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Seeking Korean Partner/Consultant to Promote ESL Website, Part II (How To Connect to Korean Consumers Offline)

A few weeks ago, I was contacted by a former client asking how to market his ESL website to Korean consumers. He's tried various online approaches which haven't worked and my previous article discussed that in detail, including some concise tips at Korea Business Central)

In addition to the online aspects of his efforts, he also asked about how to connect to his market offline:

...To help my chances, I'd like to begin searching for someone in Korea who can help. This person might act as a recruiter, or even work together to launch a new online ESL business. I'm keeping a very open mind on this. So, if you think you might know anyone who'd be interested or can advise me on where to begin looking, please let me know.

Here's my answer:

As I pointed out in my previous post, the market for ESL education in Korea is big, but crowded. I don't think an online-only approach is likely to work in Korea for various reasons. I agree with your conclusion that you need someone on the ground to support you offline. I suspect that "someone" may need to be you, as I'll explain below.

The first reason you can't just market online is simply that there are so many ESL websites out there that, to get seen in your market, you've got to stand out from the crowd with a strategy that does more than just throw time and money at Google, Naver and Daum. 

But beyond that, while there may be a few lone rangers in Korea who are bypassing the offline options and are going to the Internet to resolve their English learning needs, the vast majority of Korean language learners start their search with resources closer to home.

Furthermore, the average student doesn't just call up institutes and English teachers in the local phone book; he/she goes where his/her friends are studying (for kids) or where his/her co-workers are studying (for adults). Though I'm not prepared to say with confidence that this is unique to Korea (or East Asia) because of the group-oriented culture (though this might be an aggravating factor), the normal way for someone to get into the English study track is through personal referrals (often the mothers of other students) or company directives, and usually to a local institute or teacher.

Not just that, while Koreans are certainly interested in learning English due to an internal desire to speak better, the short-term motivation is usually more down-to-earth: to get better grades at school or fulfill a career requirement. And so Korean ESL students will generally put priority on courses that take them over the shortest distance to these external goals, and once they've done that, very few have the time or energy left to also study online with a course that isn't directly linked to these immediate needs. 

Not only are you competing against other English programs geared toward pragmatic ends that enjoy an offline referral network, but you also have to contend with everything else in the average Korean student's schedule. Remember, Korean kids aren't just learning English, they also take after-school classes to learn a ridiculously long list of other subjects and by the time they reach middle school, the diligent students are often getting home from "cram school" at 10pm, 11pm or later... 

One more thing you're working against is the social benefits that kids get from going to the institute. Since they're studying so many hours during the day, the institute is an important place for spending time with friends. But an online option is presumably a one-on-one thing, or at best, a group discussion environment of people from a variety of places who don't know each other. A sizable portion of your market won't be interested in a study approach that removes the social aspects which are rooted in their existing social network. At least, I know that this has been an important factor in my kids' after-school study choices.

It seems to me, then, that you will have to get your business connected to a local network and be able to credibly present your service as an alternative (or better, complement) to local resources that help learners get better grades on their tests at school or meet career requirements at their place of employment. Considering how price inflexible Korean mothers can be when trying to get the best education for their kids, you won't be able to do this with a marketing appeal that focuses mainly on lower cost; you've got to offer quality differentiation on a variety of dimensions that your market will find important.

This will take both strategic marketing AND program development.

It will also take "boots on the ground", though I don't think it will require you to learn Korean or become an expert in the Korean culture, nor do I think you're going to find a stranger willing to recruit for you on a commission-basis. Everybody wants that; just today I received yet another request to help (wait for it...) an online ESL website get students in Korea.

One approach could be to connect to an offline service provider and complement their service without them feeling threatened by your role or being tempted to replace you. What I mean is that by offering lessons by a native-English speaker, you could plug into the teaching efforts of independent Korean teachers or small Korean institutes that are struggling just like you and would benefit from having a native English speaker on staff to supplement the grammar lessons they are giving their students. If kids at an institute are being taught English for three hours a week, you could offer to add on a 30-minute or 60-minute Skype call direct to the classroom with the kids gathered around the computer, to help them practice what they've learned. I suggest small institutes or independent teachers since large institutes and corporations are already making their own arrangements for this and won't be open to your value proposition.

At the same time, you have to figure out how to build relationships or share equity or something else that overcomes conflicts of interest, where your Korean counterparts worry you'll rip off their students after getting access or where you won't worry they'll just change Skype teachers at some point in time. Thus, you're not going to recruit these partners by email.

I suspect you're going to have to come to Korea and immerse yourself in the ESL industry (such as by teaching English) for awhile to make contacts and build relationships and experiment with approaches that work and that Koreans respond to. This knowledge of the market (and a little of the culture, which you can get up to speed on quickly and affordably with the KBC Professional Certification Program) and a lot of sweat equity on the ground is probably the only way to bootstrap your way to a successful online business.

** Visit the related discussion on Korea Business Central: "How Can I Market My Web-Based ESL Business Offline to Korean Language Learners?"

Seeking Korean Partner/Consultant to Promote ESL Website, Part I (How To Market Online to Korean Consumers)

** Visit the related discussion on Korea Business Central: "How Can I Market My Business Online to Korean Consumers?"


The Internet has opened up possibilities for new business models, and many new online businesses are sprouting up in the field of teaching English as a second language. It's not hard to understand why. Rather than fly native English speakers around the world to live in unfamiliar surroundings to teach English to locals, instructors can now connect to students over Skype and educate without travelling. It's a great way to reduce costs and avoid other cultural and logistical difficulties while delivering value to language learners the world over.

With falling barriers to entry, the field has gotten crowded though, with thousands of websites cropping up to offer these virtual/remote English lessons. Over the years, my team and I have had the privilege of translating a few of these sites to Korean so that our clients can connect to the market in Korea for ESL instruction. Unfortunately, a nice website that communicates well is only the first step, as the following message from a previous client makes clear. 

Hi Steven, My name is ________. Last year I had you do the translation for my ESL website. I was impressed with your service, and knowledge of Korea, so I wanted to reach out to you on something. So far, I've had a real tough time attracting business in Korea. Early on I had foolishly spent money on Google Adwords, and Twitter advertising, which didn't generate results. Not to mention large amounts of time with social networks, and the like. When I found out about the popularity of Naver & Daum, I hired a professional SEO service to optimize my site, along with "guest blog posts". After that, I saw a small uptick in traffic, but still not converting into new clients. It's been frustrating, and depressing at times. I'm willing to the spend the time and money, but I feel like not knowing the Korean language and culture is putting me at a disadvantage....

 I answered my client as follows.

It's nice to hear from you. I remember working on the Korean localization of your website and I'm glad to hear that our service met your expectations. I recall that your attitude to the localization process put quality above cost and I believe you when you say you're willing to spend the time and money to make the endeavor work. In fact, as someone who has spent a ridiculous amount of money and effort on online marketing efforts of various kinds, I have a great deal of sympathy for your situation.

You asked near the beginning of our business relationship about the value of having Korean text alongside English YouTube videos and about whether it would be effective in attracting Korean students. I just dug back into my archives and found my following reply: 

"It's a tough call, especially as you're jumping into a very competitive market. If you've got the marketing strategy in place to support the YouTube funnel, then of course, the Korean text can be an asset. If you're not sure what kind of traffic you can pull to these videos, you might put that cost off until later. I've seen more than one businessperson (myself included!) spend a lot of money to get all set up only to find that the marketing is lacking." 

In advising you, I'd like to first discuss some insights about online marketing in Korea. At this point, I should point out that I don't think this will ultimately be cost-effective for you in your business, but the following does describe a starting point for understanding how a successful campaign might be put together.

You mention that Google Adwords was a waste of money. It all depends on what niche you're in, but for ESL, I'm sure the bid prices on keywords are through the roof and too many non-converting visitors will drain your bank account quickly. The only way to make it work is to have a deep sales pipeline with an integrated range of goods and services that you're marketing effectively to those who click on your Adwords ads. Top advertisers on major keywords are prepared to lose money on the initial leads in order to harvest value over a longer period of time.

I'd be interested to know how you operated and targeted your Google advertising. Did you do it yourself? Regardless of what Google says, Adwords is not for the faint of heart, and not just because the tools are complicated (and getting more so everyday) and the underlying algorithms secret. I would even say that Google's representations of their system to novice advertisers are even misleading and incomplete. But as you may have found out, working with a competent (or even incompetent!) SEM professional is expensive, and even if your consultant does know what he/she is doing, you often won't get the level of focused and sustained attention you need to make it work. 

In fact, in your market, there are bound to be a lot of competitors, some with deep pockets (thanks to cash flow from offline, successful English institutes in Korea but without a sustainable strategy), just throwing money into the marketing effort. This makes Google rich, but leaves everyone else paying more than they should.

Furthermore, running a Google Adwords campaign in English isn't going to get you very close to your market since your potential students probably aren't doing most of their searching in English. That means your ads need to be localized, too. But since Google Adwords isn't a set-it-and-forget-it approach, you can't just get your ads translated once somewhere and then throw them up online. The ads must be constantly monitored and optimized, not just from a standard marketing perspective but also in terms of language and culture, which makes it a high-touch/high-specialization/high-cost adventure. (BTW, I've written about a surprising aspect of character limitations that applies to Korean ads on Google Adwords.)

Besides, even if you do get your online marketing program going effectively on Google in Korean for Korean consumers located in Korea, you'll then be reaching... just 10-15% of the search market. As you noted already, the movers and shakers in the Korean market are still Naver (with about 60-70% of the market) and Daum (with around 20-30%).

You said that you tried SEO for the Korean search engines, but these native Korean portals also run their own proprietary advertiser tools modeled on Google Adwords. The interfaces are in Korean and the complicated Korean government-mandated requirements make it next-to-impossible to register to advertise as a non-Korean. I tried it about a year ago on Naver just to see if I could, and I barely managed to sign up, but I still had to register as an overseas marketer since my websites are owned by my US corporation, which meant that the process had to be jury-rigged to get me through the ad approvals every time. I ultimately never did anything with it; just too much trouble. This means you would ultimately have to work with a Korean agency to get directly to Daum and Naver, and to do that, you're looking at talent of dubious competence and high cost and you won't be able to transparently monitor the process.

At any rate, if you do choose to move forward with online marketing to Korean search engine users, I would recommend the following approach which, done right, would minimize your costs and maximize your effectiveness.

Stage 1 - The online advertising interfaces of the Korean portals are primitive compared to the Google system and I don't recommend you start with them. Instead, work with an SEM provider who is qualified to advertise on Google in English and supplement this with a Korean language consultant who can localize and adjust ads as instructed by the SEM professional. Keep this up until you've got a strong campaign going that generates profitable leads and until you've exhausted the potential that Google is giving you in its 20% of the Korean search market. Be sure you have Google Analytics installed on your site and know how to use it; you'll need that both to optimize for Google, as well as for Stage 2 below.

Stage 2 - Once you've wrung out all the value from Stage 1, you're ready to attack the Korean portals. Do this by working through an SEM professional in Korea. You won't need the best expert here (good thing, because they're hard to find!); just someone who knows the nuts and bolts and has an account that is authorized to to resell advertising for foreign advertisers on the Korean portals. Make it clear that you'll be providing the optimized ads and keywords from your Google campaign and so only minor optimization within the Naver and Daum ecosystems will be required. Then feed the ads, keywords and other demographic information directly or through your Korean language consultant to the Naver/Daum seller and tell them to set it up.

Normally, advertising on the Korean portals would be a black box, since you won't have easy access to what's going on there. But because you'll have the results of your Google campaigns to benchmark against, you can simply watch carefully through Google Analytics to make sure your Korean campaigns are generating results on par with Google. As you continue to optimize your Google campaigns, you can have your Naver and Daum campaigns updated as well.


Regarding marketing on SNS, don't bother unless you're prepared to engage in time-consuming conversation with your market. On the other hand, there are umpteen online "cafes" which you could join on Daum or Naver. These are online meeting places that bring together groups of people interested in the same topic. Some would be focused on learning English and if you were to make your presence known in these spots, such as by sharing value in the discussions, you might be able to get closer to your market. However, I haven't tried it and I don't know how practical it is because of the Korean-language interfaces. Done strategically, it could at least would get you into an under-served area away from the crowds at Facebook and Twitter. Even so, these are still vibrant online discussion forums in Korea today.

As for general search engine optimization, well, there's so much content out there now in the ESL field that I don't know how you'd ever get heard amidst everything else. Ultimately, I think you'll need to reach out to your market; not hope they find you through organic SEO. 


** Visit the related discussion on Korea Business Central: "How Can I Market My Business Online to Korean Consumers?"

Information for Entrepreneurs and Investors about Changes to the Korean D-8 Visa Rules

The D-8 visa has been a good visa for non-Korean investors and entrepreneurs wishing to live and work in Korea over the long-term. 

Basically, since opening a corporation in Korea had previously required W50 million in paid-in capital, non-Koreans setting up such a corporation in Korea who made the investment to set up a corporation had also been able to apply for and receive a visa to live and work in Korea over the long-term. There was a little paperwork involved, but by following the rules, the initial investment burden wasn't excessive. Furthermore, after jumping through the hoops to set things up, as long as the business remained in legal compliance, the visa continued to be renewed, even if the initial investment ended up getting spent on things like living expenses and/or the business did not actually make much money.

Unfortunately, this approach attracted "investments" from non-Koreans (primarily from other Asian countries, I'm told) who would bring in money to set up the corporation in order to get the visa to live in Korea, but without intention of actually running a profitable company. Furthermore, the W50 million bar was so low that not a lot of economic activity was generated by vibrant businesses set up with such small amounts of capital. Not just that, in 2010, the minimum capital amount in Korea for setting up a corporation (both Koreans and non-Koreans) was reduced to just W1 million, making it necessary to separate the visa and capital requirements.

The government increased the FDI required for D-8 visa eligibility to W100 million a few years ago in order to sift out investors that the government perceived were not providing adequate economic value to the nation. Along with that, by meeting the W100 million FDI threshold for the D-8 visa, a businessperson was not required to invest in a corporation; sole-proprietorships and partnerships were permitted, too.

However, things are still changing. At the end of 2012, new rules went into effect requiring all D-8 visa holders to convert their sole-proprietorships into corporations, and any new D-8 visa applications would require the corporate form of business. Perhaps an added benefit of this approach (from the government's view) was that it would be easier to monitor the viability of a business run along corporate lines, than a sole proprietorship or partnership where business and personal fund mixing makes it difficult to analyze objectively. 

Now the government is raising the minimum initial investment amount to W300 million in order to qualify for the D-8 visa, a considerably higher amount than before. As far as I know, this hasn't been announced formally, but based on my discussions with the foreigner ombudsman's office at KOTRA, it's not a rumor. I understand that the new FDI requirements will go into effect in mid-2013. Furthermore, just bringing in the W300 million won't be enough; to maintain visa eligibility, the business will be expected to achieve certain minimum business results, such as in terms of sales.

For sure, the Korean economy is one where small companies struggle and large conglomerates run the show. Some are considering that these new rules reflect a lack of interest by the government in supporting foreign small businesses. However, it seems likely to me that the government is more concerned about closing loopholes that some foreigners have been using to live in Korea under visas that don't reflect the purpose of those visas. The government's decisions are probably helped by a belief that many of these small foreign businesses are not much of a contributor to the Korean economy.

Email Interview with Reporter from the Donga Ilbo Newspaper

I much prefer email interviews to verbal ones; that's because I can keep and post my exact answers here even if the reporter ends up using only bits and pieces of what I provide. This is from an interview with the Donga Ilbo. 

<스티븐씨의 소개>

Q. 동아일보 독자들에게 스티븐씨에 대한 간단한 소개 부탁드립니다.

Q. KBC외에 다른 직업이나 직책이 있다면 알려주세요.

제가 한국에 처음 온지 20년 되어 가는데, 그중 10년 이상 한국에서 살았습니다. 지금은 안산에서 가족이랑 거주하면서 미국 법인인 Korean Consulting & Translation Service, Inc.를 운영하고 있습니다. 개인사업자로 미국법인을 서포트를 해 주는 한국회사도 차렸습니다. 그 이외에는 Korea Business Central을 운영하고 안산에 있는 한양대학교 ERICA캠퍼스에서 경상대학원에서 박사과정을 공부하고 있습니다.

더 자세한 내용은 - 

<KBC에 관하여>

Q. 독자들에게 KBC에 대해 간단히 소개해주세요.

KBC를 시작한 목적은 외국인들이 한국에서, 그리고 한국사람들하고 비즈니스을 잘 하고, 한국회사에서 취직하여 잘 살아남을 수 있기 위한 것입니다.

이 목적을 달성하기 위해서 여러 방법을 동원하고 있는데, 주로 한국 비즈니스에 대한 지식, 토론 및 뉴스 마당을 만들면서, 멤버들의 서로간 네트워킹 기회를 제공하고 있습니다. 그리고 개인의 한국 비즈니스에 대한 지식 및 취직하는 과정에서 자신에 대한 신임을 받을 수 있기 위한 KBC Professional Certification Program (도 작년부터 개발/도입하여 운영하고 있습니다.

Q. 왜 한국과 관련된 사업을 시작 하게 되었습니까?

Q. KBC를 시작하기 전에 한국에 관심이 있거나, 관련이 있었습니까?

제가 한국에서 오래 살고 한국에서 가족도 있고 한국을 사랑하기 때문에, 한국과 인연이 있어서 KBC를 시작한 것은 그리 어려운 결정이 아니였죠.

Q. KBC를 이용하는 외국인과 한국인은 몇 명쯤 됩니까?

한국인 멤버들이 있기는 있는데, KBC의 콘테츠가 주로 영어로 되어 있고, 외국인 대상으로 만들어져 있기 때문에  한국인 멤버들이 KBC에서 그렇게 활발하지 못 한 것 같습니다. 그래도, 한국인의 멤버가입은 언제든지 대환영합니다.

Q. KBC의 큰 도움을 받은 외국인이 있나요? (에피소드가 있다면 알려주세요)

그럼요, 멤버들이 공유한 다음 추천의 글은 있습니다:

그리고, 한 에피소드를 멤버의 말로 알려 드립니다.

I would like to share with you my experiance concerning my recent job search in the Netherlands..

I am a Polish girl that obtained a Master degree in Korean languge in Poland and also studied for one year at the Yonsei Univeristy in Seoul. I`ve worked for more than 6 years in 2 Korean companies in Poland and had various experiance in translating, interepreting, managing many variuos tasks.

To be honest with all this experiance and also my Korean language skills I was sure it would be quite easy to get a job at such an international and opened job market as it is in Amsterdam.  But after some time I realised it was not easy at all. I sent my CV to most of the Korean companies in the Netherlands. I tried to apply for certain positions or ask for internships - maybe half of the companies replied and it was always a negative answer. It seemed that my Korean language skills were not very important. At some point I was almost ready to give up.

However, just then it happened that I contacted KBC Ambassador in the Netherlands Ms. Eun-Shil Boots and mentioned to her about my job-search situation.  She assured me that it is possible to find a job in a Korean company, but just I needed to know how to do it. I agreed with her that Koreans rely on the opinion of others and tend to hire people that are recommended. She mentioned to me that there is a logistic company that is very international and has its branches all over the world and might need someone like me. I changed then my CV, made it more easy to read and understandable for Koreans and she send it to the headquarters of the company in Korea.

To be honest I did not believe it would work, but surprisingly very soon I was invited for an interview and got the job! I was so happy, because it seemed that my Korean language skills got appreciated!

I live 15 minutes away from the company, but  my CV had to travel long way - to Korea and back so that I could get the job!

I would say that it is definitely possible to find a job in a Korean company. Don`t be shy, tell as many Koreans you know that you search for a job and sooner or later you will find a job you like!:)

 Greetings to all memebers!

 Ewa 에바

<아래의 질문들은 '서울에서 외국인이 창업을 하는 것'에 대한 질문입니다. 

가능한 구체적으로 사례들 말씀해주시면 매우 감사하겠습니다.>

Q.서울에 창업을 원하는 외국인을 아십니까? 알고계신 사람들에 대해 간략히 설명해주세요. (ex.업종, 국적, 인원 수, 규모 등) 

한국에서 창업하고 싶은 외국인들이 많습니다. 제가 몇 명을 소개해 드렸는데, 저에게 길고 정리한 리스트가 없습니다. Seoul Global Business Support Center에 문의하시면 이 질문과 관련한 유용한 정보를 아마 많이 입수하실 수 있을 것 같습니다.

Q.서울에 창업을 한 외국인을 아십니까? 알고계신 사람들에 대해 간략히 설명해주세요. (ex.업종, 국적, 인원 수, 규모 등) 

제가 이미 소개해 드린 3명을 이외에 1-2명을 더 인터뷰를 하고 싶으시면, 말씀하세요. 제가 찾아서 소개해 드릴게요.

Q.서울에서 창업에 실패한 외국인을 몇 명 아십니까? 실패한 원인이 무엇입니까? 그들은 다시 시도했습니까?

아마 있겠죠. 그런데, 대부분의 창업하고자 하는 외국인들이 이미 한국에 와 있고 크게 시작하지 않기 때문에, 실패했다 하기보다는 큰 손해없이 그냥 포기하고 자기의 나라로 돌아가든지, 어디서 취직을 하든지 했을 것 같습니다. 구체적으로는 지금 생각이 나는 사례가 없습니다.  

Q.서울에서 외국인이 창업을 할 때, 어려움이 있습니까? (ex.제도적, 문화적, 경제적, 언어적 문제 등) 

제가 보기에는 가장 큰 어려움은 자본금/비자 문제입니다. 많은 외국인들이 자기의 나라에서 할수 있는 것처럼 큰 자본금없이 집에서 혼자서 무엇을 시작하고자 하는데, 한국에서는 자본금이나 풀타임 일자리가 없으면 비자도 못 받기 때문에 천천히 시작하는 방식은 어럽습니다. 대부분의 한국에 오는 외국인들이 아파트 전세금조차도 없는데, 한국 법인을 설립할 1억원에 달하는 자본금까지 모아서 창업하는 것이 그림의 떡이다. 그리고 한국은행은 외국인들에게 신용카드를 주지는 않은데 사업 자본금을 대출하겠습니까?

Q.한류가 외국인의 창업에 영향을 미쳤습니까?

한류덕분에 한국에 와서 창업하거나 취직하고 싶은 외국인이 증가하기는 했을 것입니다. 그런데, 실제로 창업/취직할 능력이 있어서 한국에 와서 취직/청업한 사람은 그정도 늘어나지 않았을 것 같습니다.  

Q.외국의 도시(싱가포르, NY, 도쿄, 베이징 등)와 비교했을 때,

서울의 매력이나 특징이 있습니까? 특히 창업과 관련한 특징입니다. 

저는 그 다른 도시들에서 살아본 적이 없어서 직접적으로 통찰을 공유할 수 없지만, 제가 다른 사람들의 말을 듣고 생각해보니까 서울은 싱가포르나 NY이 외국인들에게 주는 매력을 비교하는 것이 좀 무리한 것 같습니다.  북경이나 도쿄하고 비교 대상이 될수 있습니다. 그래도, 저같이 한국을 사람하는 사람이 아니면, 서울의 특별한 매력이나 특징을 깊숙히 고려하는 외국인들이 많을 것 같지 않습니다.

Q.외국인이 서울에 창업하기 좋은 업종은 무엇입니까? 그 이유는 무엇입니까?

아무래도, 영어와 관련된 업종은 영어권 나라에서 온 사람들에게 가장 유리하겠죠…

Q.외국인이 서울에 창업하기 좋지 않은 업종은 무엇입니까? 그 이유는 무엇입니까?

그거는 모르겠습니다. 아마 한국내 인맥이 필요한 업종은 외국인들에게 불리하겠습니다. 한국에서 비즈니스가 크게 인맥에 의존해서 음직이니까, 보통의 외국사람들이 자신의 회사를 크게 할래면, 다른 나라에 가서 할 수 밖에 없을 것 같습니다.

Q.서울이 '아시아의 실리콘벨리'가 되기위해 어떤 노력이 필요합니까?

어려운 질문입니다. 한국은 “아시아의 실리콘벨리”가 못 될 것 같습니다. 이미 싱가포르나 홍콩은 있는데, 서울이 그렇게 될래면, 엄청많이 변해야 할것입니다. 차라리 한국의 독창적인 매력이나 장점을 제데로 살려서 새로운 입지를 만들어 나가야 할 것 같은데, 그 답은 쉽게 풀리지는 않을 것 입니다. 그런데, 실리콘밸리가 이미 있는데, 서울은 왜 또 다른 시리콘밸리되고 싶어요? 질문의 발상부터는 잘못 됬다고 생각합니다. 

Q.그 외 외국인의 서울 창업에 관해 조언하실 것이 있습니까?

한국은 외국인들에게만 창업하기 어렵지 않습니다. 한국의 SME들도 죽어가는데요… 일부러 외국인들 위해서 창업하기 좋게 하는 것보다 모든 사람들에게 평등한 시장조건을 조성해서 한국인이든 외국인이든 누구나 창업하고 비즈니스를 잘 할 수 있는 환경을 만들었으면 합니다. 서울은 꼭 외국인이 많이 살고 창업해야 살기 좋은 도시가 되는 것이 아니라는 것은 저의 생각입니다.

Build a Business in Korea: "What resources are available on Korea Business Central to help me build a business in Korea and do business with Korean companies?"

The following was extracted from a recent interview with me about how to build a business in a Korean company. 


"What resources are available on Korea Business Central to help me build a business in Korea and do business with Korean companies?"

"I’ve already mentioned the expert interviews we’ve done on Korea Business Central that discuss these key aspects; each of them is a goldmine of valuable and practical information for doing business in Korea. We have a group of experts on KBC ready to answer questions in the community, sometimes at no charge. In addition, many community discussions reference challenges and opportunities of doing business in Korea, and following and participating in these is a great way to raise one’s understanding.

In fact, there’s so much information in the community about doing business in Korea, that we’ve even made things easy by organizing it for you. There’s a page that focuses on Starting and Running a Business in Korea. Another focuses on Korean Business Savvy, and another on Korean Business Networking. Each of these pages brings together the best resources in the community, along with a lot of links to elsewhere on the web, so they should be a frequent point of reference for you in your business endeavors in Korea.

Finally, we offer high-quality professional services, including translation, business interpreting, online marketing and other one-on-one consulting services, as well as formal Korean business culture training in the form of our KBC Professional Certification Program."

Visit Korea Business Central for more information on doing business in Korea, including the full video of this interview. 

Learn more about the KBC Professional Certification Program to be more successful in your career in Korea.

Build a Business in Korea: "Knowing Korea has a reputation for being difficult, what do I need to be "warned about" when it comes to working with vendors, suppliers, and service providers in Korea?"

The following was extracted from a recent interview with me about how to build a business in a Korean company. 


"Knowing Korea has a reputation for being difficult, what do I need to be "warned about" when it comes to working with vendors, suppliers, and service providers in Korea?"

"We’ve covered this at length on KBC too, in particular in our interviews with Peter Bartholomew, Peter Underwood and Tom Coyner (all of which are available for free in the KBC community.)

Perhaps the #1 challenge foreigners face is in the different concept of contracts in Korean business culture. While Korean multinationals operate at global standards, once you get down to the small to medium-sized company levels, you’ll find that agreements often require ongoing attention and interpretation. This is also why business networking is so important and why knowing how to build and maintain business relationships in Korea the right way is a key success factor.

I would also point out that Korean customers frequently have exceptionally high expectations for the speed and quality of service and you should be prepared to provide these in order to compete effectively.

Finally, in the consumer market particularly, there’s a fine line between an interest in foreign products, and a preference for local goods. Therefore, aligning your marketing message to the local market is a crucial step."

Visit Korea Business Central for more information on doing business in Korea, including the full video of this interview.


Learn more about the KBC Professional Certification Program to be more successful in your career in Korea.

Q&A with Korea Herald About KBC and Starting or Running a Business in Korea as a Foreigner

The following is the bulk of the email interview on which much of today's article published in the Korea Herald is based.

1. Based on your years of experience doing business here, how would you assess the level of support that the government (local or federal, your choice) provides for entrepreneurs, particularly for foreigners who set up their own businesses (ie non-MNCs) in Korea? Did you witness a noticeably more aggressive push by the government for aiding entrepreneurs, and when?

I'm not in a great position to comment too much on this because I just set up my Korean business through a local accounting firm here in Ansan. But my main market isn't Koreans and/or people living in Korea, so it would be tough to call myself a local entrepreneur. The Korean company for me is mainly a vehicle for processing funds that come from my US-based translation and consulting services. I'd probably have found the various government services more helpful though if I was actually setting up something new in Korea and for that, as far as I know, before the Seoul Global Business Support Center was established in 2010, there weren't any specific government efforts being made to help foreign entrepreneurs do business in Korea. So, before we started getting the discussion going and collecting resources on KBC in late 2009, I'm not sure there was anything organized and available at all. Today, there's no question that the Korean government (especially at the city level in Seoul and provincial level in Gyeonggi) is trying to encourage entrepreneurship by foreigners.

2. Before you started KBC (and of course, before the Seoul Global Business Centers were launched) what was the foreign entrepreneur community/environment like?

The chambers of commerce from various nations have been around for a long time and they've been important resources for the foreign community. Before say, 2009, I'm not aware of other organizations that existed other than those.

3. Did Korea have a foreigner-business-friendly environment when you first launched your own business (the translation service)?

I should clarify that I don't serve many Korean clients at all; my clients are mainly in North America, with a few more in Europe and elsewhere in Asia. I guess the reason is that my rates are somewhat higher than the standard Korean market rates. I think this is reflected in the level of English translation many Korean companies put on their marketing and other materials, but there doesn't seem to be a focus on high quality in translation. I think this partially reflects a Korean view that translation is a relatively low-level occupation, best suited for people who have lost their "real" job.
Here are a couple links that illustrate this phenomenon: 
As for whether Korea has a foreigner-business-friendly environment, I would say that Korea is generally a particularly difficult place for foreigners to do business. There are cultural reasons for this, but I think language issues also make it very difficult for outsiders to understand and network. Even if they can, the importance of long-term relationships amongs Koreans makes it tough for foreign businesspeople to penetrate business networks in Korea. Further, government regulations have often obstructed the efforts of foreign companies, as well.

It's not just foreign companies that have trouble doing business in Korea though; Korean SME who don't have strong business networks struggle too, and I would say there are a lot of similarities between the difficulties of foreigners and of Korean small business people. Korea's just not a great place for the small business-person of any country.

4. Is KBC itself now profitable (through premium services, etc.)?

Our flagship product is the KBC Professional Certification Program, which we've developed to help foreign business people overcome the challenges of business in Korea mentioned above, has gotten a great reception. We've had over a dozen graduates so far and the graduate class continues to grow. KBC has also been a way for me to serve the community with free services, at the same time that I present my professional language and consulting services to members and visitors from around the world. We are still working on developing additional services that will be valuable for non-Koreans wishing to do business in Korea.

5. You said once that you didn’t expect KBC to grow into what it is now. What were your initial intentions for it then? Why do you think it has picked up so successfully?

My initial idea was to build a community to organically support member networking efforts both online and offline. However, it became clear that the effort was too high and the ROI too low to run things as just a gather place for member to connect and so we've been working hard to provide tools and content that will help members solve their immediate needs for services and knowledge. I would say that the "community" aspect of KBC has been de-emphasized this year while we've focused on the "solutions and tools" aspect.

6. What services do KBC provide that government-provided support, ie the SGBC, do not?

The SGBSC is focused on small-scale foreign entrpreneurs in Seoul. On KBC, we're able to serve a much wider group, including those both in and outside Korea, as well as those looking for jobs and/or working in Korean companies. From the beginning, I have supported the work of the SGBSC and they offer services and have a funded budget that we don't have on KBC, or plan to add. So, there's a lot of opportunity to help fill in the gaps on KBC which aren't easily filled by others.
One issue with the government-provided support is that it's sometimes provided from a Korean-perspective, and from a government perspective. On KBC, we have a lot more freedom from an agenda set by a government official, and we're in a slightly better position to see things from a foreigner perspective rather than Korean perspective of what they think foreigners are interested in.

7. What are your plans for KBC’s expansion?

I would like to add more content, tools and services which solve the interests of our members, which are mainly broken up into three groups: foreigners looking for jobs in Korea, foreigners working in Korean companies both in Korea and overseas, and foreigners wanting to do business with Koreans. One vehicle for that is the Business Accelerator pages, which are are both working to improve now, and add to later.

8. It seems that KBC’s forum threads often turn into discussions that span several months or even years. Do you think this is a pro or a con in terms of content relevance?

I've made a deliberate effort to keep useful discussions around by linking to them in the business accelerator pages. That's because the discussions often have remarkably valuable information and I want that to be available indefinitely. Just letting a discussion die and disappear doesn't seem like a good way to treat the insights which members have taken the time and effort to share.

9. The idea has been discussed on KBC forums that despite its business-pushing initiatives, Korea still lacks an entrepreneur-friendly environment. Do you agree? Do you think this can be remedied somehow, and what are your suggestions?

Korean business culture and the Korean business environment are what they are. Korea's never going to be an easy place for non-Koreans to do business, and the Korean economy is structured around the large business groups. As I mentioned before, it's not just foreigners who are struggling to compete in the local market; Koreans without capital, connections or advanced technology struggle too. These are issues the Korean government is working to solve, but they won't be easy to get past.

10. In a nutshell, what can you suggest for Korea to become more business-friendly for foreigner/expat entrepreneurs living here?

I'm not sure why Korea needs to be friendlier for foreigners that want to open up a small service business. If they can make a go of it, great.. But Korea's not short of restaurants or English institutes. On the other hand, the government is already going to great efforts to attract MNCs having large amounts of capital and advanced technology. It's a competitive environment out there for that and Korea's not achieving the levels of success they'd like. Organizations like GAFIC are helping with this, particularly in helping foreign-invested companies get over red tape issues, and it would seem that further Korean efforts to reduce regulations and free up the market would be beneficial for foreign businesses in Korea.
Do you have any thoughts about favors/benefits/services that foreigners/expats shouldn’t expect from the government? (If the question is confusing, I’m thinking about availability of content in English—whether that is something foreigners should expect or if they should be expected to learn the local language—and want to know if you have any other ideas.)
I don't think foreign expats should expect the Korean government to provide services that aren't going to provide Korea with an ROI on the investment. Translating laws and regulations might be great, but if there aren't enough businesspeople out there to read and take advantage of them, then what benefit is it to Korea? Those companies with the resources to truly make an impact in Korea (versus those who wish they could set up a sole proprietorship without capital and get a free visa out of it) are already paying companies like me to translate the stuff they really need to know.

11. Do you think foreigner-friendly initiatives here are mostly geared toward Western businesspeople, versus those from Asia, Africa, etc.? If so, is that problematic?

I supposed foreigner-friendly initiatives are more geared toward Westerners. It's not just Korea though that does this; since the money's in the West, you'd expect Korean efforts to follow that cash. I'm not sure though that capable Asians and Africans are really at a disadvantage if they can meet the requirements set by the government for business.

I think there's an overestimation among the foreign community of just how much Koreans need them. If someone comes to Korea to do business, they need to be ready to make the sacrifices to achieve success. Korea's not the land of the easy money; it's a great place to do business if one loves the country, makes the effort, holds realistic goals and/or has something unique to offer Korea that can't be found elsewhere.

Build a Business in Korea: "How would I go about forming a corporation and starting a business in Korea?"

The following was extracted from a recent interview with me about how to build a business in a Korean company.


"How would I go about forming a corporation and starting a business in Korea?"

"We’ve actually got an interview on Korea Business Central with Korean accountant Young Ham that explains the nuts and bolts of this very topic. Basically, fees come to around US$1,000 or so if you do it yourself, or a bit more if done through an accounting provider. Setup is just a few days and with a lot of free consulting available to foreign investors from the Korean government, it’s not all that hard.

This is just a quick overview; we’ve got full details on all of this on Korea Business Central, including links to the free resources I’ve mentioned and the interview with Mr. Ham."

 Visit Korea Business Central for more information on doing business in Korea, including the full video of this interview.


Learn more about the KBC Professional Certification Program to be more successful in your career in Korea.

Build a Business in Korea: "Let's say I wanted to start a company in Korea. First of all, what's in demand? What industries offer the greatest chance of success?"

The following was extracted from a recent interview with me about how to build a business in a Korean company.


"Let's say I wanted to start a company in Korea. First of all, what's in demand? What industries offer the greatest chance of success?"

"There are a few approaches you can take. A good number of non-Koreans enter the English instruction market. Others set up companies that cater to the needs of the expat community or internationally-minded Koreans.

Focusing on larger businesses, some of the best opportunities come from providing services to Korean firms, and for that, the key is usually to have globally competitive technology. I’ve worked as a consultant to the Province of Gyeonggi, which is the area that surrounds the Seoul metropolitan area, and there are nearly 1,000 foreign-invested companies in this province alone. On closer observation, it turns out that most are involved in supplying technology-related products and services to the large Korean business groups.

Finally, thanks to the rapidly increasing number of free trade agreements that Korea has signed with the US, the EU and other countries and regions, tariffs are falling in a wide range of industries. Koreans import a lot of food from overseas, as well as raw materials and these also represent opportunities for foreign companies wanting to sell in the Korean market.

We did a case study with Tom Brown, former executive at Homeplus, one of the largest retailers in Korea, and completely foreign owned, and it was fascinating to find out what had worked for them and his suggestions to other companies that are breaking into the Korean market."

Visit Korea Business Central for more information on doing business in Korea, including the full video of this interview.

Learn more about the KBC Professional Certification Program to be more successful in your career in Korea.

Build a Business in Korea: "Why do you think non-Koreans have challenges doing business in Korea with Koreans?"

The following was extracted from a recent interview with me about how to build a business in a Korean company. 


"Why do you think non-Koreans have challenges doing business in Korea with Koreans?"

"There are a lot of reasons for that, and as you’ve mentioned, language and culture are the most obvious. But other factors also conspire to make things difficult.

For example, not all Korean computer systems are set up for non-Korean ID numbers, which can be a problem when handling paperwork.

Also, finding affordable accounting and tax prep resources, legal advice and other professional and consulting services in Korea that are knowledgeable about international business matters and speak English often requires a little extra effort.

Pre-established business networks among Koreans can be difficult to penetrate, which leads to both marketing and supply challenges.

Even things like foreign-investment friendly regulations may be tricky to sort through, not to mention the regulations that aren’t foreigner-friendly and are only accessible in Korean. I recently interviewed a government official about business visas for non-Koreans in Korea and amazingly, he explained to me that the business visa laws are not readily available in English, nor is there an English-language document anywhere that explains them in easy terms in one place. This makes the information I put together for KBC members after that interview all the more valuable."

Visit Korea Business Central for more information on doing business in Korea, including the full video of this interview.



Learn more about the KBC Professional Certification Program to be more successful in your career in Korea.

eBriefing: "Answers to Top Questions about Business Visas in Korea"


Download the Following Weblog Article in PDF eBriefing Format.



3-8-2013 8-55-31 PMJared Muloongo--intern on KBC and job-seeker in Korea--and I are working to figure out some key information about the visa situation in Korea in order to share it with our members on KBC.

Based on the recommendation of my associate General-Secretary Yong-Moon Kim of the Gyeonggi Association of Foreign-Invested Companies, and through a couple people I worked with at InvestKorea last year to put together the KBC interview with Comissioner Hank Ahn, I was able to get in touch with the official from the Korea Immigration Service who is currently dispatched to InvestKorea to advise on visa matters for foreigners investing in Korea.

I visited his office today with a bundle of questions and the following are the answers I was able to get.

What are the visa options for foreigners who want to work in Korea in non-executive positions which are not teaching/ESL positions? (ex: E7, D8, E9, D9…)

To answer the specific visas mentioned in the question:

  • E-7: This is for foreign employees contracted with Korean companies to provide in-house services in Korea. It's the visa best-matched to most entry-level foreigners looking for a white-collar job in Korea.
  • D-8: This visa requires a large investment by a foreigner in Korea.
  • E-9: This is the visa under which laborers from certain countries come to Korea to work in factories in Korea at low wages. 
  • D-9: Foreigners who have a proven record of having achieved a certain degree of Korean exports in a trading business can be eligible for this visa.

Other visas which a foreigner might consider:

  • D-7: A foreigner who has worked for a foreign company or public agency overseas may be dispatched to Korea to work in the Korea branch or subsidiary of their employer and such person would be eligible for this visa.
  • E-1: Persons with an academic background may obtain a professorship and be sponsored by their university with the E-1 visa.
  • E-3: Foreign researchers at Korean research institutions (does not include professors) generally work under the E-3 visa.
  • E-5: Any number of foreign professionals, such as attorneys, doctors and accountants, would generally work in Korea under this visa.
What can you tell me about an E-7 visa? What are some of the requirements for this visa? 

The key point of this visa is that it's for foreigners working in positions in Korean companies which the Korean companies have demonstrated to the satisfaction of the Korea Ministry of Justice cannot be filled suitably by Koreans. (This is the reason most former ESL teachers who have gone from the ESL visa (E-2) to a E-7 visa are still working in language-related tasks.)

What is a D-4 visa for? What kinds of interns get this visa? Is it only at investment companies?

The D-4 visa has a very specific purpose. It's for the foreign local employees of the overseas branches and subsidiaries of Korean companies who wish to bring the foreign workers to Korea for on-the-job training. It is not a visa that can be easily issued under the sponsorship of a Korean company or otherwise to just any foreign intern.

Can you briefly explain what the E-9 visa is for? Who can apply for this visa and what are the requirements to qualify for this visa?  

This visa is for foreign laborers (particularly those from Bangladesh, Pakistan, Vietnam, the Philippines, Indonesia and a few other countries) willing to work long hour in dangerous and dirty conditions for very low wages (currently about W900,000/month is average, or so I've heard). You don't want this visa.

Are these visas country-dependent? For example, are they available only to citizens of certain countries and not to citizens of other countries? (Does this include African countries?) 

As I understand, the E-9 and H-2 visas are available only to persons from countries which have signed agreements with Korea for these visas. The other visas depend on finding a company or organization willing to sponsor, and which can also persuade the Department of Justice that they need the specific foreign employee and will properly take responsibility for that person. Also, as Korean companies now have to pay into four kinds of national insurance/workers compensation plans even for foreign workers, this can also be a significant burden, both in terms of costs and paperwork hassle.

How long does it take a candidate in Africa to have their visa procesed? What are some of the best places to have your visa processed quickly and efficiently?

I don't know, but the official at InvestKorea did say that the visa issuance isn't a country-based thing. No doubt, citizens of certain countries will have an easier time of it, but there aren't specific regulations that would affect this.

If a company states that an individual they are hiring must get their own visa, what recommendations would you make to the individual? How can they get a visa without sponsorship?  What visas would you recommend for people coming to do business in Korea, especially if they want to invest but are below the $200,000 dollar mark?  

Certain visas are available without a company sponsorship, don't require a ridiculously high investment or export record and allow the foreigner to work in Korea. They include the following.

  • D-10: Foreign graduates of Korean universities may be awarded this visa for 6-12 months, which allows them to stay in the country to look for work. In fact, it's called a "Get a Job" visa. This visa does not allow the individual to work though.
  • F-2: Those who are able to jump through lots of hoops and pass the points system may be awarded an F-2 residents visa. F-2 visa-holders may work in Korea.
  • F-6: Foreigners married to a Korean get this visa and they can work too.
  • F-5: This is the visa for permanent residents who have fulfilled various long-term residence and other conditions, and these persons can work, also.
  • G-1: This catch-all visa only requires the foreigner to convince the Ministry of Justice to give it to them. It appears to be intended for special situations.
  • H-2: This visa covers a very wide range of work roles and based on this document which I downloaded from the Ministry of Government Legislation's website, it appears to be similar to the E-9 visa in that it helps Korean manufactures get low cost manpower. Online articles indicate that these visa-holders are only from a few countries which have signed certain agreements with Korea.
What are the process and minimum requirements for a Korean company to sponsor a foreign employee?  What conditions must the foreign employee meet in order to get a work visa? Can an individual ever sponsor the visa of another foreigner without being family? Is there a way to work legally as an intern in Korea without having one’s visa sponsored by the interning company? Are there any loopholes that would legally allow someone to work in Korea without having a business visa?

There don't appear to be formal minimum requirements for a sponsor, but the company has to find a way to persuade the Ministry of Justice that the visa is warranted and that the company will take full responsibility for the employee. Apparently the representative of the company must take personal liability for the foreign employee.

I asked if I, as a foreigner with a non-corporation company in Korea, would be able to sponsor a foreign employee. The official said that, in theory, it's permitted, but that it would be very hard to persuade the Ministry of Justice to award one in this case. So basically, the visa sponsorship process is just a matter of persuading the government that it's necessary but there aren't formal conditions; in some cases it's easier than in others.

The only way to work legally in Korea without a sponsored work visa is to get one of the non-company-sponsored visas mentioned above.

Can you explain about the visa points system?

I found this PDF online which explains it.

What can a business visa applicant do to speed up the visa process? What professonal support services are available/helpful for getting through the visa process?

The fastest way to get through is to prepare the paperwork and submit it properly. The official told me that Korea doesn't have attorneys specializing in immigration work; I guess there's just not that much work to warrant it and the Korean system appears to be a little more approachable than the US immigration, which is a black box. Most visa information is available at Hi Korea. Foreigners should also be able to get free help from offices like the Seoul Global Center (which I believe has a free hotline for questions).

I asked if there was a document which explains all this in one place (including a comprehensive list) and in English and the official said there isn't. He did give me a Korean-language print-out listing all the visas and their summaries which he said don't exist in English, and much of the information provided in this article is based on that document, in addition to my discussions with the official.

If your visa application is rejected, can you apply for another visa type? If your visa is rejected for not having the correct documentation, can you reapply or is there a specific waiting period? 

I didn't specifically ask these questions, but based on what I learned, I would say that the Korean system is quite flexible, with discretion for the government officials, and doesn't automatically lock people out for set periods of time. However, if one is rejected once and then applies again without improving the application, the officials will notice the previous record and are unlikely to award the visa the second time, either.


Thus, in terms of recommendations for a foreign entry-level job-seeker in Korea who doesn't have the option of ESL teaching, or other short-cuts (such as marrying a Korean), here are what I've come up with as options.

  • D-2 (Foreign Student) - I've learned that Korean universities help their students (including foreign students) get internships and jobs, and that a D-10 visa (which would be awarded after graduation) would give the graduate up to a year to find a position.
  • D-7 (Korea Dispatched Employee) - Persons working for a company or organization with operations in Korea could get transferred to Korea after a time.
  • B-2 (Tourist) - Come to Korea and look for a job through intense networking and research... and hope for the best.
Other than these, there's the E-7 visa which can, in theory, be obtained from abroad. But without coming to Korea first, it'll be hard to find a job and compete in the application process with others who are already in-country. In addition, the company still has to persuade the Korean Ministry of Justice that the prospective candidate brings skills/expertise that they can't find from the tens of thousands of Korean graduates who also can't currently find a job, and it's really not reasonable to ask a Korean company to make this case to the Department of Justice for an entry-level job applicant whom they haven't met before.

Korea Business Advisor (Seoul Magazine) - Supplement to the Article "Three Ways Contracts in Korea Are Different"

P1060515In my latest column for Seoul Magazine's March 2012 issue, I discuss the different perspective from which contracts in Korea are written. For more insights on Korean business practices, including contracts and other legal agreements, check out the links below.

I Was Quoted in the Korea JungAng Daily About Entrepreneurs in Korea

Here's what I said in an article in the JungAng Daily on July 21, 2011 about foreign entrepreneurs in Korea:

“Most foreign entrepreneurs are setting up businesses that support the international community. There aren’t many who are doing business in Korean society and serving Korean consumers,” said Steven Bammel, founder and head administrator of Korea Business Central, an online community supporting expats doing business in Korea. 

“Even companies investing in Korea through FDI are generally setting up operations to support the chaebol, so aside from the foreign community and chaebol, there don’t seem to be many foreign companies doing business directly with the majority of Korean consumers.”

Link to original article.

Download Expats blaze new trails in business in PDF format

This article is also featured on Korea Business Central with accompanying member discussion.

A Recap of Tom Coyner’s Exclusive Interview on Korea Business Central – “Marketing to the Korean Consumer and Advertising/PR in the Korean Market”

Author_book_03 Tom Coyner is the president of Soft Landing Consulting. He has twenty-five years of experience in Japan and Korean working for American firms, as well as seven years working for Japanese companies in the US, and he is co-chair of the American Chamber of Commerce in Korea’s SME Committee and Senior Commerical Advisor for Joowon Attorneys at Law in Seoul. Author of Doing Business in Korea, Tom is recognized as a leader in assisting foreign companies wishing to do business in Korea and his book is available online from Seoul Selection.

To listen to the interview, download the .mp3, subscribe on iTunes, read the transcript and/or discuss this interview and this topic with other members of Korea Business Central, visit the following discussion link:

The full list of interviews in the Korea Business Interview Series is maintained here:


Main Points of the Interview

Topic #1 – Understanding the Korean Consumer

  • Korean consumers can be surprisingly demanding. One reason this came about is that Korean providers used to make up for inferior service by offering exceptional follow-up service. Today, Korean quality has improved, but immediate after-sales support is still provided. Foreign companies often fail in the area of customer service.
  • To succeed in the Korean market, foreign companies need to be competitively different than local companies, and do so in a way that local companies cannot easily emulate, such as by reputation or advanced functionality or engineering.
  • Koreans in their late 20s and early 30s often havve the highest disposable income in Korea, particularly since many are getting married relatively late and still living with parents until marriage. These people are very Internet-connected and fads and fashions change very rapidly, with word-of-mouth over the Internet driving consumer trends.
  • The iPhone is a good example of a foreign product that has succeeded in Korea by being different and better. The mainstream media, headily dependent on advertising from Korean producers, predicted that the iPhone wouldn’t meet the needs of consumers in Korea. But the young, affluent demographic didn't get its news from the mass media, but through the Internet and was ready for the iPhone
  • Korean women – often, housewives – control the family budget and their influence on family buying decisions cannot be ignored.
  • Koreans today are relatively free spenders and make buying decisions based on getting ahead – or at least, not falling behind – socially. Koreans will spend based on social pressures, at least as much as based on functionality.
  •  A key advertising theme for the Korean market is:  "This is the good life, this is what modern Korea is all about. You should participate in it like everyone else, so don't be left behind because everyone else is moving forward."

Topic #2 – Experiences of Foreign Companies in the Korean Market

  • A key question that determines whether a foreign companies is successful in Korea: “Does home office give the expatriates working in Korea the authority and means to adapt their products and services to the Korean market?”
  • One company that failed to answer the above question adequately was Carrefour; one that has been very successful is Tesco and their Homeplus brands, which they’ve done, in part, by posting very few expatriates in their Korea operation and relying on top local talent. This has allowed them to adapt thoroughly to the Korean market.
  •   The Korean market has, over the last 10-15 years, become very consumer driven, what Coyner refers to as “The tail wags the dog”. The days of limited consumer choice are long gone.

Topic #3 – Marketing Strategy and Market Entry in Korea

  • Korea is less risky than a number of other truly Asian markets. “Truly Asian” means those markets without a legacy of being British or American colonies.
  • Korea is a country ruled by law and the court system is reasonably consistent and fair. The probems lie with the laws themselves, which are often contradictory, but it’s not like China where contracts may be unenforceable.
  • It is relatively easy to invest in Korea, and to repatriate profits.
  • There are a lot of English-speaking business professionals and most market opportunities and resources are centralized around Seoul.
  • Korea is a good place to learn how to do business in Asia, before going into China or Japan. If you cannot succeed in Korea, you’re probably not going to succeed in China or Japan, either.
  • One challenge of business in Korea is the mindset, “Well, we don’t do this in Korea” as a catch-all for opposing a foreign approach. This retort needs to be taken with a grain of salt and not as a blanket reason not to do something different, which may in fact be an opportunity. You’ve got to do your homework in the Korean market and it takes maturity to know when to take risks in the Korean market.

Topic #4 – Advertising and PR in the Korean Market

  • The selection of advertising media depends a great deal in Korea, as elsewhere, on the product and demographic. Don’t overlook the power of Internet advertising though for many products and demographics since even Koreans in their 40s, 50s and 60s really do make purchasing decisions based on what they see on their PC screens or cell phones.
  • When selecting a local Korean advertising company, make sure your account manager isn’t just the best English-speaker person on-staff; insist on someone who’s more mature and has credentials with publishers and editors.

Closing Thoughts

  • Two reactions when people first come into the Korean market for the first time: 1) “I had no idea that Korea is so developed” and 2) “Compared to other markets, consumers are much more acctive and consuming a lot more.”

A Recap of Young Ham's Exclusive Interview on Korea Business Central - "The Nuts and Bolts of Setting Up and Running a Company in Korea"

Author_yhYoung Ham is a founding and managing partner of Hanmi Accounting Corporation in Seoul, where  he leads the Global Services Division for foreign clients worldwide. He was the ninth interview in the ongoing Korea Business Interview Series at

To listen to the interview, download the .mp3, subscribe on iTunes, read the transcript and/or discuss his interview and this topic with members of Korea Business Central (you might even get a direct response from Young!), visit the following discussion link:

(The full list of interviews in the Korea Business Interview Series he kept here:

Main Points of the Interview:

Topic #1 - Current Situation Regarding Foreign Companies Entering the Korean Market

  • There are about 3,000 FDI cases reported every year in Korea and of those, about 30% involve new companies being set up in Korea.
  • There are almost 100X as many FDI investments to Korea of less than $1 million, then of $100 millions or more. But in the current economy, multinational companies are increasing their investments, while small to medium-sized ones are reducing them.
  • Approximately 2/3 of FDI cases are from Asia (mostly Japan, in terms of dollar values), with about 1/6 from the US and 1/6 from Europe (mostly Gmany and the UK).
  • By industry, manufacturing accounts (mostly electronics and machinery) for 15% of total FDI, with about 80% in the service industry (mostly wholesale and retail)
  • The key to getting special incentives or benefits in the Korea market is to have a business that improves the competitiveness of Korean industry. For example, for high tech businesses, tax incentives can run up to to five- and seven-year tax exemptions on corporate income tax, and also include free land for a factory, as well as cash grants for employment.
  • There are currently 16 complex-type foreign investment zones in Korea for attracting foreign capital to specific locations in Korea.
  • Korean tax rates and incentives compare favorably to places like Hong Kong and Singapore. And efficiency and the general environment of Korea are much superior to China.
  • The Korean government also provides help desks for foreign companies to help them with paperwork in setting up a business, as well as to help with employee training and arbitration expenses.
  • The maximum tax rate for expatriates in Korea is 16.5%.
  • Green businesses are currently the most open in Korea to foreign companies. Parts and materials industries to help Korean automakers and others source local products rather than purchase from outside, such as Japan, are also welcomed.

Topic #2 - Setting Up and Running a Company in Korea

  • The Korean Commercial Code is the law that regulates the opening and running of a company in Korea. This is supplemented by the Foreign Investment Promotion Act (FIPA), which promotes foreign direct investment.
  • Foreigners establishing a company in Korea must report the incorporation to the designated bank under FIPA for getting special incentives. Otherwise, the process of setting up a company in Korea by a foreigner is the same as for a Korean.
  • Setting up a basic corporation (capital of $45,000) involves about $700 in taxes and government fees. Using a professional incorporation service provider normally adds another $400 or so. Running costs for a virtual company come to around $3,000/year, which doesn't include office rent and employee salaries, etc.
  • KOTRA runs a help desk to provide assistance in this area; another good resource is
  • Setting up a company takes two or three days. Then reporting under FIPA adds another 2-3 days.
  • There are several types of businesses which can be set up. A liaison office isn't taxed in Korea at all, but it cannot engage in any sales. A branch is taxed only on its Korean income, whereas a subsidiary is taxes on global income because it is regarded as a global company. A subsidiary also faces double-taxation issues when remitting profits to the parent company.
  • Foreign investment is not allowed in the defense, broadcasting, nuclear energy and telecommunications businesses. Others, such as finance, asset management, construction and import of motor vehicles, require government license or permission to set up.
  • For tax reporting, payroll tax return is filed monthly, a value-added tax return is filed quarterly and a corporate income tax return is filed semi-annually.
  • The Korean accounting system is being harmonized with international standards and this takes a big burden off of companies doing business in Korea.
  • As for social insurance programs, the national pension is 9% of gross income, with half paid by the employer and half by the employee. Medical insurance is 5.6%, with the same employer/employee breakdown. Workers compensation is 1.3% (half/half), and there are also national unemployment insurance liabilities.
  • Employers can fire employees with 30-day notice with cause. Maternity leave is three months, where two months are paid by the company and one month by the government. The employee must be accepted back to the equivalent position.
  • Severance pay comes to one month full pay of severance for every year the employee worked.

Topic #3 - Success Factors in the Korean Market

  • Foreign companies must make sure to do enough preparation in market research and information gathering rather than expect to be able to do what they did back home. Otherwise, they may spend their initial capital and get discouraged before getting results.
  • According to KOTRA, the biggest success factor in Korean market entry is communication by transparent management. 
  • In terms of accounting, it is important to choose the right accounting firms to match ones needs. Certain tasks need to be done by the big four, but others can be handled much more cheaply through smaller accounting firms.


About the Gyeonggi Association of Foreign-Invested Companies and My Role As Advisor

Following my designation in February as a Gyeonggi Province FDI Advisor (For more information: Post #1, Post #2, Post #3), I was invited to become an advisor to the Gyeonggi Association of Foreign-Invested Companies, too. This organization, based out of Pyeongtaek in south Gyeonggi, is funded by the Gyeonggi Province government, member company dues and fee-based services. Its purpose is to provide support to the foreign-invested companies of Gyeonggi Province and it is an honor for me to serve as an advisor to the Association. 

Here is a copy of the Letter of Commission which I was awarded at the directors' meeting:


The directors' meeting was held at the Ramada Plaza Hotel in Suweon but I had travelled down to Pyeongtaek a couple weeks before on March 24 in order to meet Secretary General Jake Kim at the GAFIC office to find out directly from him about the work of the Association. Here are some of the notable facts I learned in my meeting with him.

  • There are something like 800 foreign-invested companies with a presence in GyeongGi Province. Of these, roughly 1/3 are Japanese, 1/3 American and 1/3 European-invested.
  • When I asked why the GAFIC website has not been translated to English, Secretary General Kim explained to me that even though the member companies are foreign-owned, most are run by Korean management teams. 
  • Even though most member companies are managed by Koreans, there are still a number of Korean production sites which have foreign heads and the Association offers Korean lessons, Korean culture field trips and other services from time-to-time to these non-Koreans staff.
  • The Association provides services to GyeongGi Province-based foreign-invested companies regardless of their membership status with the Association. Many of these services are free and often involve interfacing with the Provincial Government bureaucracy to resolve issues unique to foreign-invested companies.
  • There are a half-dozen or so industrial complexes designated for foreign-invested companies in Gyeonggi Province and they are mostly concentrated in the southern region near Pyeongtaek, which explains why the GAFIC office is located there, too.
  • The federal and provincial governments offer a number of incentives to foreign-invested companies that set up a manufacturing presence in these designated industrial complexes. To qualify as a foreign-invested company requires foreign ownership of 10% or more (which was a lot less than I would have expected).
  • The vast majority of the foreign-invested companies in Gyeonggi Province are suppliers to the Korean chaebol, such the automobile factories of Hyundai/Kia, the LCD display production of LG and the semiconductor operations of Samsung. Very few (if any!) of these companies are selling directly to Korean consumers or non-chaebol companies.
  • I found it interesting to learn that once the US-Korea Free Trade Agreement (KORUS) is passed, Gyeonggi Province is expecting an influx of Chinese-owned companies. This is in order for them to take advantage of tariff loopholes in KORUS. Currently, there are very few, if any, Chinese companies of note in Gyeonggi Province.

The Directors' meeting which I attended on April 7 was actually three meetings in a row. I had not realized this in advance, but I learned a lot of helpful information about business in Gyeonggi Province by sitting through the entire four-hour event.

  1. The first meeting was held to sign an MOU between GAFIC and the Ramada Plaza Hotel agreeing to special rates and conditions for GAFIC members. The Ramada Plaza Hotel is the only five-star hotel in Gyeonggi Province and I got the feeling even non-members, if introduced through GAFIC (or me!), could get those discounts on a case-by-case basis.
  2. We then met with representatives of Invest KOREA, which is the agency under KOTRA charged with promoting foreign investment into Korea as a whole. Several GAFIC members were in attendance, asking for help from the Invest KOREA representatives in solving issues unique to foreign-invested companies. One of the main issues what what a foreign-invested company should do with its facilities when it wished to withdraw from Korea; if those facilities were not easily movable off of the zones designated only for foreign-invested companies, then they could not often find a buyer.
  3. Next, over a catered dinner by the hotel, the directors and advisors of GAFIC discussed ways to assist the foreign-invested companies in Korea. 
  4. Finally, we got a tour of the Ramada Plaza Hotel. (Click here for photos of the suite where Former US Vice-President Al Gore stayed last year when he attended a conference on the environment in Gyeonggi Province.)

Secretary General Kim and the GAFIC team are ready to help. If you want information about GAFIC, you can reach the team through the GAFIC website. Or if you wish to do things in a bit more Korean way, contact me and I would be glad to introduce you directly.

How I Ordered 200 English/Korean Double-Sided, Full-Color Business Cards in Korea for About $12, Including Two-Day Shipping

The following instructions are prepared so that almost anyone can order, even without being able to read or type in Korean. However, a small amount of Korean typing ability is necessary for entering the mailing address.

1. I had my designer Catalin Soreanu prepare a two-page PDF of my business card (dimensions: 92mm x 52mm) with one page in English and one in Korean.

2. I opened Internet Explorer because other browsers don't work in Korea for e-commerce.

3. I went to  

4. I select the following graphic that says “파일주문명함” (actual graphic may be changed later).

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5. I selected these options.

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6.  I then clicked this button.

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7.  I filled in the next screen as follows (though when I got to the address section, I had to follow the sub-process shown below this graphic).

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 7a. In the address lookup above, the following pop-up window appeared.

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7b. I entered the "dong (동)" in which I live and clicked "찾기".

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7c.  I got a list of choices.

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I clicked the one that corresponds to where I want the cards delivered and then returned to the main form to enter the rest of my address.

8. After finishing the large form above and clicking "확인", the following screen was shown to me:

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9.  I then sent the amount shown in the blue box above to the bank account shown in the red box. I was sure to send from the bank account owned by the person I indicated in the form previously (which was me). I did it online but I could have sent payment by visiting the bank.

10. At any time I can check the status of my order by clicking "배송조회" on the home page:

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On the next screen, I need to click the "파일주문명함" tab to find my name in the list, along with the order status:

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A Summary of Peter Underwood's Interview on Korea Business Central

Peter Underwood, long-time business consultant in Seoul and partner at IRC, was the fifth interviewee in our Korea Business Interview Series hosted at

Visit to listen to the interview online, download the .mp3, read the transcript AND/OR participate in the lively discussion at

4-8-2010 6-12-43 AM  (The full list of interviews in the Korea Business Interview Series can be found here:

Main points of the interview:

Topic #1 - Dramatic Development of the Modern Korean Economy

  • Over the last 50 years, Korea has progressed from dire poverty to become the 13th largest economy in the world.
  • Koreans used to view themselves as inferior to most of the world and lived frugally. Today they are confident in themselves and enjoy affluence. Koreans today are open and global minded.

Topic #2 - Factors of Success in the Korean Market

  • The Korean market is certainly unique and Koreans communicate with each other in a kind of "code" due to their homogeneity. Foreign companies must do their homework and learn to communicate to Koreans appropriately.
  • A key component of Korean business success is investing in relationships by mixing business with pleasure.
  • In spite of the reputation of Korea, there are more foreign companies which are successful in Korea than those that fail. These include: McDonald's, Starbucks, Tesco, Citibank, Kimberly-Clark, Bosch, Siemens, Prudential, MetLife, ING and many others.
  • One client of IRC, Ehrlich and Balzers of Lichtenstein, launched into the Korean market at the peak of the Asian financial crisis of 1997-1998 but have still grown successfully every quarter since then and the Korean market is one of their most profitable in the world.
  • Another IRC client bought up a Korean competitor and used the Korean production base to then penetrate the Chinese market.
  • To be successful in the Korean market, one must have a long-term vision, a credible Korean partner and a compelling product or service offering.
  • Many companies that fail in the Korean market blame cultural factors when the real problem was in the execution of basic business fundamentals.

Topic #3- IRC's Work with the US State of Georgia

  • IRC has worked with Georgia to attract Korean investment to the US and this culminated in the Kia automotive plan in Westport, Georgia, which opened last month.

Topic #4 - Challenges that Must Be Addressed in Korean Business

  • Koreans do not view contracts in the same legalistic way that Westerners do. The legal framework is often secondary to the social framework.
  • Accounting and taxation are a challenge because the Korean accounting practices different in many ways from Western ones.
  • Market barriers in Korea come in various forms. Oftentimes, this is to give Korean companies a chance to develop their own capabilities before foreign companies can enter the Korean market. As another example, data processing requirements or testing regulations may add extra costs to the products and services of foreign companies.
  • Overcoming these hurdles can often be achieved by making one's organization look and act Korean. Sometimes getting to know and persuading the regulators can help.
  • Corruption in Korea has dropped dramatically, but has not been eliminated. Still, many foreign companies have been successful by doing business honestly (and wisely, through relationship building).

Topic #5 - Case Studies in Korean Business

  • Tesco and Carrefour both entered the Korean discount store market. Tesco teamed up with a strong Korean partner and localized their senior management; they were successful. Carrefour stuck with a French-centric team and failed.
  • The anti-US beef demonstrations in 2008 in Korea were primarily caused by a failure to manage the perception by the Korean public that they were being fed dangerous beef. The lesson here is that it is important to act and address concerns like this quickly before they get out of control. Another example is the US military's late response to an accident which ended up in mass demonstrations in 2002; another one later was dealt with appropriately and the uproar went away quickly. We even see that Toyota made this same mistake in the US market recently.
  • US automakers have had difficulty entering the Korean market, in part because of a lack of suitable luxury brands. These are the brands wealthy Koreans (i.e. the ones willing to buy foreign cars) want to buy. Korean cars tend to have more bells and whistles than US cars and are better matched to city driving.
  • The following markets are considered sensitive and difficult for foreign companies to enter. However, it would be premature to say that in a country like Korea, which changes fast, these will remain as such indefinitely: rice, education, childcare

Topic #6 - Foreign Direct Investment into Korea

  • There was very little foreign direct investment into Korea until the Asian financial crisis of 1997-1998.
  • But the Korean government needs to change its approach to FDI to recognize benefits beyond attracting capital, such as skills, technology and employment.
  • Incentives to attract foreign investment should be offered to any company, even Korean ones, that invest.
  • Korean government funds for new strategic sectors can be a unique opportunity for non-Korean companies to crack the Korean market. However, the Korean government needs to make the market more accessible and avoid market distortions, such as channeling funds into inefficient areas.

Topic #7 - Final Advice to Foreign Companies Looking to Do Business in Korea

  • Make use of resources available, such as IRC, Korea Business Central, chambers of commerce, embassies, Korean organizations such as Invest Korea and KOTRA.
  • Foreign companies must take responsibility to fully understand the Korean market and get involved.

Mastering Business in Korea with Tom Coyner

This was an exciting week at Korea Business Central (, where we hosted the first interview in our Korea Business Interview Series. Tom Coyner, author of Mastering Business in Korea, was kind enough to give us some of his time and wisdom. 

Here are the links to the interview:

Part 1

Part 2

Each half of the interview is exactly 18:40 in length.

To purchase the book, click here to visit Seoul Selection.

And to join the discussion about the interview, visit Korea Business Central at

The main points of the interview:

  1. Korea is an interesting place to do business because it is a dynamic newly emerged developed economy.
  2. Opportunities in Korea are largely concentrated in one city: Seoul. This leads to some interesting challenges, such as customer expectations of extra quick support.
  3. Many Korean professionals have studied and lived overseas so command of the Korean language is not as important in Korean business as learning Chinese or Japanese are to doing long-term business in China or Japan. 
  4. Westerners should make more up-front investments of time and energy to cultivate personal relationships before rushing into business. This is even more true in Korea than in Japan.
  5. Koreans are open to doing business with foreigners, especially when it will make them more competitive in international markets. Korea is incredibly competitive and some care should be taken about what information is shared.
  6. Koreans believe their country is a great place to do business internationally and many foreign companies are finding this to be the case, even more so than China sometimes.
  7. Korea is going green and non-Korean companies that have green technologies should be looking at Korea as a potential market.
  8. Lawyers perpetrate the myth that doing business in Korea is difficult and expensive, blaming labor inflexibility and the lack of transparency. Attorneys bill more hours than necessary. These issues can often be avoided by managing in a way that preempts problems. XX
  9. If looking for a job in Korea, the most important thing is to get one's feet on the ground and meet people. It's all about the relationships.
  10. Korea deserves credit for both its economic progress, as well as its transformation into a democratic society, in such a short time.
  11. Koreans are the Irish of the orient, meaning they are open, emotional, religious and family-oriented.
  12. "Predominant Korean thinking" can be summed up in catchwords that represent notable aspects of the Korean psyche. One word is kibun, which expresses the sensing, feeling, emotional side of Koreans. Nunchi is the ability Koreans have to ascertain the kibun of another person.
  13. To get along with Koreans, be open about yourself on a personal level.
  14. The Eleventh (and most important) Commandment for doing business in Korea: "As a foreigner, if you've done your homework and are prepared, you don't have to worry about doing a perfect job on the first ten commandments."
  15. Think in the mid- to long-term when entering the Korean market. You can't do business in Korea on an opportunistic basis.