Korea's Startup Cost 4.9 Million Won... Second Highest Among OECD Countries

World Bank Business Environment Report
Comparison of Startup Environments in 36 OECD Countries
South Korea 4.3 Times Higher than OECD Average

Startup Costs by OECD Country (left) · Startup Costs by OECD Country Relative to Gross National Income (GNI). Source: Korea Economic Research Institute

[Asia Economy Reporter Dongwoo Lee] A survey revealed that startup costs in South Korea are the second highest among the 36 member countries of the Organisation for Economic Co-operation and Development (OECD). The startup cost relative to Gross National Income (GNI) also ranked second in the OECD, indicating that startup costs are expensive compared to other countries.

The Korea Economic Research Institute under the Federation of Korean Industries announced on the 4th that, based on an analysis of the startup environment in the World Bank’s Doing Business report, South Korea’s startup cost last year was 4.9 million KRW, the second highest among the 36 OECD countries.

This figure is about 4.3 times higher than the OECD average of 1.13 million KRW. The country with the highest startup cost is Italy (5.14 million KRW). Following South Korea in second place are Japan (3.39 million KRW), Germany (3.38 million KRW), and Belgium (2.7 million KRW), respectively.

The country with the lowest startup cost is Slovenia (0 KRW). Next are the United Kingdom (20,000 KRW), New Zealand (90,000 KRW), Ireland (90,000 KRW), Lithuania (90,000 KRW), and Denmark (110,000 KRW) in that order.

South Korea’s startup cost as a percentage of per capita GNI is 14.6%, the second highest after Mexico (15.2%). This is 4.3 times the OECD average (3.4%) and significantly higher compared to the United States (1.0%) and Japan (7.5%).

The countries with the lowest startup cost relative to per capita GNI are Slovenia and the United Kingdom (0%). Following are Ireland (0.1%), Denmark (0.2%), and New Zealand (0.2%).

South Korea’s startup procedures require three steps: company seal production (1 day), registration and payment of incorporation fees via the online corporate system (3 days), and tax office registration (4 days). This is 2.1 steps fewer than the OECD average of 5.1 steps. The total time required to complete these procedures is 8 days, which is one day shorter than the OECD average of 9 days.

Countries with the shortest startup procedures and time are New Zealand (1 step, 0.5 days), Canada (2 steps, 1.5 days), and Australia (3 steps, 2 days). In particular, New Zealand requires only one online application step taking 0.5 days, making it the easiest country to start a business among OECD members.

Yoo Hwan-ik, Head of Innovation Growth at KERI, said, "Securing startup funds is the number one obstacle for domestic startups," adding, "To solve employment issues and secure the driving force for innovative growth in the Korean economy, costs must be reduced to activate startups."

This content was produced with the assistance of AI translation services.