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Once a foreign firm decides that the Korean market holds substantial opportunity, it is likely to consider setting up an office there.
Before jumping into this process, the firm's officers should get the answers to some basic questions, according to a report by U.S. commercial specialists in Seoul, such as: Do Korean laws and regulations allow my company to conduct business and set up an office in the country? How do we find an office site? What application documents do we need and where do we submit them? How do we find employees to staff the office?
Although the complexity of an investment in Korea, and the regulations governing setting up a business office there, vary according to the size of the investment and its industry sector, there are "basic and general" steps that apply to most businesses and investors. The report, which is summarized below, describes five steps involved in setting up an office in Korea and identifies sources that can provide help to foreign firms before and during the process.
The first step for a foreign company is to assess its ability to conduct business in Korea.
Step 1: Assess Your Ability To Do Business in Korea
While foreign firms in most business sectors are allowed to set up an office in Korea and conduct business activities there, some sectors are completely "off limits" to foreign investment (such as medical care insurance, newspaper publishing, and television broadcasting), and others have been only partially or conditionally liberalized (such as wire broadcasting, golf course operation, and guard and other security services).
As of February 1 this year, the majority of the 1,148 lines of business classified under the Korea Standard Industrial Classification system have been fully liberalized. However, 27 are completely closed to foreign investment, and 26 are partially or conditionally liberalized. Since the Ministry of Finance and Economy continually revises its negative list of prohibited or restricted areas of investment, the best way to find out about the current status of your business activity is to contact the Investing in Korea Service Center.
The Center (formerly, the Comprehensive Center for Foreign Investment) is under the auspices of the Ministry of Trade, Industry and Energy. It can provide general counseling to help your company...