AI Regulation Tracker / Regulation in force

South Korea makes large foreign AI firms name a Korea-based agent or face a fine

Under South Korea's AI Basic Act, in force since January 22, 2026, a foreign AI operator with no Korean address that crosses a revenue or user threshold must appoint a written domestic representative and notify the government. Skip it and the fine reaches 30 million won.

By Anthony Guerriero · Reviewed by The Leveraged Years Editorial Desk · Published July 7, 2026 · Last updated July 7, 2026

South Korea makes large foreign AI firms name a Korea-based agent or face a fine regulation briefing

The Leveraged Years AI Regulation Tracker

Regulatory Briefing

Bindingness: Binding Law
Scope: South Korea. Foreign AI operators (foundation-model providers, consumer AI apps, AI SaaS) that serve Korean users without a physical Korean presence.
What Changed: South Korea's AI Basic Act (Act No. 20676), in force since January 22, 2026, and its Enforcement Decree (Presidential Decree No. 36053) require a qualifying foreign AI operator with no Korean address to designate, in writing, a Korea-based domestic representative and notify the Ministry of Science and ICT. The representative submits large-scale-AI safety-measure results and handles high-impact-AI applicability matters.
Who This Affects: Foreign AI and SaaS companies with no Korean office that reach Korean users at scale, including US foundation-model API providers and consumer AI app makers.
Current Status: In Force
Effective Date: January 22, 2026
Primary Source: Presidential Decree No. 36053 (AI Basic Act Enforcement Decree), law.go.kr. https://www.law.go.kr/lsInfoP.do?lsiSeq=268543
Secondary Analysis: Cooley, "South Korea's AI Basic Act: Overview and Key Takeaways". https://www.cooley.com/news/insight/2026/2026-01-27-south-koreas-ai-basic-act-overview-and-key-takeaways
Workflow Impact: Compliance teams at large foreign AI firms must decide whether they cross a threshold, then stand up an in-country agent to receive government inquiries and file safety-measure results, a role that mirrors the EU representative many already maintain.
Operational Next Step: Run your prior-year revenue, AI-service revenue and daily Korean user counts against the three thresholds, and if you clear any one, start scoping who could serve as your written Korea-based representative.
Last Verified: July 7, 2026

South Korea has given large foreign artificial-intelligence companies a concrete new gatekeeping duty: put a person or entity on the ground in Korea, in writing, to answer for you. Under the AI Basic Act (Act No. 20676), which took effect on January 22, 2026, a foreign AI operator that has no address in Korea and crosses a size threshold must designate a Korea-based domestic representative and notify the Ministry of Science and ICT. It is a structural obligation aimed squarely at firms that reach millions of Korean users from servers and offices somewhere else.

Who has to appoint an agent

The duty is not triggered by simply having Korean users. It is triggered by scale. According to the law firm Cooley, which read the Act and its Enforcement Decree, a foreign operator with no Korean office must name a local agent if it meets any one of three tests: annual revenue above 1 trillion won (about 681 million US dollars), AI-service revenue above 10 billion won in the previous year, or more than 1 million average daily users in Korea over the three-month period ending the previous year. Any single line clears the bar. The threshold detail is reported to sit in the Enforcement Decree (Presidential Decree No. 36053); as researchers who reviewed the aggregated decree text note, it is set out at Enforcement Decree Article 29.

A firm that has never counted its Korean daily active users with this rule in mind should do so, because the user test can pull in a consumer AI product that earns little direct revenue in Korea but is widely used there. The three-month averaging window also means a single viral quarter can push a product over the line, so the measurement is not a one-time check but a figure worth tracking as usage grows.

What the representative actually does

The domestic representative is not a mailbox. Cooley describes the agent as "legally responsible for responding to government inquiries and safety reports." In practice that means the representative becomes the local point of contact who submits the results of safety measures required of large-scale AI systems and who handles high-impact-AI applicability questions, the process by which a firm confirms whether its system falls into Korea's regulated high-impact category. The designation must be made in writing, and the appointment must be notified to the Ministry of Science and ICT rather than simply recorded internally.

The penalty, and its limits

Failing to designate carries an administrative fine of up to 30 million won, roughly 21,000 US dollars. That figure is modest next to the revenue of any company large enough to trip the thresholds, so the practical pressure here is less about the fine itself and more about what the missing agent signals: a large foreign operator that has not registered a responsible local contact is visible to the regulator and out of step with the law from day one.

What the rule does not do is worth stating plainly. It does not require a foreign firm to incorporate a Korean subsidiary, and it does not by itself impose the substantive high-impact-AI obligations on every firm that appoints an agent. It creates the channel through which those obligations and government inquiries are handled. It also does not, on its own, resolve how aggressively the fine will be applied in the law's first year.

The cross-border read for US firms

For a US AI or SaaS company, this is a familiar shape. Korea's domestic-representative duty is the local analog to the representative that the EU's General Data Protection Regulation requires under its Article 27 for firms without an EU establishment. A US company that already maintains an EU representative should treat Korea as a second instance of the same pattern rather than a novel problem. The trigger is different and the filing goes to a different ministry, but the underlying logic, a locally accountable contact for a regulator that cannot reach you at home, is one many US compliance teams already operate.

The immediate task is arithmetic, not legal theory. Measure your Korean footprint against the three thresholds. If you clear any one of them, the written appointment and the notice to the Ministry of Science and ICT are the concrete steps that follow.

Frequently Asked Questions

What changed under South Korea's AI Basic Act for foreign AI companies?

Since January 22, 2026, a foreign AI operator with no Korean address that crosses a size threshold must designate a Korea-based domestic representative in writing and notify the Ministry of Science and ICT. The agent handles government inquiries, submits large-scale-AI safety-measure results, and deals with high-impact-AI applicability.

Who is affected by the domestic-representative requirement?

Foreign AI and SaaS firms with no physical presence in Korea that meet any one of three thresholds: prior-year total revenue of at least 1 trillion won, prior-year AI-service revenue of at least 10 billion won, or at least 1 million average daily Korean users over the trailing three months. This can include US foundation-model providers and consumer AI apps.

What is the penalty for not appointing a domestic representative?

An administrative fine of up to 30 million won, about 21,000 US dollars. The larger cost is regulatory visibility, since a large foreign operator with no registered local contact is plainly out of compliance.

How does this compare to rules US firms already follow?

It is Korea's counterpart to the EU representative required under GDPR Article 27 for companies without an EU establishment. A US firm that already keeps an EU representative can treat Korea as the same pattern with a different trigger and a filing to the Ministry of Science and ICT.