Most foreign firms unhappy with local investment climate
Published : 2014-01-13 14:11
Updated : 2014-01-13 14:11
More than half of foreign companies operating in South Korea are dissatisfied with the country's investment environment due to a volatile economy and lack of policy consistency, a poll showed Monday.
The same poll showed that there were more firms that anticipated a decrease in foreign investment this year than those that expected an increase.
According to the recent poll of 201 foreign companies by the Korea Chamber of Commerce and Industry, 55 percent of the respondents said that the local investment climate was unfavorable.
A lack of policy consistency was cited as the biggest reason. Other key causes included factors contributing to economic volatility, excessive regulation, tense relations with labor unions and negative public sentiment toward conglomerates.
Some 53 percent said business-related government legislations would have negative impact, with 49.8 percent saying they would consider scaling back their investments should the regulations toughen.
The most burdensome legislation cited by the foreign firms was the revision to ordinary wage calculations and reduction of working hours.
In mid-December, the country's top court ruled that regular bonuses paid to employees should be counted as ordinary wages, which is used as a basis for sundry allowances like overtime pay, holiday shift pay and paid annual leave.
Tax-related laws and restrictions to the number of business days for retailers were also cited as hurdles.
Those who gave positive views on the local investment climate said industrial competence, skilled laborers and easier path to entering the Chinese market are good catalysts for more foreign investment. (Yonhap News)