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KOTRA Announces the Result of 2017 Interviews of Foreign Businessmen on Doing Business in Korea

Satisfaction with Korea’s business environment slightly improved, while satisfaction with its living environment roughly remained the same YoY
The respondents’ FIEs plan to hire around 9,000 employees in the next three years

A survey of foreign businessmen working for foreign-invested enterprises (FIEs) in Korea revealed that their satisfaction with Korea’s business environment improved, while their satisfaction with its living environment roughly remained the same.

The Korea Trade-Investment Promotion Agency (KOTRA; Acting President: Lee Tae-Sik) conducted a survey on the business environment and living environment faced by FIEs, which form a crucial pillar in the global job market and economy to identify the difficulties they experience. KOTRA announced the result on the 20th. For the survey, around 300 foreign officers and employees of FIEs in Korea were interviewed from last September to this January. In particular, the 2017 survey focused on the employment sector, asking respondents questions on the employment demand and approaches of the FIEs that they are affiliated with. The 2017 survey is the fifth installment of the program, which was launched in 2008. Starting in 2013, the survey is conducted every two years.

The result shows that 27.3% and 62.75% of the respondents reported satisfaction with the business environment and the living environment, respectively. The percentage increased by 1.9 percentage point and 0.5 percentage point, respectively, YoY. By area, the percentages of people satisfied with the residential environment (69.3%) and the traffic environment (61.8%) increased by 24.7 percentage point and 17.7 percentage point from 2015, recording the highest rate of increase among the eight areas of the survey.

In particular, with regard to job creation, the findings show that the 311 FIEs surveyed plan to hire around 9,000 employees for the next three years, with high demands for workers both in the sales/marketing sector and the manufacturing/production sector. For the question on the most needed HR support from the government, respondents mentioned wage subsidies and taxation support (29.6%), supply of expert workers (19.9%), reforms related to labor relations (18.3%), and workforce training/development (12.5%). In addition, many respondents reported experiencing difficulties in securing experts such as researchers.

As for the labor environment, the respondents listed high labor costs (30.2%) and labor shortage (26.0%) as two of the major difficulties in the area, while the percentage of respondents who reported difficulty with employee dismissal (14.8%) and workers’ foreign language ability (9.3%) continued to decline since the 2013 survey. The major difficulties related to the tax environment included the complicated procedures of tax audits (31.5%) and frequent tax law amendments (30.2%).

With respect to the financial environment, key difficulties included complicated financing procedures (30.5%), and high interest rate and loan commissions (23.5%). Although many respondents reported difficulties with regulations on foreign exchange transactions (24.4%), the percentage has continued to decline since 2009, which points to the improvement of Korea’s foreign exchange transaction system. In the area of the administrative environment, the percentage of respondents pointing out language barrier between public officers declined by 19.4 percentage point from 2015. This finding suggests that the foreign language services at administrative agencies have achieved the intended results.

The respondents reported a significant improvement in their satisfaction with the overall housing environment from 2015 (44.6% → 69.3%; 24.7%p↑) This can be attributed to improvements over 2015 across various housing-related issues such as high rent, low cleanliness, poor hygiene, and difficulties with signing contracts. The most reported difficulty with the traffic environment was insufficient traffic signs in foreign languages, followed by insufficient parking spaces, people not obeying traffic regulations, and insufficient announcements in English, in that order. On the contrary, the percentage of respondents pointing out traffic regulation violations recorded a substantial decline (24.3%p↓). The percentage of respondents who answered that they are satisfied with the overall visa services was 61.1%, recording a 14.1 percentage point from 2015. Except for difficulties with issue/extension requirements (37.5%), dissatisfaction with language barriers with government officials (20.6%), insufficient guide materials (18.6%), and insufficient windows dedicated to foreigners (17.6%) have declined.

KOTRA Invest Korea CEO Kim Yong-Kook said, “Given the pivotal role of FIEs in the national economy and job creation, we will continue our efforts to identify their difficulties related to their business and living environments, while expanding our employment support programs tailored to their employment needs.”

출처 : Invest Korea (2018.03.20)

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