South Korea: it's a miracle

As the 15th-largest economy in the world, the birth country of Samsung and Hyundai has become a prime location to do business.

Korea has made great strides in a mere few decades — so much so that its turnaround has been called "the Miracle on the Han River." Following a war that divided the country into two regions in 1953 (the armistice separating the two is still in force today), the Republic of Korea — better known as South Korea — has grown to become the 15th-largest economy in the world.

Comprising the southern half of the Korean peninsula and 3,000 islands, South Korea has commanded world attention as a place to do business. As the birthplace of such names as Samsung and Hyundai, it's no wonder that 64 South Korean companies were among Forbes' "Global 2000" in 2013, a list ranking the world's biggest public companies by sales, profits, assets and market value. (In comparison, 65 Canadian companies were on the list.)

The Korean peninsula also has a rich history of kingdoms and dynasties dating back to 2333 BC. And with festivals showcasing the beauties of its four seasons, and boasting locations and sights that have spawned various tours — from visiting Buddhist temples to a tour of Gangnam, the commercial area immortalized in the song "Gangnam Style" — Korea has come into its own.

FACTS FOR INVESTORS

1. The government charges a 10% value-added tax on most goods and services (except those classified as basic life necessities).
2. Korea is ranked No. 7 out of 189 countries according to the World Bank's Ease of Doing Business data.
3. In 2013, Korea ranked no. 38 out of 100 countries on Forbes' list of Best Countries for Business .
4. Foreigners can buy property, but this usually involves setting up a limited liability company. Make sure to get an English-speaking lawyer, so that he or she can ensure that you understand the small print and can arrange for the contract to be translated.

TIPS FOR EXPATS

1. Healthcare in South Korea is subsidized by the government; however, there may be charges. Many foreigners opt to take out medical insurance, but for some foreign employees, medical insurance may be covered by their employer.
2. Korea's wireless capability system is incompatible with phones using the global system for mobile communications (GSM). If you have a GSM cellphone, you can rent a SIM-compatible handset, insert your phone's SIM card and unlock the phone through your home carrier.
3. Another option is to rent a cellphone from a Canadian company before you leave (check for service availability), or from a South Korean company, which you must reserve online and for which the rental payment is due when you return the phone.

BUSINESS ETIQUETTE

1. Dress conservatively. Men should wear dark-coloured suits with white shirts, while women should wear muted colours.
2. Because Koreans prefer to do business with someone with whom a personal connection has been made, it's best to be introduced by a third party first instead of introducing yourself.
3. Appointments are necessary when meeting business associates; be sure to schedule them a few weeks in advance.
4. Contracts are seen as statements of understanding that are loosely structured and that can be changed as the work or project progresses.

South Korea chart

About the Author

Yvette Trancoso


Yvette Trancoso is an associate editor at CPA Magazine.

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