49% of Foreign Companies in Korea Say Labor Regulations Are the Biggest Issue

About half of foreign-invested companies (hereinafter referred to as foreign-invested companies) identified "labor regulations" as an area Korea needs to improve. Additionally, 7 out of 10 foreign-invested companies reported having no new investment plans for this year or have not even formulated any plans.

On the 29th, the Korea Employers Federation announced the results of a survey titled "Perceptions of Regulations and Investment Outlook of Foreign-Invested Companies in Korea," conducted on 201 foreign-invested companies (with 50 or more employees) operating in Korea. In the survey, 48.8% of respondent companies pointed to "labor regulations" as the regulation needing improvement compared to other countries. This was followed by governance regulations (23.9%), licensing and construction regulations (23.4%), and safety and health regulations (21.9%).

Regulations in Korea That Need Improvement Compared to Other Countries (Multiple Responses) [Source=Korea Employers Federation]

Regarding the recent court ruling that found all former CEOs of foreign-invested companies guilty of illegal dispatch, the most common opinion (38.8%) was that it "demonstrates that there are Korea-specific risks when investing in foreign-invested companies." When comparing the level of regulations in Korea to those in the countries where their headquarters are located, one-third (33.8%) of foreign-invested companies evaluated that "Korea's regulatory level is higher than abroad."

Furthermore, 40.3% of foreign-invested companies reported having no new investment plans this year, and 33.8% have not yet formulated any investment plans. To revitalize investment by foreign-invested companies, 37.8% responded that "a drastic improvement in excessive corporate regulations" is most necessary.

Ryu Ki-jung, Executive Director of the Korea Employers Federation, emphasized, "This is an important time to actively attract foreign investment to overcome difficult domestic and international economic conditions," adding, "Since labor regulations were identified as the regulatory area needing improvement compared to other countries, excessive regulations beyond global standards should be promptly improved to reduce the regulatory risks perceived by foreign-invested companies."

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