With a GDP of $2 trillion, South Korea is one of the most developed and highly industrialized nations in today’s world. As such, it is seen as a coveted place when it comes to the expansion of business internationally. Technological development and trade agreements with other major players like the EU also make doing business in South Korea attractive. In this article, we detail some key facts about Korea and outline some cultural expectations making doing business in South Korea easier for you and your Korean counterparts. We also outline a rapid, flexible, and compliant solution for accessing South Korean markets.
What are the advantages of doing business in South Korea?
South Korea provides a great range of market opportunities for its businesses, especially in sectors like electronics, telecommunications, vehicle manufacturing, steel, shipbuilding, and chemicals. Additionally, it puts emphasis on innovation, education and research and development and provides access to a highly-skilled workforce.
Key facts about South Korea
South Korea is a new trade environment for many foreign investors. Here are some key facts:
The nation of South Korea is a presidential republic. It consists of eight provinces known as “do” in Korean, a self-governing special province known as Jeju, the capital city of Seoul, six metropolitan cities called “gwangyeoksi”, and an autonomous metropolitan city- Sejong. The provinces are governed by governors and the special cities by mayors. Both the governors and mayors also have significant authority over the local rules and policies. Apart from Seoul, the other significant urban cities are Busan, Incheon, Daegu, and Daejeon.
The currency of this country is the South Korean Won. The average value of 1 USD is between 1050 to 1200 KRW. The current inflation rate is 1%.
The official language of the region in Korean. However, English is widely taught in schools and spoken by most of the urban workforce.
South Korea is the world’s most virtually connected country with about 92% of its population having access to the internet. Hence, emails are an especially common mode of communication, in addition to phone calls.
The culture of doing business in South Korea
The business culture in South Korea can be vastly different from western countries. South Koreans hold virtues like loyalty, benevolence, integrity, righteousness, modesty, and respectfulness in high esteem. Things like seniority in terms of age, hierarchy in corporate settings, and authority are considered to be extremely important.
The demarcation between personal and professional lives is quite vague and it is not unusual to deem a manager or a boss as a senior family member in this culture. Another important cultural point is the concept of “face” (or “gibun” in Korean). This roughly means integrity or the act of avoidance of embarrassment – both to oneself and others. South Koreans always try to stay away from any potentially embarrassing situation.
South Koreans highly value things like modesty and humility. Hence, bragging about personal achievements in a business setting is considered to be rude and must be avoided. Even while receiving a well-deserved compliment, Koreans make it a point to downplay it and behave nonchalantly. Taking note of these cultural points is an effective way to ensure that you behave in a way that is considered acceptable in this society.
Doing business in South Korea requires formal attire for meetings and other business functions. A suit with tie or equivalent standard attire is essential to creating a positive first impression among your Korean business associates. And lastly, punctuality is crucial in order to be successful in doing business in South Korea.
Ready to expand to South Korea?
South Korea provides a host of benefits to foreign investors looking to expand their business into Asia. If you do choose to expand your company to this region, however, you will have to abide by applicable local rules and regulations.
As a Professional Employer Organization (PEO), our company can assist your business growth in South Korea by taking care of processes like recruiting, onboarding, work visa, payroll, and hiring employees in South Korea on your behalf. We also ensure that these processes are compliant with the local labor and employment laws, thus sparing you from any unnecessary administrative and legal hassles.
Contact us today to know more about our services.