Any person, before opening the business of running a pawnshop, shall file an application with an application form to the local competent authority for establishment. However, none of the pawnshop branches are allowed to be established.
The application form prescribed in the preceding paragraph shall be specified with the following:
1. The name of the company or business.
2. The name of the pawnbroker.
3. The location of the business facility and the storeroom where pledged items are stored and its security equipment.
4. Aggregate limits of liability insurance and a summary of the insurance policy.
5. Registered capital.
The name prescribed in the subparagraph 1 of the preceding paragraph shall include the word “Pawnshop.”
The number of pawnshops approved to be established is based on the criterion that an additional pawnshop may be established each time when the local population increases by 30,000 people for the first year and 20,000 people from the second year in the municipality, county (city) after this Act is enforced. The pawnshops whose establishment has already been approved by the competent authority prior to the enforcement of this Act, however, will not be included in the calculation.
The application for establishment as prescribed in the paragraph 1 shall be reviewed and approved by the local competent authority before issuing an establishment permit.
The applicant who has been granted an establishment permit shall complete the establishment by a given deadline and report to the local competent authority for inspection. If the inspection is satisfactory, a license will be issued to the applicant, who shall complete company or business registration within six months after obtaining the license.
If the inspection is not satisfactory and the applicant fails to make an improvement and apply for re-inspection by a given deadline, the establishment permit shall be revoked by the local competent authority.
If the establishment, business registration or improvement for pawnshop as prescribed in the preceding two paragraphs cannot be completed by a given deadline on a justifiable ground, the applicant shall apply for an extension with specific excuses to the local competent authority, but the extension is limited to only one time.
If the pawnbroker fails to comply with paragraph 6 to complete registration within six months and apply for extension within six months or fails to complete registration after having applied for extension, the local competent authority shall revoke the license.
The operating procedures for application review, permit issuance review, inspection, approval, and revocation as prescribed in paragraph 1, paragraph 2, and paragraph 5 to 7 shall be regulated by the national competent authority.

Any person with one of the following conditions may not serve as the pawnbroker of a pawnshop. If they have already served as the pawnbroker, they shall be relieved of their positions and the competent authority shall notify the authorities governing businesses or companies to revoke registration of the pawnbroker.
1. A person who has ever violated the provisions of the Organized Crime Prevention Act and has been finally convicted.
2. A person who has ever violated the provisions of the Anti-Corruption Act and Money Laundering Control Act, or committed larceny, grab and snatch, robbery, kidnapping, offenses relating to stolen goods, fraud, breach of trust, embezzlement or usury and has been finally convicted, has not served the sentence yet, has not finished serving the sentence or has finished serving the sentence for less than five years.
3. A person who declared bankruptcy has not been reinstated yet.
4. A person whose checks are still dishonored.
5. A person used to be a pawnbroker and his/her license was revoked for violation of the Article 28 of this Act.

If the license is damaged or lost, an application shall be submitted to the local competent authority for renewal or reissuance within 15 days.
Prior to its dissolution, discontinued operation, or after its license is revoked, the pawnshop shall submit its license and establishment permit to the local competent authority to be cancelled.

The minimum registered capital required for a pawnshop shall be stipulated by the national competent authority.

A pawnshop shall have a fixed business facility and storeroom to store pledged items. The standards for establishing the abovementioned facilities shall be regulated by the national competent authority.
A pawnshop shall run its pawn business at the registered business facility and store pledged items at the registered storeroom.
In the event that the storeroom used to store pledged items as prescribed in the preceding paragraph needs to be added to meet the operational needs, the additional ones may be built with prior reporting to the local competent authority.
A pawnshop shall act as a good-will manager to keep the pawned items and not to repawn them.

Any pawnshop, after having started its business operation, planning to change the following information shall apply to the local competent authority for license change:
1. The name of the company or business.
2. The pawnbroker.
3. The location of the business facility, the storeroom where pledged items are stored, and security equipment.
4. Aggregate limits of liability insurance and a summary of insurance policy.
5. Registered capital.

When a pawnshop plans to discontinue its business for more than a month, it shall submit the discontinuation application to the local competent authority for review. The pawnshop shall follow similar procedures before resuming the business.
In the event that there are pledged items yet to be redeemed prior to the discontinuation of the business prescribed in the preceding paragraph, the pawnshop shall notify the pledgors five days prior to the discontinuation and shall not charge interest during the discontinuation period, and shall extend the date for as long as the discontinuation.

A pawnshop shall post the following information in a conspicuous area at its operation site:
1. License.
2. Name of the pawnbroker or the clerk.
3. Annual interest rate.
4. Interest rate formula.
5. Business hours.
The annual interest rate prescribed in subparagraph 3 of the preceding paragraph shall not exceed 30%.

A pawnshop shall purchase liability insurance from insurance companies approved by the Financial Supervisory Commission. The aggregate limits of insurance shall be determined jointly by the national competent authority and the Financial Supervisory Commission.
The liability insurance prescribed in the preceding paragraph shall be purchased prior to the commencement of the business operation and shall continuously remain effective.

When a pawnshop experiences force majeure disasters that result in damage or destruction to pledged items, it shall notify pledgors immediately, prepare a detailed list of the affected items and inform the local competent authority, the insurance company, and the local pawnshop association for a joint inspection. The remaining pledged items shall be sealed and handled according to an agreement reached by the affected parties.
If the pawnshop and the pledgor have had an agreement that the pledgor shall waive his/her right to claim damages when pledged items are destroyed, damaged, or stolen for reasons attributable to the relevant parties, the agreement shall be void.

A pawnshop shall prepare a pawn ticket that must specify the following information:
1. The name, quantity, and characteristics of the pledged items.
2. The amount of money advanced.
3. The interest rate and required cost.
4. Maturity date.
5. The name and the number of national ID, driver’s license, passport, or Alien Resident Certificate of the pledgor.
6. The license number and address of the pawnshop.
7. Procedures to be followed in case of losing this pawn thicket.
8. Contents of the liability insurance policy.
9. Other requirements imposed by other competent authorities.
The pawn ticket prescribed in the preceding paragraph shall have a duplicate. The original ticket shall be given to the pledgor while the duplicate one shall be kept for record. All tickets shall be numbered and used sequentially.