the last three months of the year must appoint a domestic representative. 

Companies not meeting these thresholds may still be required to do so if they've caused significant user harm or are considered high risk. Affected companies will be notified individually by the ministry of culture, sports and tourism.

Foreign game companies that fail to appoint a required domestic representative in South Korea may face fines of up to ₩20 million ($14,000). 

Strict gambling laws

Foreign game companies’ domestic proxies in Korea will be required to comply with the Act, which includes rules against gambling-like content and mandates transparency around item drop rates and other chance-based game mechanics.

South Korea has strict gambling laws for its citizens, allowing only limited exceptions like Kangwon Land Casino and official lotteries. As a result, it has banned gambling content in several global online games, including Grand Theft Auto Online.

Moreover, domestic proxies can be held legally accountable for violations. The Game Rating and Administration Committee will decide which companies are subject to the mandate.

While the South Korean mandate differs in scope, it echoes a broader trend seen in countries like China, where foreign game companies must partner with local firms to operate.