In the course of advising a Japanese company on certain environmental permit/license issues and reviewing related data, Lee & Ko’s Japan Team learned that the company planned to use dividend amounts distributable to the parent company in Japan to carry out a capital increase for the Korean subsidiary and that the company’s advanced manufacturing technology relating to additives for PCB plating was the first of its kind to be introduced in Korea. Based on this information, Lee & Ko realized that the client was eligible to apply for a significant tax reduction in the form of tax incentives available for foreign direct investments made in connection with advanced technology, and advised the client accordingly. Pursuant thereto, Lee & Ko was able to obtain a decision in favor of the client for an overall tax reduction that included 100% tax exempt status for 5 years and 50% tax exempt status for 2 years after the initial 5 year period (which exemption applies to withholding taxes on dividends of foreign investors), an exemption from the acquisition tax otherwise payable on the acquisition of the factory building, exemption from registration tax, etc. The net economic benefit reaped by the client as a result of Lee & Ko’s advice on such tax issues has amounted to several million dollars. The transaction was unique in that the dividends available for distribution to the parent company, when used to increase the capital of the Korean subsidiary, were recognized as a form of direct foreign investment, unlike in previous transactions where only funds directly transferred from overseas have been used and recognized as direct foreign investment amounts.