Law firm Cheongchul's Lee Young-kyung, attorney, conducted an interview with ‘Eto News’ regarding ‘MSO related precautions’.

Generally, ‘MSO (Management Service Organization)’ refers to a hospital management support company and has recently gained popularity in order to reduce income tax and gift tax, and take advantage of corporate business benefits. It is also established for the efficient operation of network hospitals.

Establishing an MSO has legally sensitive factors such as tax reduction, inheritance, and investment attraction, so care must be taken to ensure compliance with relevant laws during the establishment process.

The Medical Law prohibits non-medical personnel from opening medical institutions, and the involvement of profit capital is fundamentally blocked. Therefore, it is necessary to have prior expert review to avoid issues related to violations of the Medical Law in the establishment and operation of an MSO, and it is advisable to also obtain review regarding general management issues that may arise during the operation of the MSO.

Lee Young-kyung, attorney at Law firm Cheongchul stated, “Care must be taken not to violate relevant laws including the Medical Law during the process of establishing and operating an MSO,” and emphasized, “It is important to receive expert assistance to ensure that there are no violations of actual laws while utilizing the tax benefits and business advantages allowed by law for MSOs. There are often cases where transactions between hospitals and MSOs are not recognized for tax purposes, so it is necessary to obtain comprehensive consulting from experienced attorneys and tax professionals in these matters.”

For more details, you can check the full interview published.

Hospital MSO establishment and operation should be conducted with expert advice