Here are three prominent happenings in the Republic of Korea, during the week that was:
Japan and South Korea joined hands Thursday for cooperation on North Korea despite cold bilateral relations.
Tokyo and Seoul have not been on good terms since South Korea’s top court last October ruled some Japanese firms to reimburse Koreans forced to labor in their wartime mines and factories.
Japan, referring to the1965 treaty called the ruling a breach of international law, causing the conflict to seep into trade and security affairs.
The talks held in Tokyo were of the highest level between the two feuding countries. There were handshakes but no smiles.
Both, Japan and Seoul agreed that even though relations are presently quite backbreaking, they cannot be left that way.
This is the first summit between the two nations since more than a year and there was no meeting planned between the two.
The hostility between Japan and South Korea is associated with the history of Japan’s 1910-45 settlement in the Korean peninsula, the deployment of forced labor at businesses and women in wartime army brothels and controversy on the possession of islands in the sea common to both countries.
In August, South Korea declared plans to end a military intelligence-sharing agreement with Japan after it expired in September, following the mounting tensions over North Korea’s nuclear weapons program and tough competition from China and Russia.
South Korea is aborting its developing-nation privileges at the World Trade Organization after accusations by the Trump administration that a few countries were exploiting the prestige.
President Donald Trump in July bracketed South Korea among countries ask for the status even though they were among the world’s wealthiest nations. According to him, South Korea has primarily used the status for the safety of its farming sector. Korea imposes a tariff of more than 500% on rice imports.
South Korea’s Finance Minister Hong Nam-ki, on the country’s national television, said that the government is committed to best safeguard its susceptible agricultural zones like rice, going forward.
In an independent release, the Finance Ministry said that South Korea is not surrendering the rights it has secured as a developing country and that this ruling will only affect forthcoming WTO discussions. South Korea will also go on honoring WTO-approved treaties signed in the past between developing nations, it said.
South Korea’s declaration will probably exert more pressure on China to abandon its status. Trump has time and again called for the world’s most populous country to let go of the WTO-provided benefits.
The WTO permits countries under the status to get more time to implement business agreements and safety against emergency import restrictions by developed nations.
South Korea is the second Asian country to have a schedule in place to require oceanic vessels to switch to ultra-low sulfur fuel when steering through or close to its key seaports.
January 1, 2020, onwards, ships navigating within South Korea’s Port Air Quality Control Zones (which will be later known as Control Zones) will be allowed sulfur content below or equal to 0.5 per cent (0.5% sulfur fuel). This is in adherence to the strict global sea fuel sulfur norms framed by the International Maritime Organization (IMO) to be implemented since January 2020.
On September 1, 2020, ships will move over to 0.1% sulfur fuel while docking at harbors in the Control Zones. This covers Korea’s five major seaports: Busan (the world’s 6th busiest container port), Incheon, Yeosu-Gwangyang, Ulsan and Pyeongtaek-Dangjin.
South Korea will be the second country in the Asian subcontinent to enforce a 0.1% fuel sulfur limit on deep-sea vessels.
South Korea and its leadership have done an excellent job through all its efforts in dealing with shipping and port pollution. International maritime transportation is the reason behind 800 untimely deaths caused every year in South Korea and also more than 24,000 premature mortalities in East Asia.
Korea’s ECA rules and other procedures stated in the Special Act are milestones towards the safety of public health in South Korea, as well as the entire region.
With the setting up of an IMO ECA in the region, China and South Korea may stretch the 0.1% sulfur fuel provisions to every ship navigating in the seas between the two countries. This would further improve the atmosphere and usher better health.
NRDC is hopeful of providing all possible support to South Korea, for implementing this critical ruling and also in the way forward to tackling marine and port pollution.
Edelweiss & South Korea’s Meritz to start a $425-million Fund Scheme According to Edelweiss, one of the primary targets of the platform is to find and invest in economically feasible, premium projects and aid them with funds and project management expertise. Edelweiss Alternative Asset Advisors (EAAA) along with South Korea’s Meritz Financial Group launched an initial fund of its financing stage, aiming for $425 million. The platform is to comprise finances for buying home property loans and offer essential project-ending finances to high-grade, economically fruitful projects. The platform’s funds will be controlled by Edelweiss’s Alternative Asset Management business. The aim is to collect $1 billion, mainly from similar global institutional investors, in the coming 1 year. Among the key objectives of the platform is the identification of and investment in saleable, high-standard schemes and provide funds and project management proficiency. Edelweiss said that this is its first alliance with an Asian institutional investor. Over the past few months, Edelweiss has also associated with international institutional investors like CDPQ in its lending trade, US-based Kora management in its investment consultancy business and Arthur J Gallagher in its insurance consultancy business. PH, South Korea Ink a Deal on Renewable Energy Cooperation South Korea and the Philippines came together to execute an MoU on renewable energy cooperation, signed in Seoul in June 2018. South Korea’s Ministry of Trade, Industry and Energy stated that its vice-minister, Cheong Seung-il and Philippine’s Defense Undersecretary, Cardozo Luna signed the executive contract in Seoul on Oct 25. South Korea, with the help of this MoU, is supporting DND’s (Department of National Defense) drive to develop a solar photovoltaic and other platforms of renewable energy generation. The purpose of this is the supply of electricity to military establishments and neighboring regions. Particularly, South Korean entities can participate in developing 100 megawatts power generation projects. The MoU was one of the many agreements that were officially endorsed during President Duterte’s visit to Seoul in 2018. Korean Manufacturing Sector to get Big Data Backup from Country’s Apex IP Office The Korean Intellectual Property Office announced its plans to push the competitive power of the domestic supplies, components and equipment industries and make them depend less on foreign technologies by way of IP big data. As per the country’s top IP office, it has four goals: less dependence on foreign materials, component and equipment-based engineering; make South Korea’s R&D more IP-focused; reinforce IP competition of small and mid-sized companies and develop an IP infrastructure for a rational economy. KIPO’s decision is based on continuous international issues around technological domination by major economic powers, pushing countries’ fight for IP rights. It emphasized on a national strategy for swift IP acquisition. It also stated apprehensions about South Korea’s trade, burdened by its equation with Japan and increasing competition between world economies such as the US and China in the run for exclusive rights of advancing technologies.KIPO’s IP big data provisions will include more than 100 kinds of materials, parts and equipment research and development. Using this, even SMEs can develop their technologies. It will also help companies broaden their supplies through options to key materials, joint-ventures and acquisitions or by technology transfers for products that are not easy to be manufactured locally. KIPO will also assist companies in identifying technological innovations through IP big data that could be instrumental in leading the new market.Big data benefits are also intended for bio-health and secondary batteries, government departments and private R&D companies. To boost local SMEs’ IP effectiveness, KIPO plans to grow the state budget for IP-supported financing from 700 billion won ($598 million) in 2019 to 2 trillion won by 2022, to use the system to streamline SME’s IP-backed loans and investment. For maximizing public participation in IP investment, it plans to come up with funds for businesses and individuals to obtain patents abroad. To bring about a fair economic order, KIPO endeavors to stop technology theft and further safeguard IPs of innovative businesses to foster creative businesses and technologies. It will also more stringent laws and penalties for IP theft.In the words of KIPO Commissioner, Park Won-joo “As nations with developed IP systems, such as the US and the UK, have led the past three industrial revolutions, a country that will become a leader in new technologies including artificial intelligence and big data will lead the ‘fourth industrial revolution’ and global technology,”. He further stated that KIPO will make every effort to help nurture South Korea into a foremost country of technology in the international market, in terms of IP.read more
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.read more
South Korea’s innovative governmental reorganization has led to the nation hovering on the top of the World Bank’s ranking of ease of doing business in different countries. Indeed, efficient laws, transparent marketplace and the government’s enthusiasm to welcome international investors have resulted in doing business in South Korea a smart move. If you already run a business elsewhere and are looking to expand it in Asia, there is no place like South Korea and no better time than now to go for it. The reason behind this is that South Korea’s post-registration procedures that were earlier necessary to be complied with at the time of setting up or expanding a business, have now been eliminated. The Index of Economic Freedom and businesses characterizes South Korea as ‘largely free’ and both, old, as well as new companies, encounter minimal red tape interference from the government. As a regular rule, in practice, the Confucian principles and code of conduct drives the South Korean culture and even business practice. Confucian values comprise respecting those who seem decent, a quality that is gained via dedication, labor, abiding by rules, mutually agreeable decisions and time and energy used in establishing links. This is evident in the Korean saying, “Make a friend first and client second”. The broad database and guidance spread across on the World Business Culture website is a great help to whoever intends to do business in South Korea get the know-how about the country’s business and economy. In the meanwhile, this piece articulates the advantages that Korea offers for business expansion in Asia. Appetizing Incentives Foreign Direct Investment (FD) incentives are instrumental in reimbursing foreign investors in South Korea for their financial inputs, at the same time also lowering their launching expenses. The present tax regime provides a tax rebate to international enterprises having the ability to play an important role in the Korean economy. Simultaneously, the government helps these companies set up their industrial establishments (or help them acquire a good site location) and supports them with financial aid. Government-assigned free trade zones drive a lot of expansion, along with minimal bureaucracy in manufacturing, distribution and trade; reduced land and buildings rents; tax credits; and single-window administrative unit. Also, streamlined custom reporting processes are implemented in a variety of value-added planning operations. The government has also built free economic zones to support companies in free trade zones, so as to drive logistics at key global hubs and set up a welcoming residential environment for foreigners. Till date, the government has marked six free economic zones. Geography Placed strategically with China on one side and Japan on the other, South Korea is very close to more than 60 cities having more than a million inhabitants (average 3 hours away by flight). South Korea has extensive free trade agreements (FTA) with the Association of Southeast Asian Nations, a provisional accord with India, an FTA with the European Union and a number of other nations. Smart Customers South Korea’s computer geeky consumers have brought a lot to the growth of the country’s home market in the last ten years. Korean cell phone and home appliance makers— popular for their high-grade products all over the world— have been successful, thanks to their perceptive local customers. This is why for technology companies such as Microsoft, Motorola and eBay, as well as consumer sector firms such as Procter & Gamble and L’Oreal, South Korea is a bench test for their upcoming products. Brilliant Framework South Korea is well-anchored with respect to docks, airports, roads and rails. It is evident that foreigners thinking of investing in Korea would be successful in touching upon statutory limitations, commitments concerning the said investment and likely union matters. The outstanding sources for this information are the American Chamber of Commerce in Korea and the U.S. Embassy Seoul respectively. Prospects and Pain Points On one hand, we got acquainted with the many world-renowned strong points of Korea, there is also an array of domestic challenges. As per the latest economic report, South Korea’s population is dwindling faster than that of any other OECD (Organization for Economic Co-operation and Development) country. Birth rates in Korea have gone down to 1.19 children for every single woman, a rate that going forward in the long-term - would affect to make the population extinct by 2750, as specified by official government forecasting. In the wake of this decline of the population, the Korean Development Institute predicts sluggish GDP growth from the present figures of approximately 4% to 2.75% in 2030. That is indicative of the fact that economic growth will mainly be based upon labor productivity (higher the labor productivity, more will be the economic growth). Korea’s population that is growing old seems to have an unclear tomorrow. There are rare provisions of social welfare schemes. Old-age pension and wealth management are the latest innovations. So far, in Korea, the family has been a financial social cover. However, Korean society is reinventing itself. Sprawling across a period of 40 years, to 2000, Korea’s per capita income has increased from 10% to 60%. With this rise in incomes, an increase has also affected inequality and shrinking family units. Over and above, the wealth that has been collected is more than what can be adjusted in Korea’s local financial markets. Consequently, pension fund managers are inclined to find places outside of Korea to make investments. Korea’s government is sensitive to the challenges that face it. Thus, its latest development plan is aimed at diversification of its industry and home electric appliances - heavy economy, using innovation to drive growth. Seeing the past track record, this comes across as a logical step: The Kia (Hyundai) factory in Slovakia is so ahead of time as far as its robotics is concerned that, it is a picture-perfect location to shoot Terminator 6. The facility that began operations in 2007, has emerged as among the few car factories across the world that can build as many as 8 types of models with a common effect. Innovation can change other unripe zones of the economy like services, agriculture and water resources management, particularly in the event of getting aid in the form of investment and technical support from abroad. Foreign businesses keen on expanding in Asia should collaborate with corresponding Korean firms that have moved much ahead in expansion. Koreans are glad to have something that makes them more capable. In the event of a foreign company that brings in any type of a value-added factor, the potential of starting and developing a fruitful and profitable business liaison is very high. If plans and designs progress well, perhaps those companies’ directors and officers can call it ‘business better than usual’. Conclusion South Korea's extraordinary rankings for ease of doing conducive business are driven by quite a few contributing factors that work in tandem. These include the nation’s topmost digital infrastructure and skilled human resources, appended with decades of investment in an internationally-acclaimed learning system. Reforms initiated and churned out by the government have made it the entry and exit conditions for foreign capital more profitable. Likewise, its capital markets are in the midst of the most developed in the developing global scenario. If you are looking to expand your business and set up an office or a company in Korea, we would be happy to help. Get in touch with us for details.read more