[Last updated: 1 January 2024, unless otherwise noted]

Jurisdiction of incorporation and industries.

There is no specific jurisdiction of incorporation requirement for a listed company to be eligible to list on either the KOSPI Market or the KOSDAQ Market. In principle, neither the KOSPI Market nor the KOSDAQ Market restrict companies from listing on their respective markets, though listing may be restricted if it is deemed inappropriate to raise funds through the securities market, for example, in the case of adult broadcasting, gambling, loan sharking and casino businesses, as these industries may not be in line with the public interest.

Quantitative and qualitative criteria.

Financial requirements for the KOSPI Market. A domestic or foreign listing applicant for the KOSPI Market must satisfy the requirements of either A, B, C or D as laid out below. These requirements will apply regardless of whether it is a primary or a secondary listing.

Link to Table

Financial requirements for KOSDAQ Market. A domestic or foreign listing applicant for the KOSPI Market must satisfy the requirements of either A or B below. There is no difference between a primary listing and a secondary listing as regards these requirements.

Link to Table

Technology growth companies must comply with at least one of the following:

• Equity capital of KRW 1 billion (approximately US$0.77 million); or
• Market capitalization of KRW 9 billion (approximately US$6.93 million).

Operating history. A (domestic or foreign) listing applicant for the KOSPI Market must be incorporated and operating for at least three years. This requirement does not apply to a KOSDAQ Market listing applicant.

Mandatory holding. In relation to a primary listing of domestic or foreign common shares on the KOSPI Market, any person falling under any of the following subparagraphs must hold shares, subscription rights, convertible bonds, etc. (“shares, etc.”) in their possession until the period specified in the relevant subparagraph:

• The largest shareholder or a person who has a special relationship with the largest shareholder (“largest shareholder, etc.”): six months from the listing date.
• The largest shareholder, etc. who has acquired shares by exercising share options after listing: six months from the listing date.
• Any person who has acquired the shares, etc. issued by way of the third-party allotment by an applicant for primary listing within one year prior to the application date for preliminary listing review: one year from the issuance date.
• Any person who has acquired the shares, etc. held by the largest shareholder, etc. within one year prior to the application date for preliminary listing review: six months from the listing date.
• Other shareholders that the KRX deems mandatory holding is necessary for the sake of public interest, investor protection, etc.: up to two years from the listing date after a discussion with the KRX.

Notwithstanding, the KRX may waive the mandatory holding requirements for:

• The largest shareholder, etc. in cases where the relevant applicant is a company listed on an overseas securities market or a KOSDAQ-listed company for which the period of mandatory holding has elapsed as at the date of application for primary listing.
• Any person who has acquired shares issued by way of third-party allotment by a company noted in the previous paragraph within one year prior to the application date for preliminary listing review or who has acquired the shares owned by the largest shareholder, etc. of the company concerned during the same period.
• Any person who, as a specially related person of the largest shareholder of the applicant, holds less than 100 shares or any person who are exempted from mandatory holding.

In relation to a primary listing of common shares on the KOSDAQ Market, any person falling under any of the following subparagraphs must hold the shares, etc. in their possession until the period specified in the relevant subparagraph:

• The largest shareholder, etc.: six months from the listing date (in the case of primary listing of foreign shares and depository receipts ("DRs") ("foreign shares, etc."), one year).
• The largest shareholder, etc. who has acquired shares by exercising share options after listing: six months from the listing date (in the case of primary listing of foreign shares, etc., one year).
• Any person who has acquired the shares, etc. issued by way of the third-party allotment by an applicant for primary listing within one year prior to the application date for preliminary listing review: one year from the issuance date;
• Any person who has acquired the shares, etc. held by the largest shareholder, etc. within one year prior to the application date for preliminary listing review: six months from the listing date (in the case of primary listing of foreign shares, etc., one year).
• Shares, etc. acquired by venture capital or professional investors through a method other than a public offering or sale whose investment period is less than two years: one month from the date of listing.
• Shares, etc. acquired by a listing sponsor whose investment period is less than six months: six months from the date of listing.
• The largest shareholder, etc. of a paper company in cases where the largest shareholder of an applicant is the paper company: six months from the date of listing (one year in the case of technology growth companies and prompt-transfer companies).
• Other shareholders that the KRX deems mandatory holding is necessary for the sake of public interest, investor protection, etc.: up to two years from the listing date after a discussion with the KRX.

Notwithstanding the above, the KRX may waive the mandatory holding requirements for the largest shareholder, etc. in cases where the relevant applicant is a company listed on an overseas securities market or a KOSPI-listed company.

Share distribution for KOSPI Market. A domestic or foreign listing applicant for KOSPI Market must satisfy requirements A and B laid out below.

Link to Table

Share distribution for KOSDAQ Market. A domestic or foreign listing applicant for KOSDAQ Market must comply with at least one of the following:

Link to Table

Corporate governance. The KOSPI Market Listing Regulations and the KOSDAQ Market Listing Regulations ("Listing Regulations") have various chapters regarding corporate governance issues. These cover notifiable matters, board composition and committee structure and review by auditors. See section 5 below for further information for foreign and domestic companies.

Listing sponsor. Each listing applicant must appoint a listing sponsor to assist with its listing application. A listing sponsor must be a financial investment company that has obtained authorization for its investment trading business as well as its investment brokerage business targeting securities. In cases where an applicant for listing is the company intending to conduct primary listing of foreign shares, etc. on KOSPI Market, a listing sponsor must comply with each of the following:

• As of the date of listing application, it must have in its possession foreign shares, etc., which were purchased at the public offering price or through secondary distribution, in a quantity equivalent to 5% (where the purchase amount is higher than KRW 5 billion (approximately US$3.85 million) of the number of shares publicly offered or sold in Korea after the applicant for listing has submitted its application for preliminary listing review.
• It must not sell the shares acquired pursuant to the above within six months from the date of listing. At the time of applying for preliminary listing review, it must submit to the KRX a confirmation letter stating that it will comply with this sales restriction.
• It must function as a disclosure agent for a period of two years after listing (though this will not apply where an applicant for primary listing has established an office in Korea and a person responsible for disclosure, who is capable of communicating in Korean, works fulltime in the office).
• It must prepare a corporate analytical report on the listing applicant, submit the report to the KRX and post the report on its internet homepage (where it must remain for a period of two years after listing).

If three years have elapsed since the applicant for primary listing listed its shares on an overseas securities market, the above a) and b) will not apply.

Where an applicant for listing is the company intending to conduct primary listing of foreign shares, etc. on the KOSDAQ Market, the listing sponsor should function as a disclosure agent for a period of two years after listing. This does not apply where an applicant for primary listing has established an office in Korea and a person responsible for disclosure, who can communicate in Korean, works fulltime in the office.

Listing agent. A listing applicant who intends to primarily list foreign shares, etc. on both the KOSPI and the KOSDAQ Market must appoint a listing agent, who has an address or residence in Korea, to act as an agent for all the activities pursuant to the KOSDAQ Market Listing Regulations between the applicant and the KRX. 

Interviews. The KRX may conduct multiple interviews with a domestic or foreign applicant and a listing sponsor, one interview with the representative director, and, if necessary, one on-site visit or site tour.

Minimum price. The KOSPI and KOSDAQ do not impose any requirement for domestic or foreign listed companies to have or to maintain a minimum trading price for their securities.

Currency. With respect to equity securities listed on the KOSPI Market and the KOSDAQ Market, the securities must be traded and settled in Korean Won.

Clearing and settlement. Domestic or foreign securities to be listed on KOSPI Market or KOSDAQ Market are required to be registered with the electronic registration ledger of Korea Securities Depository (“KSD”) operated by the KRX. The KSD is a securities settlement system used within the KOSPI Market system and the KOSDAQ Market system. Also, the listing applicant must enter into a transfer agency service contract with a transfer agent who specializes in share affairs.

Compliance guidelines and compliance officer. A domestic or foreign listed company with total assets valued at KRW 500 billion (approximately US$385 million) or more as at the end of the latest business year should establish guidelines and procedures that its employees and directors must observe in order to abide by relevant statutes when they perform their duties. Moreover, the company should appoint one or more compliance officers responsible for duties related to abiding by the compliance guidelines. The compliance officer should be a person qualified as an attorney at law, a person who is or was an assistant professor or higher teaching of law at a school, a person who has worked for a listed company as an auditor, audit committee member, or compliance officer, or in the legal department for an aggregate of at least 10 years, or a person who holds at least a master’s degree in law and has worked for a listed company as an auditor, audit committee member, or compliance officer, or in the legal department for an aggregate of at least 10 years.

Audit opinion. For domestic or foreign listing applicants for the KOSPI Market, the auditor’s opinions on the individual and consolidated financial statements of the latest three business years should be unqualified for the latest business year and may be unqualified or qualified (excluding any qualified opinion due to scope limitation) for the most recent two prior years. For domestic or foreign listing applicants for the KOSDAQ Market, the auditor’s opinions on the financial statements of the latest business year should be unqualified. 

Accounting standards. The audited financial statements should be prepared in accordance with K-IFRS, while the financial statements attached to the listing application for a foreign company on both the KOSPI Market and the KOSDAQ Market should be prepared in accordance with K-IFRS, International Accounting Standards or US GAAP.

Additional qualitative requirements. In addition to the criteria described above, the following requirements are considered in the qualitative review for a listing applicant seeking a primary or secondary listing on the KOSPI Market (with respect to a foreign applicant, the qualitative review will be conducted taking into consideration the laws and regulations, the language used, the time difference and the geographical conditions of the country where the primary listing was made):

• Corporate sustainability in respect of the business, financial conditions and environments surrounding business management:
  • If there is business stability, independence of business activities and customer base and growth of sales, business sustainability will be recognized.
  • If there is a clear financial structure and contingent liabilities, financial stability will be recognized.
  • In the case of a listing applicant against which a lawsuit or legal dispute has been filed regarding such matters as patent, management right, etc., it will be recognized that such facts will not have any significant impact on the corporate management.
  • The rationale of the listing sponsor’s method of calculating estimated market capitalization, which is based on the business status, industry outlook, stock market situations and the relative evaluation against a target company for comparison, etc. will be acknowledged.
• The transparency of business management will be looked at in terms of the corporate governance structure, internal control system, disclosure system and related party transactions:
  • If there is independence of business management, composition of management and independence of auditors, corporate governance will be recognized as well operated.
  • Internal control system complies with laws and regulations related to internal control.
  • If there is transparency within the accounting management and capacity to make adequate disclosures, the disclosure system will be recognized as well operated.
  • In relation to trading with related parties, trades and disclosure are adequate.
  • The listing applicant should be establishing (or planning to establish) or operating an ESG management system, including environmental protection, social responsibility, and corporate governance, for the sustainable growth of the company and society.
• The stability of business management will be judged in terms of the relationship between the stakeholders, the details and period of changes in share ownership structure, etc.
• In terms of legal nature and operating mechanisms, it will be recognized as a joint stock corporation incorporated pursuant to the Korean Commercial Code ("KCC").
• In addition, it will be judged on whether it undermines public interests and the protection of investors.

Notwithstanding the above, the qualitative review requirements may be waived, and, with respect the business performance requirements, only the requirements pertaining to the sales amount and profitability will apply (only section A above, as opposed to A through D) where a foreign listing applicant satisfies all the following:

• At least five years has elapsed since its listing on a recognized overseas securities market.
• The base market capitalization of the foreign shares, etc. that have been listed on a recognized overseas securities market as at the application date for preliminary listing review amounts to least KRW 2 trillion (approximately US$1.54 billion).
• The business performance must satisfy all the following:
  • Sales: At least KRW 2 trillion (approximately US$1.54 billion) for the latest business year and at least KRW 1 trillion (approximately US$0.77 billion) on average for the most recent three business years.
  • Profitability: The income before tax from continuing operations must be at least KRW 300 billion (approximately US$231 million) for the latest business year, and the sum of income before tax from continuing operations for the latest three business years must be at least KRW 700 billion (approximately US$539 million).
• No incidents of disciplinary actions, etc. taken from an overseas stock market on which the shares are listed, the regulator or the exchange of the home country will have occurred for the latest three

Meanwhile, in addition to the criteria described above, a listing applicant for the KOSDAQ Market seeking a primary or secondary listing must:

• Demonstrate its ability to survive as a going concern, considering such matters as business, financial condition, technological prowess and growth potential, and operating environment.
• Demonstrate management transparency and management stability, considering such matters as the corporate governance, internal control system, disclosure system, related party transactions, and share transactions prior to listing.
• Show that the listing of the relevant shares does not undermine investor protection and the sound growth of the KOSDAQ Market.

Continuing listing criteria.

Regarding a KOSPI-listed company, the KRX will designate the common share capital of the company as an administrative issue, if the company falls under any of the following:

• Sub-standard share distribution: (i) Where the number of general shareholders is less than 200; or (ii) where the total number of the shares held by general shareholders is less than 5% of the floating share capital, provided that this will not apply to the following cases:
  • Where the total number of shares held by general shareholders is two million or more.
  • Where the requirement for public offerings made simultaneously in Korea and overseas was applied at the time of primary listing and the total number of shares owned by general shareholders is 700,000 or more.

  With respect to the designation of foreign shares, etc., the number of general shareholders, number of shares held by general shareholders and number of floating shares will be calculated based on the number of shares deposited in Korea and the register of holders; This requirement will not apply to a company that has listed foreign shares, etc. on an overseas securities market.

• Impairment of capital shares: Where at least 50% of the capital shares have been impaired as of the end of the latest business year. Provided that, in the case of a company that owns a subsidiary, the requirement will apply based on the capital shares and total capital (excluding non-controlling interests) as shown in the consolidated financial statements (with respect to the designation of foreign shares, etc., it will apply based on the consolidated financial statement. Provided further, in respect of a foreign shares, etc. issued by companies without a subsidiary, it will apply based on the individual financial statement, prepared in accordance with the K-IFRS. Where it is impossible to judge whether a foreign company that has issued no par value shares is in the status of capital impairment based on equity capital, the criterion concerned will not apply).
• Sub-standard trading volume: Where the average monthly trading volume based on common shares for a semi-annual period is less than 1% of the floating shares as of the end of the relevant semi-annual period. Provided that this provision will not apply to cases falling under any of the following (with respect to the designation of foreign shares, etc., the number of general shareholders, the number of shares held by general shareholders and the number of floating shares will be determined based on the number of shares deposited in Korea and the register of beneficial holders prepared by the KSD):
  • Where the average monthly trading volume is 20,000 shares or more.
  • Where the total number of shares held by general investors is 20% or more of the floating shares, and the number of relevant general shareholders is 300 or more.
  • In the case of a primary listed company, it will be limited to the semi-annual period which includes the date of primary listing.
  • Where the shares were suspended from trading for 50% or more of the total number of trading days during the relevant semi-annual period.
  • Where the agreement for liquidity provision (limited only to an agreement of which period is at least six months) has been entered into as of the end of the relevant semi-annual period.
• Sub-standard sales: Where the sales amount to less than KRW 5 billion (approximately US$3.85 million). In such cases, for a holding company, this figure will be based on the sales amount stated in the consolidated financial statement (with respect to the designation of foreign shares, etc., it will apply based on the consolidated financial statement. Provided that, in respect of a foreign company with listed shares, etc. that is not a foreign holding company, it has prepared financial statements in accordance with the K-IFRS and the figure will be based on the individual financial statement).
• Sub-standard market capitalization (with respect to the designation of foreign shares, etc., in the case of a company that has listed DRs representing foreign shares, the market capitalization will be determined on the basis of the number of listed DRs representing foreign shares; this requirement will not apply to a company that has listed foreign shares, etc. on an overseas securities market): Where the market capitalization of a company that has listed its common shares is less than KRW 5 billion (approximately US$3.85 million) for 30 days.
• Where foreign company listed shares, etc. fall under any of the following:
  • The foreign company has changed its accounting standards away from the standards adopted at the time of submission of the application for preliminary listing review.
  • It was confirmed that the auditor was appointed, substituted, or dismissed in breach of the regulation of auditor qualifications.

The KRX will delist the common shares of a company, if the company falls under any of the following:

• Sub-standard share distribution: (i) Where the number of general shareholders as at the end of the latest fiscal business year is less than 200, while also being designated as an administrative issue due to the lack of general shareholders; or (ii) where the total number of the shares held by general shareholders is less than 5% of the floating shares, while also being designated as an administrative issue due to the lack of share capital owned by general shareholders (with respect to the delisting of foreign shares, etc., the number of general shareholders, the number of shares held by general shareholders and the number of floating shares will be calculated based on the number of shares deposited in Korea and the register of holders).
• Impairment of capital shares: Where the entire amount of capital shares as at the end of the latest business year has been impaired. In such cases, for a company owning a subsidiary, the criterion concerned will apply on the basis of the capital shares and total equity (excluding non-controlling interests) on the consolidated financial statements (with respect to the delisting of foreign shares, etc., it will be based on the application methods noted in each of the following: (a) based on the consolidated financial statement, except where a foreign company with listed shares, etc. does not own a subsidiary, in which case it will be based on the individual financial statement, prepared in accordance with the K-IFRS; and (b) where it is impossible to judge whether a foreign company that has issued no par value shares is in the status of capital impairment on the basis of equity capital, the criterion concerned will not apply).
• Sub-standard trading volume (with respect to the delisting of foreign shares, etc., the number of general shareholders, the number of shares held by general shareholders and the number of floating shares will be calculated based on the number of shares deposited in Korea and the register of holders): Where the average monthly trading volume of common shares is less than 1% of the floating shares as of the end of a semi-annual period following the semi-annual period when the common shares concerned were designated as an administrative issue due to the lack of trading volume.
• Sub-standard market capitalization (with respect to the delisting of foreign shares, etc., where a company that has listed DRs representing foreign shares, the market capitalization will be determined on the basis of the number of listed DRs representing foreign shares): Where the market capitalization of a company that has listed its common shares does not satisfy any of the following for 90 days after being designated as an administrative issue due to the lack of market capitalization:
  • The market capitalization must be minimum KRW 5 billion (approximately US$3.85 million) for at least 10 consecutive days; and
  • The number of days with the market capitalization of at least KRW five billion (approximately US$3.85 million) must equal or exceed 30 days.
• In relation to foreign companies with listed shares, etc., if any of the following apply:
  • Having been designated as an administrative issue due to the breach of the restriction on the change of accounting standards, the accounting standards have not been changed back by the statutory deadline for submission of the annual report or the half-yearly report, which is the initial deadline that comes after the date of designation as an administrative issue.
  • Having been designated as an administrative issue, it has failed to resolve the relevant grounds for designation as an administrative issue by the first statutory deadline for submission of the annual report or the half-yearly report after the date of designation as administrative issue.
  • Where the number of listed DRs representing foreign shares is less than 100,000.
  • Where a foreign company with listed shares, etc. has listed foreign shares, etc. on an overseas securities market, which provides grounds for delisting those shares from the relevant overseas securities market.

As regards a KOSDAQ-listed company, the KRX will designate the common shares of the company as an administrative issue, if the company suffers any of the following:

• Sub-standard share distribution: (i) Where the number of general shareholders is less than 200; or (ii) where the total number of the shares held by general shareholders is less than 20% of the floating shares, provided that this will not apply in the following instances:
  • Where the number of minority shares is 300 or more, and the number of shares held by the minority shareholders is at least one million and 10% or higher of the number of floating shares; and
  • Where the relevant shares are listed on a foreign securities market.

  With respect to the designation of foreign shares, etc., where DRs representing foreign shares have been listed, it will be calculated based on the number of listed DRs representing foreign shares; the number of minority shareholders, the number of shares held by minority shareholders and the number of floating shares will be calculated based on the number of shares deposited in Korea; and in case of a foreign company listed on the KOSDAQ Market, which is listed on a foreign securities market, the requirement regarding the number of shares held by minority shareholders will not apply.

• Sub-standard sales (does not apply to foreign shares, etc.): Where sales in the latest business year were less than KRW 3 billion (approximately US$2.31 million).
• Incurrence of loss before tax from continuing operations (does not apply to foreign shares, etc.): Where there has been a loss from continuing operations before tax of at least KRW 1 billion (approximately US$0.77 million), which exceeds 50% of equity capital as at the end of the relevant business year for two out of the three latest business years, respectively, and there is a loss before tax from continuing operations for the latest business year.
• Impairment of capital shares (with respect to the designation of foreign shares, etc., this will not apply where the company has issued no par value shares): Where at least 50% of the capital shares have been impaired as at the end of the latest business year.
• Sub-standard market capitalization (with respect to the designation of foreign shares, etc., where DRs representing foreign shares have been listed, it will be calculated based on the number of listed DRs representing foreign shares): Where the market capitalization of common shares of a common-shares-listed company falls below KRW 4 billion (approximately US$3.08 million) and such situation continues for 30 consecutive business days.
• Sub-standard equity (does not apply to foreign shares, etc.): Where the equity falls below KRW 1 billion (approximately US$0.77 million) of the equity as at the end of the latest business year.
• Sub-standard trading volume (with respect to the designation of foreign shares, etc., where DRs representing foreign shares have been listed, it will be calculated based on the number of listed DRs representing foreign shares; the number of minority shareholders, the number of shares held by minority shareholders and the number of floating shares will be calculated based on the number of shares deposited in Korea): Where, in terms of the trading volume on the KOSDAQ Market, the average monthly trading volume of common shares in a quarter is less than 1% of the number of floating shares.
• In relation to foreign companies with listed shares, etc., if any of the following apply:
  • Where it is confirmed through the annual report or semi-annual report that the accounting standards have been changed to another type of standards other than the standards adopted at the time of submitting the application for preliminary listing review.
  • Where it is confirmed through the annual report or semi-annual report that an auditor has been appointed in violation of the regulation of auditor qualifications.

The KRX will delist the common shares of a company, if the company suffers any of the following:

• Sub-standard share distribution (does not apply to foreign shares, etc.): Where the company that has been designated as having an administrative issue due to below standard share distribution fails to resolve the shortfall in its share distribution within one year.
• Impairment of capital shares (does not apply to foreign shares, etc.): Where the total capital shares have been impaired as at the end of the latest business year.
• Sub-standard trading volume (does not apply to foreign shares, etc.): Where, while being designated as an administrative issue due to below standard trading volumes, the shortfall in trading volume pursuant to the relevant regulation continues into the following quarter.
• Sub-standard market capitalization (with respect to the delisting of foreign shares, etc., where DRs representing foreign shares have been listed, it will be calculated based on the number of listed DRs representing foreign shares): Where, having been designated as an administrative issue, the market capitalization of the concerned common shares has failed to meet at least one of the following requirements during the next 90 business days:
  • The market capitalization should be minimum KRW 4 billion (approximately US$3.08 million) for at least 10 consecutive days.
  • The market capitalization should be minimum KRW 4 billion (approximately US$3.08 million) for at least 30 days during the period.