US Companies Tell Yoon "Korean-Style Regulations, Labor Laws, and High Tax Rates Are Burdensome"

Korea, Second Best Place to Do Business in Asia After Singapore

President-elect Yoon Suk-yeol presiding over the secretariat meeting at the 20th Presidential Transition Committee in Tongui-dong, Jongno-gu, Seoul, on the morning of the 5th. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] South Korea was ranked as the second most attractive country for doing business in the Asia region by American companies. However, many opinions suggested that to enhance investment appeal, it is necessary to improve South Korea's unique regulations, labor laws, and high tax rates.

According to the "2022 Business Environment Survey" conducted by the American Chamber of Commerce in Korea (AMCHAM) targeting over 80 member companies and announced on the 7th, South Korea was chosen as the second most suitable location for an Asia regional headquarters following Singapore. Japan ranked third, Hong Kong fourth, followed by Taiwan and China in fifth and sixth place respectively.

The most challenging aspect of doing business in South Korea was "South Korea's unique regulations," with a response rate of 78.6%. CEO risk (42.9%), strict labor laws (42.9%), and high tax rates (25.0%) followed. Regarding the business environment, 47.6% responded "average," 29.8% said "good," 21.4% "below average," and 1.2% "bad."

Source=AmCham

Regarding the impact of COVID-19, 4 out of 10 member companies responded that they did not achieve their growth targets. The biggest challenge last year was "supply chain issues," cited by 44.0%. This was followed by "uncertain economic conditions" (35.7%), "sales and revenue" (35.7%), and "remote work" (22.6%). Only 6.0% were "very positive" about business prospects. With 46.4% responding "somewhat positive," the total positive response rate exceeded 50%. Regarding investment outlook, 44.0% of companies planned to increase investment, while 42.9% expected no change.

Among the companies participating in the survey, 51.2% said that government policies last year negatively affected business operations, and most expressed expectations for changes and improvements in government policies with the new administration.

James Kim, AMCHAM Chairman and CEO, stated, "AMCHAM is confident that President-elect Yoon Suk-yeol clearly recognizes the value and necessity of creating a global investment environment to enhance South Korea's competitiveness." He added, "We will work closely with the next administration to ensure that South Korea firmly establishes itself as Asia's number one regional headquarters and, furthermore, as the top investment destination for global companies."

AMCHAM plans to release an additional Korea-US Free Trade Agreement (FTA) implementation scorecard at the end of this month and convey key issues and proposals related to the bilateral FTA.

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