Korean entertainment agencies have been notoriously one-sided, controlling and shady, especially with idol singing groups. Agencies bill back all artist expenses to the artist, which at times leads to the artist owing the agency money when their contract ends. As a result, many artists have decided to start “one-person” agencies. The artist is the sole talent, and management is controlled by the artist manager or their family members. The aura of keeping more of the artist’s earnings and more control over projects and career direction is great.
When an artist is under a traditional agency, revenue is split between the agency and the artist. Typically, the agency calculates total revenue, deducts expenses related to the artist’s activities and distributes the remaining profit according to the agreed-upon ratio. And for top-tier artists, who have earned over 1 billion won in a year, personal income tax can reach as high as 45 percent, or 49.5 percent including local taxes — meaning nearly half of their earnings go to taxes. However, when a celebrity establishes an independent agency as a corporate entity, which is often the case, they can significantly reduce their tax burden, as the top corporate tax rate is 24 percent.
Korean entertainment scandals involving “single-person agencies” have recently shifted from typical mismanagement to major legal and financial controversies. High-profile celebrities face harsh scrutiny over tax evasion schemes, unregistered business operations, and embezzlement through these independent corporate setups or operating without proper registration.
The list of artists’s alleged legal issues is long:
Tax Audits: Kim Seon-ho , Cha Eun-woo, Lee Ha-nee and Yoo Yeon-seok;
Unregistered agency violations: Park-Na-rae, KIm Wan-sun, Lee Hi, Si-kyung, Gang Dong-won, Song Ga-in, and Ock Joo-hyun
Embezzlement: Korean actor Hwang Jung-eum was convicted of embezzling 4.34 billion won from her fully-owned, family-run one-person agency, Hunminjeongeum Entertainment. She withdrew company funds under the guise of advances, investing about 4.2 billion won into cryptocurrency. In 2025, she was sentenced to two years in prison, suspended for four years
The problem is that an artist may see their corporation as a mere extension of themselves, their own personal piggy bank since it is their “earned money.” But agencies are separate legal entities, required to follow laws in its charter and purpose. Despite all these scandal headlines, artist continue to open their own solo agencies even though established ones have more connections and capital to get their talent consistent work.