South Korean Business Environment

 

Korea is the 5th easiest place in the world to do business, according to the World Bank's annual Doing Business 2015 report. Over the past ten years, the government has eased regulations and made improvements at all levels, and the country has gone from being the 30th easiest economy for business in 2007 to the 5th easiest today.

With a focus on deregulation, attracting global headquarters and R&D centers, enhancing tax and financial incentives and improving the living environment, all levels of government are working together to make Korea an attractive investment destination.

Tax Support: For foreign investments that meet a set of qualifications, corporate and income tax on business income, dividend income, payment for technology introduction, earned income, etc. and customs duties on capital goods are exempt or reduced in accordance with the Restriction of Special Taxation Act. Acquisition tax, registration tax and property tax on properties acquired or held for the operation of business are exempt or reduced under local government ordinances mandated by the Restriction of Special Taxation Act.

Cash Grant: In cases where a foreign investment satisfies certain conditions, the central and local governments of Korea may provide cash grants for projects such as the construction of a new factory, etc. In the process, the Korean government takes into account whether the relevant foreign investment accompanies high technology, the effect of technology transfer, the size of job creation, whether the foreign investment overlaps with domestic investment, the propriety of the location in which the foreign investment is made, etc.

Site Support: Korea provides a variety of support for foreign investments in industrial complexes, which are designated and developed strategically for industrial development. In addition, foreign investment zones, free trade zones, and free economic zones in Korea offer investment environments favorable to foreign investors.

Other support: The Korean Government designates and operates a project manager system for the provision of efficient support for investment from foreign investors or foreign-invested companies. Each foreign investor or foreign-invested company may have its own project manager through the support of the Korea Trade-Investment Promotion Agency (KOTRA).

The government values the opinions of foreign-invested companies when making policy decisions that affect their interests. Foreign investors can attend regular meetings of the Regulatory Reform Committee throughout the year. Major foreign investors are also invited to regular policy briefings and meetings, together with the standing committees of the National Assembly and related government agencies.