Doing Business with South Korea
|Language||The official language is Korean|
|Religion||Korean Atheists (40.0%), Christians 27.6% (Protestants 17%, Catholics 6%) Buddhists (16%), mu|
|State system||Democratic Republic, presidential system|
|Head of State||Yoon Seok-youl|
|Head of government||Han Duck-soo|
|Currency name||Korean Won (KRW)|
|Time shift||+7 hours (summer), +8 hours (winter)|
|Nominal GDP (billion USD)||1,798|
|Economic growth (%)||4|
South Korea is one of the most dynamic economies in the world. With a GDP of billion USD in 2021, the country ranks 10th among the world’s largest economies and 4th in Asia. Exports of goods and services from South Korea accounted for 36.5% of the country’s GDP.
Korea’s economy grew by 4.0% in 2021 after a modest 1.0% contraction in 2020, thanks to record exports and expanded government spending. In 2022, the Korean economy is expected to grow by 3.1%.
A slowdown in export growth, partly due to the effects of Russia’s invasion of Ukraine, will be mitigated by a recovery in domestic private consumption and business investment as mass vaccinations reduce the need for strict social and economic restrictions.
The South Korean won will weaken against the US dollar in 2022-23 due to tightening monetary policy in the US and heightened geopolitical tensions. However, its depreciation will be moderate compared to other emerging market currencies.
Private consumption will continue to be an important driver of the economy. Household growth will be limited by rising inflation and the burden associated with debt repayment, which will be exacerbated by rising interest rates.
Gross fixed investments will be made in semiconductors, electronics, bio-health and artificial intelligence, which will enjoy tax incentives. Investments in digital and clean energy infrastructure will grow, linked to an increase in public-private partnership projects.
For Czech entities, there may be interesting opportunities not only in the field of business cooperation, but also cooperation in the field of research and development of technologies and components needed for the implementation of the above-mentioned fields.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
- Police: 112
• Emergency Medical Information Centre: 1339
• Ambulance and Firefighters: 119
• Information for Foreign Tourists / Emergency Translation Service: 1330
• Telephone Information: 114
• Immigration Service 1345
• Covid-19, Community Health Center – Call Center: 1339
Important web links and contacts
State institutions of the Republic of Korea
· Office of the President www.president.go.kr
· Office for Government Policy Coordination Prime Minister’s Secretariat http://pmo.go.kr/
· Ministry of Foreign Affairs and Trade www.mofa.go.kr
· Ministry of Economy and of Finance https://english.moef.go.kr
· Ministry of Trade, Industry and Energy www.motie.go.kr
· Ministry of Land, Infrastructure and Transport www.molit.go.kr
· Ministry of Small and Medium Enterprises and Startups www. mss.go.kr
· Ministry of Agriculture, Food and Rural Affairs www.mafra.go.kr
· Ministry of Oceans and Fisheries www.mof.go.kr
· Ministry of Culture, Sports and Tourism www.mcst.go.kr
· Ministry of Education http://moe.go.kr
· Ministry of Defense www.mnd.go.kr
· Statistics Korea http://kostat.go.kr
· City Hall capital city www.seoul.go.kr
· Korean Culture and Information Service www.kocis.go.kr
· Korea Exchange www.krx.co.kr
· Bank of Korea www.bok.or.kr
Business contacts and information
· Korea Business and KCCI Chamber of Industry: www.korcham.net
· KOTRA (State Trade and Investment Promotion Agency): www.kotra.or.kr
· KITA (KR International Trade Statistics): www.kita.net
Major Industry Associations
· Federation of Korean Industry (FKI) www.fki.or.kr
· Korea International Trade Association (KITA) www.kita.net
· Korea Importers Association (KOIMA) www.koima.or.kr
Korean Press in English
· Korea Times www.koreatimes.co.kr
· Korea Herald: www.koreaherald.com/
· Korea JoongAng Daily https://koreajoongangdaily.joins.com
Other sources of information about the Republic of Korea
· Delegation of the European Commission to Korea http ://eeas.europa.eu/korea_south
· Korea Tourism Organization: http://kto.visitkorea.or.kr/eng.kto
· Server about life in Korea (cultural events, accommodation, etc.) www.lifeinkorea.com /
· Lonely Planet Guide www.lonelyplanet.com/south-korea
· Korea Net – General information about Korea www.korea.net/
Controlling the spread of the disease COVID-19
· Korea Center for Disease Control – http://www.cdc.go.kr/cdc_eng
· Central Disaster Management Headquarters – http://ncov.mohw.go.kr/en/
The Ten Commandments for Doing Business with the Republic of Korea
The PaulSourcing agency has prepared ten recommendations for doing business with the Republic of Korea for Czech entrepreneurs interested in business relations with the Republic of Korea.
4 recommendations for entering the Korean market during the coronavirus pandemic situation:
- Searching for business partners First of all, you need to familiarize yourself with the Republic of Korea through current information, for example on the czportal, especially companies that do not yet have experience with Asia. Based on this information, the company itself can preliminarily select which products from the portfolio could be successful on the market. PaulSourcing’s foreign office in Seoul (ZK Seoul) offers a helping hand. In order to find suitable Korean partners, the client needs to specify information about his production and portfolio, about the target group, and also send the main points that differentiate him from the competition, what is the added value and why a Korean partner should cooperate with him. Also if the company already has experience with Korea. Based on this information, completely individually, ZK Soul either first prepares a market survey and a list of potential partners, distributors or importers and sends it to the client. Together with the client, he then selects about 5-10 companies that ZK Seoul will approach and find out the relevant contact, what is the current state of these companies, present the client’s company and plan in Korean (in the form of pre-sent presentation materials and a letter) and verify the interest in cooperation.
- Communication If both parties are interested, ZK Seoul offers the possibility of a direct connection or assistance during a video call or a personal meeting when the situation regarding the coronavirus calms down. Korea is a modern yet very traditional society and business meetings are still preferred in person. Personal contact and a recommendation from a credible person or institution also play a role in gaining contacts and trust. That’s why the role of the state’s contact tracing agency is crucial. Especially for the first step, when a personal meeting is not possible. The so-called “Cold-call / email” does not work very well in Korea for foreign companies. On the one hand, it is not customary, and English is more widespread in higher positions. The first email or phone call is often directed to the reception desk, where without Korean you will usually fail. Only after an explanation in Korean will the company redirect you to the right person. So send direct emails,
- Pro-export events For clients, ZK Seoul offers assistance when visiting Korea for business meetings and pro-export events and fairs when travel becomes more affordable. At the moment, visa-free entry to Korea for citizens of the Czech Republic is canceled, as well as the mandatory two-week state-paid quarantine for all incoming passengers, with the exception of diplomats. Events with personal participation will be in the second half of 2020 at the earliest – for more information, follow the PaulSourcing website. Current travel restrictions to South Korea can be found on the MFA website. However, regular flights to most European destinations are already being restored.
- Current opportunities The situation in connection with the coronavirus crisis is an opportunity for hi-tech new products (especially electronics, semiconductors, AI, ICT, IoT, medical devices, etc.) and services, but also to replace gaps in traditional supply chains. The Korean government is preparing the so-called “supply stabilization policy”, which will enable greater diversification of supplies of strategic raw materials and equipment from countries other than Japan and China. Delivery of priority items will be preferred from the USA, ASEAN countries and the EU, possibly also from China. ZK Soul can help with this step. To monitor business trends and desired technologies, follow the English websites Korea Times, Korea Herald, Yonhap News and Business Korea – sections Economy, business, market, etc.
The Ten Commandments for Doing Business with the Republic of Korea
- Prepare thoroughly Keep in mind that the market is distant and changes very quickly. Try to map demand, trends, obstacles or other specifics in advance.
- Adapt to the local culture Confucian principles influence Korean behavior and the emphasis is on harmony. Respect and understanding of local customs are important in building relationships.
- Be patient Koreans want to get to know their partner first, build a personal relationship and trust with them, often through informal events. Only then comes the business itself, which is lucrative and long-term.
- Find out the position of the business partner in the company Company processes and procedures are linked to hierarchy. The company’s top management decides. It is advisable to find out the position of the business counterpart and his powers.
- Communication and Time Koreans are impatient, making emotional and spontaneous decisions. If they are interested, they exert pressure to get information quickly. However, this does not mean that the Korean partner always communicates promptly with respect to the hierarchy. An oral agreement is considered more important than a signed contract.
- Learn a few polite phrases in Korean English is widespread, but the level of proficiency varies. It is advisable to confirm everything discussed by e-mail. Knowing a few words or polite phrases in Korean demonstrates interest and helps build relationships. A negative opinion is communicated indirectly with regard to the harmony of relationships.
- Follow business etiquette First impressions matter a lot. Be it a polite and trustworthy demeanor, clothing, handing over business cards with both hands, meeting order, communication in a positive spirit. Gifts are part of culture and help build relationships.
- Be punctual Punctuality is standard and expected. In case of delay, it is desirable to apologize in advance by phone.
- Don’t Neglect Marketing Printed marketing and promotional materials in Korean are not a necessity, but they do indicate serious interest.
- A middleman can help you Koreans prefer doing business with Koreans, so middlemen are common. A Korean partner will help you to orientate yourself more quickly in the market, in legislation and has a network of contacts not only in Korea, but also in other Southeast Asian countries.