Weekly Business Korea – Week 45

TOPIC : Business in Korea

Moon and Abe Meet to Resolve Conflicts

It was the first time that the leaders of South Korea and Japan broke the ice for talks in more than a year to find a solution to a dispute that never seemed to end.

President Moon Jae-in and Prime Minister Shinzo Abe had a quick meeting at the ASEAN summit in Bangkok, Thailand.

A hostile discord because of wartime recompense had intensified lately.

In August, Japan deleted South Korea from its list of reliable trade allies.

South Korea was quick to hit back by terminating its knowledge-exchange contract with Japan.

The dispute hovers around the ‘comfort women’ of Japan. Hundreds of thousands of Korean women – according to a few, around 200,000 - were forced into prostitution for Japanese soldiers at the time of the Second World War.

South Koreans want compensation for it, but according to Japan, the matter is resolved. Japan’s apology or acknowledgment for war sex slaves previously and lately in 2015 came in the form of its commitment to raise 1bn yen ($9.5m, £7.9m) funds for helping the victims.

Nevertheless, it has desisted from increasing the compensation, claiming that the issue was resolved in 1965 when diplomacy between the two countries gained normalcy and $800m plus in the form of loans and financial support was paid to South Korea.

Though critics stand for consultations with victims, something that never happened. A few ‘comfort women’ survivors want a direct apology and remuneration from Japan.

Monday’s statement from the South Korean president’s office said that both countries were for talks to end the discord.

Caesars Entertainment CFO Hession Analyzing South Korea Project Cost

Caesars Entertainment Corp. hopes to open an apparent holistic resort in South Korea in 2021. This will be its entry move into the East Asian gaming market. Nonetheless, the operator is being sensible about the costs linked to the venture.

The Las Vegas-based casino company is engaging with Chinese real estate contractor, Guangzhou R&F Properties Co. Ltd. on the Caesars Korea project with the outlay for the except-for-foreigners gaming spot. To be set up on Yeongjong Island, close to South Korea’s Incheon Airport, the project cost is estimated from $700 million to $735 million. However, this is not a rigid figure and the company is evaluating its financial liability to the Asia deal.

After Eldorado Resorts, Inc. declared its $17.3 billion offer to buy Caesars in late June, experts knowing the latter’s South Korea aspirations have been asking about the fate of the project, considering the purchaser’s obvious disinterest in worldwide growth.

Once the offer came to the fore, the company said that it is undecided on international expansion, but also said that expansion has to be monumental to be pursued.

Besides these, Harrah’s and Horseshoe brands also continue to be interested in developing a gaming facility in Brazil, although the procedure is almost not as advanced as the Caesars Korea push.

Presently, Caesars does not have sufficient presence in East Asia; one of the world’s most profitable gaming territories. When Chinese controllers decided to let foreign competition access the Macau market in 2002, Caesars stayed away and after four years, the company refused to buy a sub-license there from rival Wynn Resorts.

Now, Macau is the nerve center of gambling in the world. The combined gross gaming revenue (GGR) is registered as $30.56 billion, through the first 10 months of 2019. The region caters to Caesars’ rivals like Las Vegas Sands and Wynn.

Caesars Korea anticipates having 720 guestrooms, conference and meeting centers and a supersize casino, only for foreigners.

KT and Hyundai Heavy Collaborate for 5G-based Smart Factory

Korea Business, Weekly Business Korea

Primary telecom operator, KT Corp. and foremost shipbuilding corporation, Hyundai Heavy Industries Group on Thursday said that they will come together to set up advanced smart factory solutions based on 5G network for better efficiency and security.
In May, the two companies inked a MoU of collaboration for a 5G-based smart factory. They already engaged on projects to blend KT's 5G network, artificial intelligence and big data technologies with Hyundai Heavy Industries' robotics and shipbuilding proficiency.

After a 5G network rollout for enterprises in December, KT has been building B2B services to expand usage scenarios of the ultra-fast network and build new means of income.
In the words of KT Chairman Hwang Chang-Gyu, ‘A smart factory is one of the key B2B models available on the 5G network’. ‘The companies will collaborate to drive innovation in the local manufacturing industry.’

KT stressed that its enterprise-based 5G network is more secure against hacking and offers professional solutions designed for domestic manufacturers.
Also, KT’s smart factory solution can swiftly identify robots’ strange behavior and eliminate errors.

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Navigating the K-Culture Industry for Foreign Investors in Korea

In the dynamic realm of global business, the K-culture industry in Korea shines as a beacon of innovation and opportunity. Tailored for discerning foreign investors and entrepreneurs eyeing expansion into Korea, this comprehensive article delves deep into the vibrant tapestry of K-culture. Through meticulous analysis, industry insights, exploration of investment advantages, and strategic guidance, it offers a thorough understanding while emphasizing the importance of credibility and respect in navigating this expansive market. Exploring the K-Culture Industry Landscape The K-culture industry has undergone a remarkable evolution, with 2022 revenues exceeding 148 trillion won, marking a 7.7% increase from the previous year, as reported by the Korea Creative Content Agency. Spanning gaming, beauty, broadcasting, music, and more, this multifaceted industry not only captivates global audiences but also serves as a robust economic driver for Korea. A deep dive into its interconnected sectors reveals a dynamic ecosystem fostering continuous expansion and innovation, essential knowledge for potential investors. Insights into Future Industry Prospects The future of the K-culture industry appears promising, solidifying its place among the top global contenders. With its adaptability to emerging technologies and innovative trends, the industry remains poised for sustained growth. The fusion of tradition with cutting-edge technology offers unique avenues for market expansion, engaging audiences worldwide in immersive experiences and creating diverse investment opportunities. Advantages of K-Culture Investment Investing in K-culture extends beyond economic gains, enhancing Korea's global image and facilitating cross-cultural exchanges. With export revenues surpassing imports, the industry offers stability and profitability for foreign investors. Moreover, it aligns with the global trend of cultural appreciation, allowing investors to contribute to a rich cultural narrative while reaping financial rewards. Understanding these advantages empowers investors to navigate the K-culture landscape confidently, aligning their strategies with its dynamic future. The Sociocultural Influence of K-Culture K-culture's profound impact extends beyond entertainment, fostering cultural diversity and inclusivity on a global scale. The widespread popularity of K-dramas, K-pop, and other cultural exports has created a shared cultural language that transcends borders, uniting people from diverse backgrounds. This interconnectedness enriches the global entertainment landscape and promotes a more harmonious society, breaking down cultural barriers and fostering mutual understanding. Furthermore, K-culture's sociocultural influence extends beyond entertainment, shaping various aspects of daily life such as fashion trends and beauty standards. Korean cultural exports serve as a bridge between East and West, fostering cross-cultural dialogue and appreciation. This cultural exchange promotes diversity and enhances global cultural understanding, contributing to a more interconnected and inclusive world. In essence, the sociocultural impact of K-culture showcases its ability to shape perceptions, bridge cultural divides, and promote global harmony. As investors explore opportunities in the K-culture industry, recognizing its broader societal contributions is essential for understanding its profound and lasting influence on a global scale. Guidance for Strategic Investment 1. Harnessing the Global Reach of K-Pop and Gaming: The global success of K-pop groups like BTS and popular games such as "League of Legends" highlights the importance of strategic investment in talent development and international expansion. By strategically guiding talent and establishing overseas footholds, investors can capitalize on the immense global appeal of K-content. 2. Maximizing Revenue through Merchandising: The monetization of K-content through merchandise offers a lucrative opportunity for investors. Groups like BTS have successfully expanded their reach and revenue streams through carefully curated merchandise lines. This merchandising strategy not only boosts financial returns but also enhances the cultural influence of K-content, catering to the growing demand for K-pop and gaming-related products worldwide. 3. Leveraging Cultural Diplomacy and Soft Power: K-culture plays a significant role in South Korea's cultural diplomacy efforts and soft power expansion. Through the global reception and appreciation of Korean entertainment and cultural exports, Korea has elevated its global standing and influence. Strategic investment in creating content that resonates with international audiences fosters cultural exchange and enhances a nation's soft power on the world stage. Conclusion In conclusion, the K-culture industry in Korea presents a wealth of opportunities for investors seeking to tap into its global appeal and economic potential. Tailored for foreign investors and entrepreneurs looking to expand into Korea, this article provides a comprehensive exploration of K-culture, highlighting its revenue growth and diverse sectors. Recognizing the broader societal impact of K-culture beyond its economic contributions is essential for informed decision-making and strategic planning. Pearson & Partners, a consulting firm specializing in aiding expansion into Korea, offers strategic guidance for investors seeking to capitalize on the opportunities in the K-culture industry. With expertise in incorporation and tax accounting services, Pearson & Partners ensures a seamless entry into the Korean market. For personalized assistance in navigating the complexities of K-culture investment and maximizing returns, contact us today.

South Korea FDI: What is it?

The Significance of Foreign Direct Investment (FDI) Foreign Direct Investment (FDI) refers to the establishment of a new corporation by a foreign entity or individual, or the acquisition of shares or equity in domestic enterprises, to establish continuous economic relations and participation in management. Types of Foreign Direct InvestmentAcquisition of shares or equity in domestic enterprises: The investment amount must be at least 100 million won.Ownership of 10% or more of the total voting shares or total investment amount is required.*Exception for not meeting the investment ratio: Dispatch of executives or contract for appointing executives. Long-term Subsidiaries Refers to subsidiaries overseas (foreign direct investment corporations) of foreign invested companies or foreign investors (individuals), or companies with capital investment relations with such overseas subsidiaries or foreign investors, which have provided support for five years or longer. Contributions to Non-profit Corporations Reinvestment of undistributed retained earnings of domestic foreign-invested companies. Required Documents for Foreign Direct Investment Declaration - Two copies of the Foreign Investment Report Form for each type of investment (attached format) - One copy of nationality proof document of the foreign investor (passport or official certificate of entity issued by the government of the investing country) - Notarized power of attorney and identification of the representative (if representing the foreign investor) - Consent form for collection and use of personal information and unique identification information (for foreign direct investment) - Other documents for each type of investment Flowchart of Foreign Direct Investment Procedures 1. Consultation and preparation of investment declaration form (Bank) 2. Submission and issuance of investment declaration certificate (Bank) 3. Inflow of foreign capital (Telegraphic transfer/Cash importation) 4. Handling of investment funds (Payment of share capital/Bank) 5. Incorporation registration and business registration (Court Registry Office/Tax Office) 6. Issuance of certificate of registration for foreign-invested enterprise (Bank) Conclusion Embark on your journey into South Korea FDI with confidence. Whether you're considering investment opportunities, navigating documentation requirements, or seeking expert guidance through the registration process, our team is here to support you every step of the way. Contact us today to unlock the potential of foreign direct investment in South Korea.

Company Formation: Navigating South Korea's Lucrative Business Landscape

In the era of global interconnectedness, South Korea stands out as a beacon of technological advancement and economic growth, offering lucrative opportunities for international corporations. Entering this market through the establishment of a subsidiary goes beyond mere access to a thriving consumer base—it provides a gateway to a hub of innovation. However, embarking on this endeavor requires meticulous strategic planning and a deep understanding of the local business environment. This guide presents a comprehensive overview of the essential steps involved in setting up a business in Korea, ensuring a smooth and compliant entry into one of Asia's most dynamic markets. Navigating the Registration Process The journey to establish a subsidiary in South Korea begins with the critical phase of registration. This entails selecting the appropriate legal entity, such as a joint-stock company (Chusik Hoesa) or a limited company (Yuhan Hoesa). Each entity comes with distinct legal obligations and consequences, making the decision crucial for any business. The registration process involves thorough documentation, including the creation of articles of incorporation, defining the company's objectives, and assembling a board of directors and officers. These documents then undergo review by the Korean court for approval. Successfully navigating this stage lays the foundation for your subsidiary, establishing its legal identity and facilitating subsequent operational processes within the Korea business setup framework. Choosing the Right Legal Structure Selecting the legal structure for your South Korean subsidiary is a decision of great importance, impacting control, liability, and financial flexibility. A joint-stock company (Chusik Hoesa) is favored by larger enterprises for its scalability and ability to raise funds through share issuance. Conversely, a limited company (Yuhan Hoesa) is often preferred by smaller businesses due to its simpler structure and reduced reporting requirements. Making this choice requires careful legal counsel and a thorough understanding of your business's long-term objectives and strategies. The chosen legal structure ensures compliance with South Korean regulations and aligns seamlessly with the parent company's global goals within the Korea business setup context. Navigating Financial Regulations and Banking Standards Compliance with South Korea's financial regulations is crucial for the successful establishment of a subsidiary. This includes adherence to foreign exchange controls and understanding capitalization requirements. Establishing a corporate bank account in South Korea is a pivotal step in managing transactions, payroll, and other financial activities. Additionally, transferring initial capital in accordance with South Korean investment regulations demonstrates the parent company's commitment and serves as a vital investment for the subsidiary's future endeavors. Navigating these financial intricacies requires careful planning and often entails seeking advice from financial experts familiar with the local banking and investment landscape within the Korea business setup framework. Establishing Presence in South Korea's Real Estate and Infrastructure Sector Establishing a tangible presence in South Korea encompasses various strategic decisions regarding location, infrastructure, and real estate. Selecting an appropriate location involves considering factors such as market accessibility, proximity to suppliers and customers, and the availability of skilled labor. Additionally, a thorough understanding of South Korean real estate laws, including lease agreements and property rights, is crucial. The setup process extends to building a robust infrastructure, including communication systems, office spaces, and technology networks. This phase is pivotal as it not only demonstrates the operational capabilities of the subsidiary but also signifies its commitment to long-term growth within the South Korean market within the context of Korea business setup. Conclusion Venturing into establishing a subsidiary in South Korea is a strategic initiative that, when executed efficiently, offers significant rewards. It requires a deep understanding of the Korean market, meticulous planning, and strategic execution at every stage—from legal registration to financial compliance and physical establishment. Despite its challenges, this endeavor can lead to substantial business growth and a strong position in one of the world's most dynamic economies. With thorough preparation and attention to detail, your business can successfully navigate the intricacies of setting up a subsidiary in South Korea, paving the way for a prosperous and impactful presence in the Asian market. Pearson & Partners: Your Trusted Partner for Korean Market Expansion Planning to expand your business into the vibrant Korean market? Let Pearson & Partners be your guide. We specialize in providing comprehensive services for visa acquisition and tax accounting, ensuring a seamless transition. Our team excels at navigating the complexities of Korean regulations, ensuring compliance and a smooth business setup process. Contact us today for expert guidance tailored precisely to meet your unique business objectives and regulatory needs.

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