Republic of Korea Country Profile

Recommendations:

Korea is a wealthy, highly developed country with one of the world’s best high tech manufacturing sectors, a large base of middle class consumers, and strong trade relations with the US. It can be a hard place for foreign companies to make initial inroads, but is usually worth the effort. ** Good choice for most businesses**

(+) Politically stable with world class logistics and ICT
(+) Highly educated, skilled, and productive workforce
(+) Local Korean companies compete globally
(+) Free Trade Agreement with US minimizes taxes and provides equal footing to American companies

(-) Dominated by large firms (chaebols); foreign companies can have difficulty competing
(-) Tensions with DPRK increase credit and jurisdiction risks, and can cause negative economic impacts
(-) Complicated regulatory framework

Highlights:

– Ranked #5 globally on Ease of Doing Business rankings and 80% on Human Capital Index
– Highly productive workforce, but high cost of living, property rent, and labor costs
– Strong trade relations with the US, established Free Trade Agreement, and supportive government
– Some of the world’s best infrastructure

"Given its robust shipping and air cargo infrastructure, Korea serves not only as a market destination for U.S. goods and services, but also as a hub for expansion into other markets.”

U.S. International Trade Administration, 2021

Country Facts:

Population:

51.3 million; 0.05% growth in 2021

GDP:

$1.8 trillion USD; 4% growth in 2021

GNI per capita:

E-Commerce:

$35K USD; 9% growth in 2021; 2.5% Inflation, high-income country

$19 billion USD in 2020; sixth largest market in world

Industries:

Manufacturing (semiconductors, electronics, ships, cars, chemicals), telecommunications, steel, chemicals, tourism

Tourism:

#28 most visited country in the world prior to pandemic

Investment:

Government actively encourages foreign investment through the Korea Trade-Investment Promotion Agency (KOTRA)

#5/190

#33/180

80%

37.1 M

$34.9K USD

#32/100

58% NYC Prices

Ease of Doing Business

Corruption Perceptions Index

Human Capital Index

Working Age Population

Household Expenditure Per Capita

English Language Capabilities

Cost of Living Plus Rent Index

Marketing:

Per capita expenditure:

$13.7K USD

Internet penetration:

96%

Shop online:

80%

Mobile ownership:

118%

Primary messaging:

Kakaotalk

Primary website:

Facebook

Average Labor:

Infrastructure:

Opening a Business:

Relevant Laws:

Enforcement Decree of the Foreign Investment Promotion Act (1999), Foreign Investment Promotion Act (1998)

Time to Incorporate:

Approximately 8 days to incorporate

Fees to Incorporate:

Approximately $400 USD, not including accounting fees. High paid-in capital requirements

Paid-in Capital:

KRW 100 million ($90k USD) paid-in capital usually required; can be avoided by opening branch instead of incorporating

Remittance Taxes:

Recently updated FTA and tax treaty with the US protects US firms and minimizes taxes

Restrictions:

100% foreign ownership allowed; restrictions on foreign ownership in defense, power generation, broadcasting, telecommunications, air & water transport, and meat sales

Trends:

Government easing regulatory burden via new Office of the Foreign Investment Ombudsman

BBA Services:

BBA has a small local office in Seoul. BBA can assist SMEs make sales in most sectors, research market opportunities, and find trusted local partners.