86% of Companies "Considering Overseas Relocation of Workplaces Due to Strengthened Korean Regulations Leading to Reduced Employment and Investment"

[Asia Economy Reporter Kim Hyewon] A survey revealed that 4 out of 10 domestic companies are concerned about employment reductions due to strengthened corporate regulations by the government and the ruling party.

According to the 'Corporate Perception Survey on Strengthened Corporate Regulations' released on the 15th by the Federation of Korean Industries, the Korea Venture Business Association, and the Korea Association of Mid-sized Enterprises, when asked how recent strengthened corporate regulations such as the 'Three Corporate Regulation Laws' would affect company management, 37.3% of the total companies surveyed (230 companies) chose 'domestic employment reduction.'

This was followed by 'reduction in domestic investment' (27.2%) and 'relocation of domestic workplaces (factories, corporations, etc.) overseas' (21.8%). As corporate regulations become increasingly stringent domestically, the negative response rate indicating a reduction in employment and investment while considering relocating workplaces overseas reached 86.3%.

By company size, large corporations (50%) and mid-sized enterprises (37.7%) most frequently responded with 'reduction in domestic investment,' while venture companies most frequently chose 'domestic employment reduction' (40.4%). Regarding the relocation of domestic workplaces overseas, the response rate among large corporations was only 9.3%, whereas mid-sized enterprises and venture companies were 24.5% and 24%, respectively, which is 2.6 times higher than that of large corporations.

Among the 230 companies surveyed, 160 companies, accounting for 69.5%, expressed 'very dissatisfied' (44.3%) or 'dissatisfied' (25.2%) with the recent strengthening of corporate regulations by the government and the National Assembly. By company size, dissatisfaction was highest among large corporations at 96.5%, followed by mid-sized enterprises at 82.2%, and venture companies at 63.2%. Only 9.5% of the total, or 22 companies, responded with 'very satisfied' (3%) or 'somewhat satisfied' (6.5%), with no large corporations among them.

The 160 dissatisfied companies cited reasons such as 'overall deterioration of institutional environment weakening corporate competitiveness' (59.4%), 'promotion of anti-corporate sentiment viewing companies as potential criminal groups' (31.9%), and 'hindrance to new industry entry and damage to entrepreneurial spirit' (3.8%).

Regarding the most urgent policy tasks for revitalizing corporate vitality, the top priorities were 'comprehensive revision of anti-market policy orientation' (56.1%), 'expansion of financial support and economic stimulus' (21.7%), and 'relaxation of industry-specific regulations such as new business regulations' (19.1%).

When asked about the intensity of industrial regulations in Korea compared to foreign countries, 77.3% of responding companies answered 'very strong' (43.0%) or 'strong' (34.3%), while only 6.5% (15 companies: 1 mid-sized, 14 ventures) responded that the regulation intensity was 'weak' (4.3%) or 'very weak' (2.2%).

The most urgent areas for improvement were ranked as follows: 1st labor-related regulations (39.4%), 2nd tax-related regulations (20.4%), and 3rd discriminatory regulations by company size under the Commercial Act and the Fair Trade Act (13.4%). By company size, large corporations ranked 'discriminatory regulations by company size under the Commercial Act and the Fair Trade Act' (47.3%) as the top priority, while mid-sized enterprises (37.5%) and venture companies (44%) identified 'labor-related regulations such as the 52-hour workweek' as the most urgent to improve. Notably, mid-sized enterprises (23.2%) and venture companies (22.4%) ranked tax-related regulations, such as corporate tax reductions and easing of corporate comprehensive real estate tax burdens, as the second priority following labor regulations.

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