8 out of 10 Korean Startups Expanding Overseas Plan to Hire Foreigners

Preference for Locals Over Korean Expatriates and Students
Many Obstacles in Talent Acquisition and Work Visas

[Asia Economy Reporter Kim Jin-ho] Domestic startups venturing overseas are actively recruiting foreign talent, but it has been pointed out that they face various institutional and practical difficulties.

According to the Korea International Trade Association on the 29th, a survey conducted jointly with global human resources (HR) solutions company DEEL on 236 domestic startups regarding the "Status of Global Talent Recruitment for Startups' Overseas Expansion" found that 78% (185 companies) responded that they have the intention to hire foreigners. Furthermore, 48% (114 companies) actually proceeded with hiring.

Companies that hired foreigners of the desired nationality for overseas expansion within Korea accounted for 36% (85 companies) of the total. This indicates a preference for utilizing local foreign talent rather than the traditional methods often used by Korean companies in the past, such as dispatching headquarters staff as foreign resident employees or hiring local Korean international students.

Among startups that hired local foreigners overseas (86 companies), 90.7% (78 companies) signed employment contracts under the condition of "remote work." Remote work is emerging as a new means for hiring overseas talent and entering foreign markets. In terms of employment types, startups were recruiting overseas talent in various forms including "full-time" (59%), "contract" (70%), and "internship" (24%).

However, startups reported several difficulties in the process of hiring foreigners. The most challenging issues were "talent sourcing and background verification" (55.5%), "checking local labor regulations and concluding employment contracts" (43.6%), and "salary negotiations" (28%).

A DEEL representative advised, "While remote hiring is a convenient method for companies to recruit talent, legal risks associated with it must be carefully considered. Since labor regulations vary by country, it is important to seek expert assistance regarding local regulations and practices, and to tailor employment contracts, salaries, and welfare benefits to local conditions."

Concerns were also raised about the ‘E7’ work visa for foreign professionals based on corporate sponsorship, citing that the issuance requirements are somewhat detached from reality. According to the Ministry of Justice standards, even if the actual working period is less than one year, a minimum annual salary equivalent to 80% of the previous year's Gross National Income (GNI) per capita (about 30 million KRW) must be paid, which poses a significant burden for startups.

Park Pil-jae, head of the Startup Overseas Expansion Office at the Korea International Trade Association, stated, "There is an increasing number of knowledge service companies directly entering overseas markets based on information technology (IT). As the demand for hiring foreigners in job categories that can significantly contribute to investment attraction and sales growth is rising, it is necessary to operate related regulations flexibly, considering the practical situations on the ground."

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