Foreign-invested firms say technical regulations along with fair trade and labor laws are some of the biggest management challenges, the Korea Chamber of Commerce and Industry said on Wednesday.
Nearly 1 in 2 foreign-invested firms based in South Korea said technical regulations such as certification, tests and inspection were the biggest challenge facing their business, according to a survey conducted by the KCCI with 252 foreign-invested companies.
Technical regulations refer to administrative requirements designed to test safety and quality of products.
Nearly 1 in 5 firms said the country’s commercial and fair trade laws were one of the biggest challenges while others cited rigid labor laws and the Personal Information Protection Act.
For instance, one foreign-invested company seeking to launch a fashion brand store in Korea has asked to ease the certification process after finding out a decision to ship lighting equipment for its physical store could cost up to billions of won during the certification process, the KCCI said.
As the lights are not sold in the country, they are subject to local technical regulations.
Over 1 in 2 foreign-invested firms said they have invested in Korea to enter the local market, while 15.5 percent said they see Korea as a strategic point to branch out into neighboring markets.
When asked about the business conditions in the country, 60 percent responded positively. A similar number of firms also said they believed the conditions will remain similar in the future, while over 29 percent were hopeful for an improvement. Some 7 percent said the conditions could get worse.
On growing US-China tensions, over 8 in 10 companies said they have not been affected. The figure was higher among EU companies -- 90.4 percent-- compared to Chinese and US firms, 73.3 and 68.8 percent respectively.
Citing government data, the KCCI said that investment from EU companies in the country saw a 173.2 percent year-on-year increase during the third quarter. Investment from US was up 8.6 percent while investment from Chinese companies was down 15.2 percent.
Nearly 1 in 2 foreign-invested companies said they want the South Korean government to ease regulations while 23.4 percent want the government to ease immigration rules, such as COVID-19 quarantine requirements.
By Yim Hyun-su (email@example.com