Korea License Holder (KLH) for Medical Devices — Who Holds Your MFDS Licence, and the ICC Structure

Key takeaway — In Korea, the item licence, certification, or notification for an imported medical device is issued in the name of an importer that holds an import business licence (Medical Devices Act, Article 15). Because the importer must have quality-inspection facilities and a qualified quality manager in Korea, a manufacturer without a Korean entity first needs a company to take that role. Overseas it is called the Korea License Holder (KLH), but the term does not exist in the statute. Three structures follow from who holds the licence: if the distributor is also the importer, the licence stays with the distributor when the agreement ends; a subsidiary gives full control at the cost of staff and facilities; an independent licence holder (In-Country Caretaker, ICC) separates the licence from the sales agreement. Whichever you choose, the licence holder, data ownership, and what happens at termination belong in the contract before the registration starts.

Why Korea needs a company to hold the licence

An FDA listing or a CE certificate belongs to the manufacturer. Korea's import licence does not work that way. To import and sell a medical device, a company must first obtain an import business licence (Medical Devices Act, Article 15(1)), and it is that importer which then obtains the item-level import licence or certification, or files the import notification, for each product (Article 15(2)). At least one item must be filed together with the import business licence application (Article 15(3)), and the applicant must have the facilities needed for quality inspection and a quality management system in place beforehand (Article 15(4)).

Then comes the staffing requirement. The quality manager provision for manufacturers (Article 6(7)) applies to importers as well (Article 15(6)): each importer must appoint at least one quality manager (Enforcement Rule, Article 11(1), applied to importers through Article 34). The quality manager must meet prescribed qualifications, and the scope of the role is fixed by the Rule (Article 12). Who qualifies is covered in our quality manager guide.

In short, an import licence for Korea exists only in the name of an importer with facilities and a quality manager in Korea. A manufacturer cannot easily meet those requirements without a Korean entity, so the first decision in any Korean market-entry plan is who will hold the licence. Overseas, that company is called the KLH. Unlike an EU authorised representative or a US agent, which act as points of contact on the manufacturer's behalf, the Korean importer is the named holder of the licence and the party legally responsible for it.

Who ends up owning the licence — three structures

Depending on who holds the licence, there are three routes. None is right in the abstract; what differs is where the licence sits when the relationship changes.

	Distributor as importer	Korean subsidiary or branch	Independent licence holder (ICC)
Licence in the name of	Distributor	Manufacturer's Korean entity	Licence holder
Facilities and quality manager	Provided by the distributor	Provided by the manufacturer	Provided by the licence holder
Sales agreement and licence	Tied together in one contract	Separate	Separate
Licence at termination	Stays with the distributor	Stays with the manufacturer	Stays with the licence holder, regardless of which distributor is replaced
Manufacturer's control	Low	High	Set by contract
Manufacturer's cost and staff	Low	Company formation, payroll, facilities	Licence holder's operating fee
Fits when	The partner is settled and the relationship is long-term	Korean sales cover the cost of running an entity	You do not want to lock in a partner before you know the market

The first structure is the most common for a simple reason: a Korean company that wants to sell the product turns up first and offers to obtain the import business licence as well. The problem appears later.

What happens when the distributor holds the licence

The importer's status for an item licence passes to another importer when the business for that item is transferred (Article 47(3)). Put the other way round, the end of a distribution agreement does not by itself move the licence to the next partner. The outgoing distributor has to cooperate with a business transfer; if it does not, the new partner starts again with the import business licence, the item licence, and KGMP. Depending on the class that takes months to more than a year, and the product is off the market in the meantime.

When a manufacturer hesitates to change distributors, the reason is usually not the partner's ability but this structure. Sales may be weak, the manufacturer may want the exclusivity back, and the decision is still deferred because the licence would go with it. We covered the same problem from the Korean seller's side in three routes when the import licence blocks a seller.

The risk can be reduced by contract without changing the structure: a duty to cooperate with a business transfer at termination, ownership of the registration data, minimum-quantity conditions, and termination rights. But a duty to cooperate takes time to enforce, and if the distributor has closed down or is in a dispute with you, the clause exists and the transfer still stalls.

What the ICC (In-Country Caretaker) structure is

Under an ICC structure, a company that does not sell the product becomes the importer and holds the licence, nothing more. The licence holder obtains the import business licence and the item licence in its own name and performs the importer's statutory duties itself — the quality manager function, storage and distribution control, adverse event reporting, recall response. Distribution partners take the product from the licence holder and sell it; all they need is a sales business notification (Article 17). The division of labour works because a Korean sales business notification carries no quality manager requirement.

	Overseas manufacturer	Licence holder (ICC)	Distribution partner
Responsibilities	Production and supply, technical file and test data, quality maintenance	Import business licence, item licence, KGMP, quality manager, storage and distribution, post-market duties	Sales, distribution, market feedback
Licences needed	None (no Korean entity)	Import business licence + item licence, certification, or notification	Sales business notification
Contracts	Supply and regulatory agreement with the licence holder	Agreements with both the manufacturer and the distribution partners	Distribution agreement with the licence holder; exclusivity terms with the manufacturer

This structure changes three things. First, registration and partner search run in parallel rather than in sequence — while the registration is in progress, you can compare the sales capability of several candidates. Second, exclusivity remains a commercial term. You can still grant it, with minimum quantities and termination conditions; what changes is that the licence no longer disappears when the agreement does. Third, several distribution partners can share one licence.

One thing needs to be said plainly: this is not a nominee arrangement. The importer's facilities, quality manager, and compliance duties must be performed by the company that holds the licence (Article 15(4) and (6)), and operating differently from what was licensed is grounds for revocation or suspension of business (Article 36). A licence holder that does not actually do the work is the biggest risk in this structure, so when you evaluate an ICC, start by asking who its quality manager is and how it handles post-market duties. How we run this structure is described on our licence & import structure service page.

What belongs in the contract — clause checklist

Whichever structure you choose, if the following items are missing from the contract, the licence will hold you back later.

• Named licence holder — in whose name the import business licence and the item licence are obtained. The importer's name and address on the label follow the same name (labeling guide, Article 20, subparagraph 1)
• Ownership and reuse rights over registration data — who keeps the originals of the technical file, test reports, and clinical data, and whether they can be reused when the licence holder changes
• Licence at termination — whether the outgoing holder must cooperate with a business transfer (Article 47(3)), within what period, and at whose cost
• Scope and conditions of exclusivity — territory, channel, term, minimum purchase quantities, and the right to terminate for shortfall. Keep the exclusivity clause and the licence clause in separate sentences
• Allocation of post-market duties — adverse event reporting, recalls, and renewals are the importer's statutory duties, so state who pays and who acts. The full list is in what starts after approval
• Handling changes — a change of manufacturing site, model, or raw material requires a change approval (change approval guide), so fix when the manufacturer must notify
• Cost structure — separate the set-up cost from the running cost. Items with an open-ended basis such as “x% of the import price” make the total impossible to forecast

Which structure fits — the order of questions

1. Will Korean sales cover the cost of running an entity? If so, a subsidiary gives the most control. If not, go to the next question
2. Is the distribution partner already settled, does it already have an import business licence and a quality manager of its own, and is the relationship long-term? If so, the distributor structure with a termination clause may be enough
3. Is the partner still undecided, do you want several channels, or do you want to keep the option of replacing the partner? That is where the ICC structure fits

For products whose import structure itself carries high risk — devices subject to tracking, cold-chain products, new products with a meaningful recall probability — the licence holder's operating burden grows, and in some of those cases we recommend direct registration in the client's own name. Before you settle on a structure, send us the product, the manufacturing site, and the Korean sales plan, and we reply within one business day on which structures are workable.

Common mistakes

• The distribution agreement has no licence clause — if it ends at “the distributor is responsible for import and sales”, the fate of the licence at termination has not been decided
• Treating the KLH as an agent — the Korean importer is not a point of contact; it is the named holder of the licence and the legally responsible party
• Assuming overseas approvals substitute for the Korean one — FDA, CE, or MDSAP evidence does not replace the Korean licence, and the extent to which foreign test reports are accepted has to be checked separately (foreign test reports guide)
• Leaving data ownership undefined — the reason tests get repeated when the licence holder changes
• Not checking the licence holder's actual operating capacity — signing without asking who the quality manager is, or whether a warehouse and a post-market system exist

Before you start

• You have a scale assumption for Korea (three-year sales, number of channels) and used it to decide on a subsidiary
• The licence holder is decided and you have confirmed its facilities and quality manager
• Ownership and reuse rights over the technical file and test reports are in the contract
• The duty to cooperate with a business transfer at termination, its deadline, and its cost are in the contract
• The exclusivity clause and the licence clause are separate
• The party performing and the party paying for post-market duties (adverse event reporting, recalls, renewals) are fixed
• You have checked the procedure and timeline for your class — procedure overview · timelines and costs

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The licence structure is a contract that keeps working for as long as the product is on the market. Send us your product data, manufacturer details, and Korean sales plan, and we will tell you within one business day which of the three structures is workable and what to put in the contract first — through a free pre-review.

Legal basis: Medical Devices Act of Korea (Act No. 21949, in force 15 Sep 2026) — Article 6 (Licence for Manufacturing Business, etc.), paragraph 7 · Article 6-2 (Duties of Quality Managers, etc.) · Article 15 (Licence for Import Business, etc.) · Article 17 (Notification of Sales Business, etc.) · Article 36 (Revocation of Licences and Suspension of Business, etc.) · Article 47 (Succession to the Status of Manufacturers, etc.), paragraph 3; Enforcement Rule of the Medical Devices Act (Ordinance of the Prime Minister No. 2127, in force 1 Jul 2026) — Article 11 (Qualifications of Quality Managers, etc.) · Article 12 (Scope of Duties of Quality Managers, etc.) · Article 34 (Application Mutatis Mutandis). Texts confirmed on 22 Sep 2026 in the National Law Information Center. “KLH” and “ICC” are industry terms, not statutory ones; the content may change as the legislation is amended.