Korea is considered as one of the
world’s most dynamic economies, placed at the 11th position in terms
of being the biggest in the world. It is also classified as the 4th biggest
economy in the Asian sub-continent.
Korean big star economy can be
called as among the most amazing model to be followed by any country up to the
present, bearing in mind the fact that even its economy underwent a relapse
through the tough times of the world economy.
The nation houses several
technological giants such as Samsung, Hyundai, LG and a whole bunch of other
vehicle, television and semi-conductor chip fabricating firms.
In view of these factors, it
looks as if Korea is in fact, a profitable place to do business and offers a
market of high stability and reliability to companies that intend to penetrate
the Korean market. This reality has already attracted many businesses who have started
their undertaking in the Korean market. This favorable disposition has also improved
because of the FTAs (Free Trade Agreements) of Korea with other countries, leading
to generous freedom of starting
a business in South Korea.
This article takes into consideration five reasons,
explaining why entrepreneurs register a company in Korea:
Low
Duty on Merchandise
Korea has formulated policies
that favor trade and business. As per one policy, the duty charged on the trade
of goods is significantly low. This shows the Korean government’s initiatives
of laying the ground for other foreign enterprises to relocate and do business in
Korea, minus the difficulties caused by heavy-duty on goods that have been
imported.
The relevant
normal customs duty rates are presented in the Harmonized System of Korea that
can be accessed at unipass.customs.go.kr/clip/index.do. The normal customs duty in the case of commercial
goods imported into Korea is 8% of the value, whereas the customs duty charged
on farm produce is usually considerably more.
A relief for low-value deliveries
is applicable to commodities worth US$150 or lower if they are categorized as self-use
goods.
Based on the imported goods,
Korean importers may require a specific certification, notification or consent
essentials prescribed by numerous legislations and regulations regulating the
import of such goods (i.e., apart from the Customs Act), including the
Pharmaceutical Affairs Act, the Medical Devices Act and the Chemicals Control
Act, etc.
Though as a rule, for imports no advance
notice is required, Korean importers who want to import specific pharmaceutical
and medical gadgets need to submit a pre-importation report to the concerned
domain fraternity before acquiring clearance through customs and the affected
sector’s receiving of such report is a prerequisite for customs clearance.
Importers inclined on importing
any goods that attract extra provisions as per the legislations apart from the
Customs Act. They are highly recommended to make sure that there is complete compliance
owing to the KCS’s aggressive implementation measures.
Intellectual
Property Security
Korea is highly focused
on the security of intellectual property protection by way of framing enough rules
and legislations. This takes away the stress of companies related to matters of
their intellectual property and allows them to do business without being
worried about breaching copyrights or loss of their professional privacy and approach.
Booming
Startups
Because of the Government
of Korea’s supportive policy framed for SMEs and undertakings, venture
investment and resource mobilization were at the top in 2015, at KRW 2,085.8
billion and KRW 2,626.0 billion, correspondingly. This led to the sharp rise in
the number of ventures, from the figure of 8,798 in 2000 to reach the figure of
31,260 by the close of 2015.
Startups in Seoul got
the support of around 467 accelerators, venture capital funds and government agencies
that stand up for startups in Seoul and its neighboring countries in the year 2018,
a few supported by larger enterprises like Samsung and Naver.
Seoul alone has 85
accelerators and the amount of angel investment rose from about US$170m ($250m)
in 2015 to US$250m in 2017.
From 2015, the Government
of South Korea has made provisions worth $4bn for the benefit of startups. According
to reports from Forbes, this is the largest government support of startups, per
capita, in the world. Seoul’s mayor, Park Won-soon, expressed the vision to add
Seoul to the world’s top five startup cities by 2022.
Korea holds a special
appeal for startups on account of its high-speed broadband connections, the early
launch of the 5G network and the high absorption of technology.
The fuel that drives
seeking and attracting startups has been driven by the slowdown in growth from
the conventional big businesses, as confirmed by Seoul’s Startup Hub co-founder,
Matt Kang.
Digital
Market Scenario
In its yearly report in
January 2019, the global agency, We Are Social, quotes South Korea’s total
population to be 51.52 million, with 95% internet access rate or around 49
million users of the internet.
Because of the fact
that the South Korean government has invested heavily in academics, it has an
outstanding literacy rate of 98%. This means that it has highly-qualified
manpower resources and a digitally savvy market.
In addition to this,
the good deal of dynamic social media users within the country can be
anticipated at 43.66 million with a degree of penetration reaching 85%. The figures
are similar even in the case of mobile social media users.
South Korean users are
on the internet for an average period of 5 hours and 14 minutes each day; nevertheless,
out of this time, only 1 hour and 9 minutes are used on social media. The larger
part of the time is spent on watching videos at 2 hours and 47 minutes.
Along the lines of its superlative
IT infrastructure and high-speed technology, 98% of Korean homes have uninterrupted
access to the Internet. This has helped the country to have one of the largest
internet penetration rates around the world.
As mobile phones are the
most widely used and popular gadgets, South Korea is among the countries with
the maximum smartphone rate of utilization in the world.
This caused the e-commerce
market to make it big, by way of which the residents express comfort and
convenience in online shopping. Many times, Korean online shoppers even get
into a comparison mode on the pricing levels between domestic and global brands,
exhibiting how in-tune they are with this domain.
Creativity
Civic Center
Korea has technologically
advanced its creative industry to a very extraordinary level, surpassing all the
previous benchmarks and setting new benchmarks in the industry by coming up
with the concept of design.
In this connection,
Korea is doing everything it takes, in terms of endeavors with other international
brands that are well-known in the international market of innovations. This greater
creativity is bound to turn Korea into a highly proficient and potent market with
techniques and strategies; therefore, giving more prospects to the businesses
to lure and draw prospective clientele.
Conclusion
What
does ‘South Korea’, remind you of? Premium appliances giants such as Samsung,
LG, Hyundai. Apart from these, the republic is synonymous with K-POP and Korean
drama that has made and is making waves around the world.
However,
the fact that surpasses all these goodies is the wonderful and
best-for-business environment that Korea presents to all startups.
Contact us to help you set up your startup in Korea
right from the base to the best.
