FAKULTI PENGURUSAN DAN PERNIAGAAN

IJAZAH SARJANA MUDA PENTADBIRAN PERNIAGAAN (KEPUJIAN)

PERNIAGAAN ANTARABANGSA (BA246)

INTRODUCTION TO INTERNATIONAL BUSINESS (IBM 530)

GROUP MAJOR ASSIGNMENT: SOUTH KOREA

PREPARED BY:

NAME MATRIC NO.

NOR AINA AYUNI BINTI MOHD AZMI 2022831358
NAJWATUL AFIQAH BINTI AMLI 2022844504
NUR SARA AISHAH BINTI MAZLAN 2022498656
ARINAH BATRISYIA BINTI ZAKARIA 2022888112

PREPARED FOR:
MADAM FAIZAH BINTI MD SOHID

SUBMISSION DATE: WEEK 12

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 TABLE OF CONTENT

1.0 INTRODUCTION 2

2.0 BACKGROUND OF COUNTRY 3

2.1 Flag Of South Korea 6

3.0 D0 AND DON'TS OF DOING BUSINESS IN THE COUNTRY 7

3.1 Do’s of doing business in South Korea culture 7

3.2 Politics 11

3.3 Economy 12

3.4 Business Practices 17

4.0 ANY RELEVANT INFO 17

5.0 CONCLUSION 17

REFERENCES 17

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1.0 INTRODUCTION

Economic globalization is a method for enhancing a country's performance of the business,

whereby it evolves into a key factor in a country's economic ability to generate as well as
sustain income. In this subject, we have discussed about the governance mechanisms of
international corporations as well as the methods businesses employ to export their services
to other nations including the strategy used in order to cope the globality of national economies
and how they locate the operational functions globally, where an international commerce takes
place when prospects for local businesses to export goods overseas have been created by
both the rapid domestic growth of local industries and growing market demand.

Exporting activities have increased significantly in the current period of globalization, as more
businesses are now willing to venture their operations global. Compared to the past, it is
difficult to export because the limited and time-consuming facilities have made it difficult to
process the importation of goods. The progress and modernity of the world today has made a
business capable of being competitive in the long term for both goods and services. For
example, Toyota has established operational factories in foreign countries to make the
process of exporting goods more economical as well as the labor costs are lower.

It is very intense in the realm of international marketing and even demands particular aims to
attain the objective. This is because it is challenging for a firm to export goods or services
since there are numerous factors of external influences that can be an impediment to the
business's ability to remain in market demand. This may happen due to economic factors,
politics, business practices and even culture since every nation has distinct characteristics
and laws that must be observed by all multinational corporations.

Therefore, students in this group project are expected to choose one country to discuss global
industries that affect the commercial activities. As the discussion gathered, it was noted that
South Korea is one of the best country choices to discuss in this course work because the
growth of progress in industry has made the country one of the most advanced countries.
Indeed, the progress of the country has resulted in GDP income of more than 1.5 trillion USD
which results in the epic performance of Korean companies becoming key players in
international marketplaces. Therefore, in this project tasks will be discussed the do and don’ts
of doing business in South Korea.

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2.0 BACKGROUND OF COUNTRY

Figure 1: Maps of South Korea

South Korea, officially the Republic of Korea (ROK), occupies the southern half of the
Korean Peninsula and shares a land border crossing with North Korea. Its western border is
the Yellow Sea, and its eastern border is the Sea of Japan. South Korea considers itself to be
the sole legitimate government of the peninsula and its surrounding islands. The population of
South Korea in 2022 was 51,815,810 people, a 0.03% decline from 2021, nearly half of whom
live in the Seoul Capital Area, the sixth largest city in the world. Incheon, Busan, and Daegu
are notable cities.

From 1950 to 1953, North Korea and South Korea fought the Korean War which is also
known by other names. The war began on June 25, 1950, when North Korea invaded South
Korea following border clashes and rebellions in South Korea. The Korean War began in 1950
with a North Korean attack and saw major American-led United Nations involvement in favor
of the South, while China defended the North with Soviet assistance. On July 27,

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1953, the fighting came to an end with an armistice. For generations, South Korea has
maintained a strong alliance with the United States, providing military, economic, and political
support. Although it was a democracy in theory, its residents had limited political rights until a
military takeover in 1961 installed General Park Chung-hee in charge. During Park's reign in
the 1960s and 1970s, South Korea experienced significant industrial growth and economic
expansion (reaching a per capita income that is almost 17 above that of North Korea)

South Korea is a regional power and a highly developed country, which is now one of
the most wealth countries in East Asia, with an economy that ranks third only to Japan and
China. With mountains covering the majority of the country, the majority of the population is
concentrated in metropolitan areas. Seoul, South Korea's capital, is home to more than 25
million people, or more than half of the country's population. It has the third-highest life
expectancy in the world and ranks nineteenth globally on the Human Development Index. In
recent years, the country has had the lowest fertility rate in the world and an ageing population.
South Koreans enjoy one of the fastest Internet connection speeds and the most dense high-
speed rail network in the world. The country is the ninth-largest exporter and importer in the
world. It has one of the strongest militaries in the world, with the second-largest standing army
in terms of military and paramilitary personnel. Since the turn of the 21st century, South Korea
has been known for its globally influential pop culture, especially in music (K-pop), television
dramas (K-dramas), and film, a phenomenon known as the Korean wave.

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3.0 D0’S AND DON'TS OF DOING BUSINESS IN THE COUNTRY

3.1.1 Do’s of doing business in South Korea culture

(i) Meetings

Make every effort to arrive on time, and if you are late, be sure to offer an apology. Our
demeanor must be formal yet cordial, with the exception of sarcastic humor, which could be
interpreted as disdain for the guest. Organizational success in South Korea is founded on a
strong leadership structure, making respect for superiors a top priority. The most senior
member of the group should be the one to arrive first so that he or she can meet the most
senior representative from South Korea. First bow as low as the most senior businessman
does. Nonetheless, observe whether he extends his hand to shake yours and make sure on
using two hands or your right hand when greeting and exchanging with others. Using the left
hand to exchange business cards or shake hands with another person is considered unlucky
due to its associations with negativity and death. The majority of Koreans will not mind if you
use the wrong hand. However, older Koreans and businessmen in formal settings may be
offended.

In general, senior generations must be introduced to younger generations, and

females must be introduced to males. Make certain that we respect others and make
appropriate use of their positions. Managers must be seated across from one another at the
tables. Understand that the goal of first meetings is to learn about each other, so don't expect
to jump right into professional discussions.

It is difficult to refuse 'Tea' (which could also be coffee, juice, water, or something else),
so we will receive it even if we do not drink it. Before engaging in business negotiations, you
must wait until these procedures are executed. Give our opponent ample room to explain
himself, refrain from dominating the conversation, and try to listen and appreciate what he is
saying. This is especially pertinent if our opponent speaks poor English.

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(ii) Greetings

A bow is the most common form of greeting in South Korea. The casual bow is a head
dip with the eyes closed, sometimes accompanied by a slight waist bend. This greeting is used
when greeting someone informally or passing someone of a higher status. Business
interactions require a deeper bow, with the torso bending approximately 30 degrees from the
waist. The most respectful and profound bow expresses sincere gratitude or apology. To look
into the face of the other person, one must bend their torso to approximately 45 degrees, or
to such an angle that the head must stretch upward. The head is bowed during this greeting.
In South Korea, handshakes are also a common form of greeting. Koreans typically extend
their right hand when greeting. This relates to the complementary 'yin' and 'yang' concepts.
The energy of the right hand is more "yang," which is positive, bright, and masculine. The left
hand is regarded as more 'yin,' an inward energy associated with femininity, darkness, and
coldness. As a result, Koreans favor the right hand when touching others, exchanging objects,
and so on.

Using the left hand in a handshake is considered unlucky because of its associations
with negativity and death. The majority of Koreans will not mind if you use the wrong hand.
However, older Koreans and those in conventional or formal settings (such as business
settings) may be offended. As a sign of utmost respect during a handshake greeting, one may
support the wrist of their right hand with their left. When bowing or greeting elders or superiors,
Korean women are frequently instructed to place their left hand on top of their right. Women
may also exchange greetings by extending both hands to touch and clasp the other's hands.
As a sign of gratitude, a person in a position of service may clasp their hands in front of their
chest when greeting you or accepting something.

(iii) Communication

The majority of Korean business people in major cities will have a strong command of
English, but they may still be hesitant to use it. Knowing a few Korean words, phrases, and
how to express time and numbers can have a significant impact on how you are perceived.
Exhibiting an interest in South Korean business culture and a willingness to learn will go a
long way toward putting your South Korean counterparts at ease and ensuring that you are

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remembered. Do not assume that everyone outside of major cities is proficient in English.
Communicate using straightforward, simple English.

Cultural differences also influence communications. Old cultures prioritize peace over
conflict, leading outsiders to interpret silence as consent. Bad inquiries are negatively
interpreted, and 'yes/no' queries are unreliable. To ensure that the information was delivered
effectively by soliciting concerns from multiple angles. Even if your understanding is
incomplete, our opponent is unlikely to request an explanation. Use as little language as
possible and as many graphs, charts, and images as possible to demonstrate cultural and
linguistic differences. Everything moves at a breakneck pace in South Korea. The standard is
a same-day response. A week without communication is interpreted as a lack of motivation
and/or project cancellation.

3.1.2 Don'ts of doing business in South Korea culture

(i) Name and Title

Because Korean business culture is very competitive, the business contacts that a
Korean maintains are extremely vital to them. A third-party introduction is frequently highly
useful in creating rapport and confidence early on. When mutual trust is created, Koreans work
hard to ensure their partner's success and continue to work to build the trust and loyalty
required to support future business. When greeting someone in business, it is not appropriate
to use their profession followed by their last name. We should never address a Korean by their
given name. Never address a Korean official or senior with Mr., Mrs., Miss, or their family
name.

The majority of Korean family names consist of a single syllable, while most given
names have two. The surname appears first, Kim Tae-Woo, for example. When speaking
directly to a Korean counterpart or about them to another Korean, it is best to use the family
name preceded by an honorific, such as Mr. until you are on very good terms with them. In
situations requiring a high level of respect or formality, you should use the formal title and
surname of your counterpart, Chairman Lee, for example. Some Koreans who have lived
abroad may have adopted a Western first name and prefer to be addressed by it rather than
their family name. A suggestion to work on a first-name basis may be resisted by those who
consider their name to be a highly personal matter.
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 Surnames and Anglicized titles are widely used to connect with Westerners. Although
this is extremely polite and convenient for Westerners, many South Koreans are ignorant of
the Anglicized title and may not understand what is being said. South Koreans place a high
significance on names and use them to greet others.

(ii) Body Language

In South Korea, body language and the use of an individual's honorific title when
greeting an older or more senior person are important ways to show respect. Respect is
conveyed by keeping your legs straight and your upper body in a slight stoop. A slight bow is
also used when apologizing, for instance, if you step on someone's foot. You should also bow
deeply and say Annyeong-hee-gaseyo when saying goodbye. Koreans view being touched by
someone who is not a relative or close friend as a personal affront. Therefore, avoid touching,
patting or back slapping a Korean.

Besides that, direct eye contact should be avoided between junior and senior business
people. This is considered impolite and even a challenge. In South Korea, honor is
demonstrated primarily through body language and the use of a formal name when addressing
anyone senior or more experienced. Do not cross your legs or extend them straight out in
front of you and never place your feet on a desk or chair, but rather on the floor.

Always pass and receive items with your right hand (supported by your left hand at the
wrist or forearm) or two hands. To beckon someone, extend your arm, palm down, and make
a scratching motion with your fingers. Never use your index finger to point.

(iii) Gift giving

The importance of a relationship in Korea can be communicated by gift giving, which

is usually appreciated. However, it is impolite to offer someone an expensive gift if you know
they cannot afford to reciprocate in kind. Gifts should not be opened in front of the giver. There
is a gift-giving custom in Korea, particularly at official conferences and encounters between
highly senior people. Bringing a gift for our guests and repaying them is also customary when
traveling abroad. In working-level important meetings, presents were unusual.

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 Offer no expensive gifts, knives or scissors (which indicate "cutting off" a connection),
green headgear, things with red lettering (which represents death), or gifts in groups of four
(denotes death). Gifts should always be wrapped in red or yellow paper because these are
the royal colours. You can also utilize colours that indicate happiness, such as yellow or pink.
Never sign a card with red ink or wrap it on green, white, or black paper. In South Korea,
modest gifts are provided as part of the practice of establishing a business connection.
Products from the United Kingdom or our specific country, as well as anything imprinted with
our corporate logo, would be extremely warmly received. As a demonstration of respect, South
Koreans are supposed to decline the present once or twice. Never sign a card with red ink or
wrap it on green, white, or black paper. If you are welcomed to a Korean's home, bring fruit,
high-quality chocolates, or flowers and give the gift with both hands. Gifts are not opened
when they are received but will be done later.

Take a gift with both hands. Accepting something with both hands shows appreciation
for the person doing it. That is why, once you are reverted back from anyone, even if it is a
clerk, they would reach one hand out with the cash and instantly use the second hand to tap
that hand to show thankfulness. Always accept something with two hands, whether it's a
beverage, money, or another form of present.

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3.2 Politics

3.2.1 Do’s of doing business in South Korea politics

(i) Establishing Bilateral Relations

It is important for each country to have bilateral relations where it is the involvement of
relations between two international parties that work together in the world's major
organizations for diplomatic relations. South Korea is known as a country that actively exports
its cultural industry to other countries, but this has become complicated due to political unrest
brought on by commercial and diplomatic complicity. This conflict is becoming more severe
since there is suspicion that the majority of the international aid collected by businesses has
a collusive link with politicians. A number of trade disputes have also arisen as a result of
South Korea's decision to boycott Japanese goods in regard to the political tensions between
South Korea and Japan in the period between 2017 and 2019 because of historic issues.

Due to the fact that the situation was not escalated, Japan started to retaliate in the
meantime by imposing limits on the shipment of commodities from South Korea which almost
sparked a military clash. Additionally, because South Korea is renowned for being sensitive to
concerns that raise sensitive matters, such as those impacting the country's political peace,
every organization that undertakes business activities must avoid conflicts that could result in
the issue of boycotting goods. As was the case in 2016, when a public figure who displayed
the Taiwanese flag during a South Korean television program was criticized harshly by
politicians since it was seen as a pro-independence gesture. The impact of the incident is
evidently having an effect on the cultural export industry. As a result, maintaining strong
diplomatic ties with other nations is crucial for fostering increased international collaboration
and expanding commercial opportunities.

(ii) Foreign investment

There are several constraints facing foreign investors that have been imposed by
South Korea. This is due to the fact that the government of South Korea has made this one of
the fundamental requirements for international investors to fully comprehend before placing
an investment in a Korean company, which this attempt is to keep track of each and every
foreign investment entering and departing Korea. Considering that, any foreign investor with
ties outside of Korea requires prior approval from Korean regulators such as the Bank of
Korea. These foreign investment restrictions are also imposed on the central and local

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governments, where such investment restrictions have been limited to certain industries.
Every foreign direct investor (FDI) must be registered under the Foreign Exchange
Transactions Act (FIPA) which was enacted in 1998. According to FETA regulations, the
Government has the power to disapprove the investor's application if the international
investment sector violates the conditions. Special restrictions can be imposed immediately if
the foreign investment has the potential to affect national security and thus affect the future
economic development of the country.

The following industries are among the sectors where foreign investment is restricted;

1) Planting agricultural products as well as purchasing wholesale meat.

2) The release of pamphlets, newspapers, and magazines.

3) The generating of electricity and the processing of nuclear fuel.

4) An element of transnational broadcasts of radio and television.

The efforts to improve the calibre of foreign investors entering the South Korean market are
to be implemented through the registration of foreign investors brought about by the Foreign
Investment Promotion Act (FIPA), whereby it is one of the incentives made by South Korean
to protect the foreign investors. The provision of these incentives, which also includes taxes,
subsidies, and visas for foreign investors, is one of Korea's objectives to draw international
capital into slightly elevated industries as well as to forge ongoing cooperation relationships.

(iii) Recognize the rules and laws.

It is important for every business that wants to participate on the international scene to
be aware of the government's political atmosphere in order to prevent any legal snags that
can restrict operations. This is due to the fact that each country has its own government and
local regulations, which must be followed by any international organization before engaging in
political activities such as lobbying and contributing to campaigns. As in South Korea, the laws
and regulations have changed significantly as a result of the political and economic
developments that occurred in South Korea during the President Moon administration. Such
as changes to employment laws that is in Labor Standards Act of The Republic of Korea, the
South Korean government in an effort to develop a flexible working time system by
amendment a regulation to every company with more than 400 employees is obligated to

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maintain a maximum of 52 working hours in 7 days, as opposed to the previous legislation,
which was a maximum of 68 working hours in 5 days.

Based on different categories, this legislation places a greater emphasis on protecting

female employees as well as minors. For instance, female employees who have recently given
birth within the first twelve months must obtain their employer's approval to work 2 hours per
day, which is about 6 hours average weekly, while the average part-time workers work
approximately 7 hours per day. The legal system was created by the government as a way to
ensure that people had adequate downtime to begin working the next day. As a result,
international investors must update their knowledge of South Korea's regulatory and legal
framework in order to avoid non-compliance issues and policy violations.

3.2.2 Don’ts of doing business in South Korea politics

(i) Ignoring the impact of politics on your business operations

Ignoring the impact of politics on business operations can be risky and can potentially
have negative consequences for a business. Politics can influence a wide range of issues that
can impact a business, including economic policy, regulation, and trade agreements. It is
important for businesses to stay informed about political developments that may affect their
operations and to consider the potential impact on their business.

Thus, it also can lead to a lack of preparedness for potential changes or disruptions. It
can also result in missed opportunities to shape the business environment in a way that is
favourable to the business. For instance, if a business is unaware of changes to regulatory
policies that could affect their operations, they may be unprepared to comply with the new
requirements. So, it is important for businesses to be aware of the political landscape in which
they operate and to consider how it may impact their operations. Staying informed and being
proactive in managing the potential impact of politics on the business can help to mitigate risks
and maximize opportunities.

(ii) Don’t interference in local politics relation

A business should avoid any actions that might be taken as meddling in political affairs.
It's crucial to maintain professional objectivity as well as refrain from taking unnecessary

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actions that could really come out as inappropriate. This is due to the fact that in order to
prevent conflicts of interest such bribery, entrepreneurs must terminate relations with political
movements that might be viewed as conspiratorial as long as they are active. Similar to what
occurred in South Korea during the administration of Chang and Rhee, whereby politicians
that had a close personal tie to business corporations provided assistance to private
companies as a bribe in exchange for monetary gain.

Soon after the military coup happened in the year of 1961, the case of the acquisition
of illegal wealth was investigated thoroughly, hence with the exception of the chairman of
Samsung, the investigation's discoveries resulted in the detention of the leaders of major
corporations. They were accused of possession with intent to distribute government property,
engaging in political bribery, obtaining unfair profits from foreign aid sources, engaging in
currency devaluation, and many other offenses.

As a result, the chairman of the corporation was given the decision of accepting a
prison sentence or surrendering their company in place of paying penalties as well as the
prison term. Therefore, it is crucial for every organization to take precaution not to get involved
in political activities that may have an impact on the development as well as operation and
reputational of the business.

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3.3 Economy

3.3.1 Do’s of doing business in South Korea economy

(i) Research their market before entering it to understand their local business
culture and economic conditions.

Researching the South Korean market before entering it is an essential step in

understanding the local business culture and economic conditions. This includes learning
about the country's history, government, laws, and business practices. It also involves
understanding the local consumer market, including their preferences, purchasing habits,
and competition.

Conducting thorough research can help you gain a better understanding of the
challenges and opportunities that exist in the South Korean market and be better prepared to
navigate them. This includes understanding the local business environment, such as the
competitive landscape, consumer demographics, and market trends.

In addition to understanding the business environment, research can also help you
identify potential business partners, distributors, and suppliers. These relationships can be
vital to your success in the South Korean market, as strong partnerships and networks are an
important aspect of the local business culture. By establishing these relationships, you can
gain valuable insights and resources that can help your business thrive.

Another important aspect of research is understanding the best marketing and sales
approaches for the South Korean market. This includes understanding the preferences and
purchasing habits of local consumers, as well as the most effective marketing channels and
tactics. Research can help you develop a comprehensive marketing plan that is tailored to the
South Korean market, increasing your chances of success.

Overall, conducting thorough research before entering the South Korean market can
help you better understand the local business culture and economic conditions, and position
your business for success in the market.

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(ii) Take advantage of the country's free trade agreements with other countries to
expand the business internationally.

South Free trade agreements (FTAs) are international agreements that eliminate or
reduce barriers to trade between countries, making it easier for businesses to sell their
products and services in foreign markets. South Korea has a number of FTAs with other
countries, which can provide significant benefits to businesses looking to expand
internationally.

By taking advantage of these FTAs, businesses can access new markets and
customers, and tap into new sources of supply. This can help businesses increase their global
reach, boost their sales, and expand their operations. For example, if a South Korean
company has an FTA with a country in Southeast Asia, they may be able to more easily export
their products to that market, as tariffs and other trade barriers will be reduced or eliminated.

In addition to reducing tariffs and other barriers to trade, FTAs often include provisions
for protecting intellectual property, promoting investment, and facilitating the movement of
people and goods between countries. These provisions can help businesses operate more
efficiently and effectively in foreign markets, and protect their interests. For example, an FTA
may include provisions for the protection of intellectual property, such as trademarks and
patents, which can help businesses safeguard their intellectual property rights in foreign
markets.

To take advantage of South Korea's FTAs, businesses must first ensure that they meet
the requirements of the agreement, such as the origin of their goods or services. They may
also need to register their products or services with the relevant authorities, or obtain
certification of origin. This can involve working with local partners, distributors, or agents to
navigate the requirements of the FTA and ensure compliance.

Overall, taking advantage of South Korea's free trade agreements can be a powerful
way for businesses to expand internationally, access new markets, and increase their global
reach. By understanding the provisions and requirements of these agreements, businesses
can take advantage of the opportunities they offer and position themselves for success in the
global market.
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(iii) Utilize the country's advanced technology and infrastructure to
streamline business operations and increase efficiency.

South Korea is known for its highly developed economy and advanced technology and
infrastructure, which can provide significant benefits to businesses operating in the country.
By leveraging these resources, businesses can streamline their operations and increase
efficiency, helping them to save time and resources and improve their competitiveness.

There are several ways that businesses can utilize the country's advanced technology
and infrastructure to improve their operations. For example, businesses can use advanced
manufacturing technologies to improve production processes, such as by automating tasks,
reducing waste, and increasing productivity. This can help businesses save time and
resources and improve the quality of their products.

In addition to advanced manufacturing technologies, businesses can also leverage the

country's high-speed internet and advanced telecommunications infrastructure to
communicate and collaborate with partners and customers. This can help businesses
streamline their operations by reducing the need for face-to-face meetings and improving
communication and collaboration.

Utilizing the country's advanced logistics and transportation systems can also help
businesses streamline their operations and increase efficiency. South Korea has a well-
developed transportation infrastructure, including ports, airports, and highways, which can
help businesses efficiently move goods and materials around the country and internationally.
This can help businesses save time and resources and improve their supply chain efficiency.

In addition to improving operations, utilizing South Korea's advanced technology and

infrastructure can also help businesses access new markets and customers. The country's
advanced technology and infrastructure makes it an attractive location for businesses looking
to enter the Asian market and can help businesses access customers and partners in other
countries. By leveraging these resources, businesses can increase their global reach and
expand their operations.

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 Overall, utilizing South Korea's advanced technology and infrastructure can be a
powerful way for businesses to streamline their operations, increase efficiency, and improve
their competitiveness in the market. By leveraging these resources, businesses can position
themselves for success in the South Korean market and beyond.

3.3.2 Don'ts of doing business in South Korea economy

(i) Neglect to properly register the business and obtain necessary licenses and
permits before operating in South Korea.

Neglecting to properly register your business and obtain necessary licenses and
permits before operating in South Korea can have serious consequences for your business. It
is important to follow all local laws and regulations in order to legally operate your business in
the country, and failure to do so can result in fines, penalties, and even criminal charges.

Properly registering your business and obtaining necessary licenses and permits involves
following a number of steps, which can vary depending on your specific business and industry.
Some common steps include:

(i) Choosing the appropriate business structure: In South Korea, businesses can be
registered as a corporation, a limited liability company, or a sole proprietorship. Each
structure has its own advantages and disadvantages, and it is important to choose the
structure that best fits your business's needs.

(ii) Registering with the local government: After choosing a business structure, you will
need to register your business with the local government. This involves completing and
submitting the necessary forms, paying any fees, and obtaining any necessary
approvals.

(iii) Obtaining necessary licenses and permits: Depending on your specific business and
industry, you may need to obtain certain licenses and permits in order to legally operate
your business in South Korea. This can include licenses for specific types of
businesses, such as restaurants or retail stores, as well as permits for activities such
as construction or importing and exporting goods.

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 In addition to following local laws and regulations, it is also important to ensure that
your business meets any applicable standards and requirements, such as health and safety
regulations and environmental regulations. Failing to meet these standards and requirements
can also result in fines and penalties and can harm your business's reputation.

Overall, it is important to properly register your business and obtain necessary licenses
and permits before operating in South Korea in order to legally operate your business in the
country and avoid potential fines, penalties, and other legal consequences. By carefully
researching and following the necessary steps, you can ensure that your business is compliant
with all local laws and regulations and position yourself for success in the South Korean
market.

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3.4 Business Practices

3.4.1 Do’ in doing business in South Korea Business Practices

(i) Receiving and presenting business cards

At the beginning of the meeting, an exchange of business cards would take place and
the ritual of business cards is very important for them. Therefore, showing the right ritual in
exchanging business could give the idea of what kind of behaviour you have. Showing respect
when receiving cards is indicative of how respectful you would be as an individual in business.
Koreans are known to mind their behaviour in every aspect of their life as well as in business.

In terms of etiquette, receiving a business card should be taken seriously when doing
business or partnering up with Koreans because the behaviours themselves could interpret
how you would act in business. The act should be held out your both hands or your right hand
only when receiving the business cards and until everyone is seated, do not immediately put
the card away instead place it on the table with mannerisms as it shows you are interested in
doing the business with them. Then, you are not allowed to put the card in your back pocket
as it interprets you sitting on the person's face. The act of writing something on the card is
also similar unless you are directed to do so. The appreciation shown by you is well received
by Koreans but it would be insincere if you are overdoing the compliments.

The act of good mannerisms also has to be shown when presenting cards to the
Koreans. You have to use both hands or only the right hand as you give the card. Make sure
the writing on the cards is facing the other person so it is readable to the recipient. In both
upper corners, hold the card with your index finger or thumb between your top knuckles. You
are also encouraged to keep plenty of cards preferably on one side of the language written in
Korea as Hangul is very valuable for them and it can show you are appreciating and learning
their language. One of the most crucial business accessories when conducting business in
South Korea is a business card holder.

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(ii) Competition Oriented

Korea has generally known to be displeased with becoming in the second spot and
they can get competitive about it, especially in business and consider compromise as a defeat.
Therefore, to increase their trust in businesses, Korean partners frequently need to be
convinced that a win-win situation is the intention of business. Along with the competition
culture, a sense of urgency also plays a role as fast-paced and tenacious often in business
negotiations. They are not fond of wasting time and could even be perceived as impatient
because times are very important to them, and they always try to spend most of their time
working hard. Koreans view punctuality as a sign of respect. Receiving a response from them
regarding the project proposal within a day is common. Logically, receiving nothing from them
for a week could indicate they are not interested or want to terminate the project.

A foreign partner that wants to work with Korea has to know the bitter fact they would
always seek a better deal from somewhere else. A sudden change in the deal or breaks in the
relationship could be faced by a foreign partner. It should be known to aim for short-term deals
rather than long-term ones to avoid unnecessary budget wasting on nothing. While doing the
short-term, foreign partner could aim to build trustful relationships with them until they
recognize you as your competition and see your project as a better deal. Recognize that
Koreans frequently have their company's long-term survival at the forefront of their minds, so
be aware of confusing circumstances and steer clear of uncertainty at all costs. Uncertainty in
business is necessary for them to be advanced in the business.

(iii) Relationship Oriented

Building a relationship is important when working with Koreans because, from this, it
would also build trust between you that could benefit you while doing business. Maintaining
relationships is seen as a crucial factor in Korea due to its competitive culture. It is usually
very effective if you are being introduced by a third party due to the fact the third party already
establishes a good relationship with them. Once the trust enters the deal, Koreans strongly
support their partner through up and down anything their partner needs and make sure their
partner succeeds in the continuous development of trust and loyalty towards each other.

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 Some irrelevant questions or information might you come across but it is actually their
way to know a great deal about you. They may be asking a personal question that is
completely out of the business-related show they are interested in keeping the business
relationship as a long-term relationship. Hence, being patient and trying to treat them like a
friend by providing each answer is beneficial to keep the business relationship. Showing a
good character of you definitely helps to maintain a warm welcome from them.

Building a relationship over meals and drinks often occurs when doing business with
Koreans. Smoking cigarettes and drinking are common activities at the end of the day among
Korean businessmen. Rather than enjoying the drinks only, they would disclose some of the
important information regarding business at the drinking session. However, keep in mind that
by avoiding their drinking customs, you are also avoiding a significant portion of Korean
corporate culture. This custom is seen as their strategy for strengthening their business team
in the face of their competition.

3.4.2 Don’ts in doing business in South Korea Business Practices

(i) Sensitive Topics during business meetings

Sensitive topics of discussion have always been avoided on many occasions. It is the
same as you can expect from Koreans as they rarely speak about sensitive issues during
meetings. Discussing matters about North Korea, issues related to your Korean associate’s
family and politics, in general, are the issues you do not include in the meetings. It is important
to stay focused on your business intention or even if you want to break the ice, be sure to
carefully pick the right topic. Harmoniousness in the Korean working environment is achieved
because they have a high value for it. Therefore, avoiding such a topic is helping to keep the
good environment working. Even though these topics could strike a conversation with them in
informal gatherings as they have a strong opinion on these and some would even oppose their
other Korean colleagues it is still seen as inappropriate to introduce the sensitive topic.
Instead, you could use this situation in a good way such as by getting to know your partner
and colleague because they are totally open with you, be friendly, and can treat them as
friends. Koreans preferably build good business relationships by engaging as friends as it
would develop trust between two parties, and they would be comfortable discussing business
matters without hesitation.

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(ii) Punctuality in South Korea

It is unacceptable for you to arrive late on every occasion involving Korean people. As
mentioned before, Koreans do not like wasting time and every second is precious to them.
Even though, probably on one or two occasions, they might be late just know that they would
try their hardest to be on time and have other important things they need to attend to.
Punctuality is a sign of respect and as a foreign investor one must learn the other culture that
you want to work with. This is basic knowledge and manners that you should practice while
doing business with them. Other than that, being punctual is also a sign that you are showing
your interest and are serious about this project and who does not like punctuality? But it is
forgivable if you are late unintentionally as we could not predict what might happen ahead of
us, you can just have to inform them immediately the second you are late and apologize again
when you arrive. As a newcomer, you are advised to prepare yourself early when you have a
meeting with them. Be sure to depart 30 minutes ahead of Seoul, for instance, a busy city
where you might be stuck in a heaving traffic light and find it difficult to find a taxi, the building
might confuse you so give yourself time so that you are coming prepared instead of rushing.

(iii) Business Contract

Do not be too rushed in terms of signing the business contract because you must
understand the first outline and what is a business contract for them. Korean business people
are good negotiators so you have to be patient with them and simultaneously firm. Usually,
they prefer a business contract to be flexible with room for adjustment. The interpersonal
interactions between the organizations are frequently seen as being more significant than the
actual contract. Making sure you fully understand and that you two are on the same page
would prevent upcoming displeasing surprises from them. Communicating about each other's
expectations also helps you be on the same terms. Business contracts are considered an
outline of a working relationship rather than binding agreements. Be sure to not rush them
either as they would show you are rather impatient, so therefore building a good relationship
is a foundation to join a venture with them. You must be quick minded and understand the
room when needed when it comes to doing a business contract with them.

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4.0 ANY RELEVANT INFO

Challenges doing business in South Korea

South Korea is known for its rapid growth and economic development. Situated
between Japan and China, two advanced countries in terms of economics as well as
technology but that does not make South Korea fail to keep pace, in fact, the economy of
South Korea held a position as 5th largest economy in Asia dan the 13th in the world. Until
now, South Korea is notable as the fastest economic development. Doing business in a
country that has stable politics and is able to compete with other countries is an opportunity
for foreign business to set up their business and it also gives the fact South Korea also become
more open towards foreign business and investment also, as part of its attempts to make the
market more open to international investment, the government is likewise dedicated to green
growth. However, the barrier and challenges always existed which cause many foreign
businesses is still struggling.

i) Local Competition

The largest companies such as Samsung, LG Electronics, and Hyundai Motor

Company are in South Korea and these brands are powerful in that their consumer reach
across the globe and because they often quickly adopted the latest manufacturing electronics.
They are also known as Chaebol which refers to family-owned companies that developed into
huge conglomerates, Chaebol is supported by the South Korean government The foreign
business might be tough to keep up with the pace even though it was a well-known brand. In
this case, the foreign businesses that wish to set up the business would find an opportunity to
lack diversity due to almost all industries tend to be conquered by Chaebol. Additionally,
matters like forcing prices down are one thing a foreign business could have come across and
this sector is especially common in the pharmaceutical sector which price limits imposed by
the Drug Expenditure Rationalization Plan may make it challenging for businesses that place
a high priority on research and development to turn a profit on their patented medicines. It is
advisable for any foreign business that plans to move their business globally in South Korea
to have an insight view of their market and carefully plan strategies and backup plans to
prevent the business from becoming a flop. Hence, Nokia is among the brand that was popular

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in the past but unfortunately, they failed in the South Korean entry because of the fierce
competition from Samsung and LG.

ii) Unwillingness to adopt Foreign Business Modal

Citizens of South Korea are known to stick strongly towards tradition and always would
support their local products. Their deep respect towards tradition is being applied in every
aspect of their life hence business culture which influences by Confucianism teachings and
culture male dominated. Confucian principles could be used to foster harmonious relationships
in the workplace and in commercial practices. Males are seen as an asset that is valuable
therefore, they are trained in the mandatory military. Consequently, this order and hierarchy
are frequently reflected in the business world. These business practices might be difficult to
adapt by foreign businesses and male-dominated, which could take away opportunities from
a woman who has the potential to manage a business. The employment law system is also
perceived by foreign businesses as inflexible. As the result, they would be having trouble
terminating an employee that shows low performance at work. Korean is not used to a new
system or modal that is different from their usual modal and because of this, resistance from
Korean employees and business partner may occur when foreign business tries to use a
different modal instead of understanding their culture and business practices. It is a crucial
point for each foreign business to learn systems related to the tradition of South Korea and
could be even better if they could develop modal strategies that emphasize their deep-rooted
tradition and history. By developing these strategies, foreign businesses could prevent cases
like Walmart where they were also not successful in entering the South Korean market due to
practicing different business strategies and did not do thorough research based on the
preferences and tastes of the local market consumers resulting creating incompatibility
between the company and targeted consumer. Matching the strategies with local market
conditions is one of the things that should be stressed when planning to do business globally.

iii) Language barrier

While English is widely taught in schools in South Korea, it is not as widely spoken as
in many other countries, and many business documents and contracts are written in Korean.
This can make it difficult for non-Korean speakers to navigate the local business environment
and communicate effectively with local partners and customers. It can also make it difficult to
understand and comply with local laws and regulations, as they are often written in Korean.
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To overcome this challenge, businesses may need to invest in language training or hire local
employees or translators who can speak both Korean and English. It is also important to work
with local partners or agents who can help you navigate the local business environment and
communicate effectively with local stakeholders.

Overall, the language barrier can be a challenge for businesses doing business in
South Korea, but it is possible to overcome this challenge by investing in language training or
hiring local employees or translators, and by working with local partners or agents.

iv) Legal and regulatory environment

South Korea has strict laws and regulations that businesses must follow to legally
operate in the country. These laws and regulations can vary depending on the specific industry
and business activity, and it is important to carefully research and understand these
requirements to comply with them. Failure to comply with local laws and regulations can result
in fines, penalties, and even criminal charges, and can harm a business's reputation. It is
important to carefully research and follow the necessary steps to register your business and
obtain any necessary licenses and permits, and to ensure that your business meets any
applicable standards and requirements. To navigate the legal and regulatory environment in
South Korea, it can be helpful to work with local partners or agents who are familiar with the
local laws and regulations, and who can help you comply with them. It is also important to
seek legal counsel, if necessary, to ensure that you are fully compliant with local laws and
regulations.

Overall, the legal and regulatory environment in South Korea can be challenging for
businesses, but it is important to understand and comply with these laws to legally operate
your business in the country. By carefully researching and following the necessary steps,
businesses can position themselves for success in the South Korean market.

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5.0 CONCLUSION

Based on the research and analysis conducted in this report, it can be concluded that
South Korea is a desirable market for international business opportunities. The country
boasts a highly developed economy with a GDP per capita among the highest in the world,
making it an ideal place for businesses to set up operations. South Korea also has a skilled
and educated workforce, which is essential for businesses looking to tap into the country's
expertise in advanced technology and manufacturing. The government is also supportive of
foreign investment and actively promotes international business through various initiatives
and policies.

South Korea is particularly strong in the areas of technology, automobiles, and

electronics. These industries have a long-standing history and are highly developed, making
them great opportunities for businesses looking to break into the market. However, it is also
important to note that the country is a highly competitive market, with a dense population
and businesses vying for a share of the market.

The country also presents some challenges such as cultural and language barriers,
and a complex business culture. There are also trade restrictions with some countries that
may limit some business opportunities. For example, In the case of the United States, there
has been a recent tension in their trade relations.

To succeed in South Korea, international businesses should carefully research the

market, develop a clear strategy, and seek out local partners and resources to navigate the
business environment. This includes understanding the unique customs and business
practices of the country, as well as building relationships with local business leaders and
government officials.

In conclusion, South Korea can be considered as a market with high potential for
international business opportunities due to its strong economy, skilled workforce, and
government support for foreign investment, but it can be challenging to navigate the cultural
and business barriers, as well as the competition in the market. International businesses
should be prepared to invest the time and resources necessary to understand the market
and build relationships in order to succeed in South Korea.

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6.0 REFERENCES

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