What do I need to be aware of when entering South Korea? Are there risks to doing business there?

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October 2015

South Korea’s business climate outperforms most other advanced economies. Australia’s International Business Survey 2015 asked over 1,200 Australian internationally-active businesses about potential barriers to doing business in South Korea:

Local language, culture and/or business practices

  • More than 50 per cent of respondents identified the local language, culture and/or business practices as the dominant barrier to doing business in South Korea
  • Using an interpreter can be valuable when entering the South Korean market

Foreign competitors

  • 11 per cent of respondents cited foreign competitors who were covered by more favourable free trade agreements with South Korea as a major barrier to success
  • The Korea-Australia Free Trade Agreement (KAFTA), which came into force in December 2014, is expected to level the playing field for Australian exporters

Tariffs, quotas and import duties

  • 11 per cent cited tariffs, quotas and import duties as a potential barrier
  • The KAFTA that has recently been brought into force will significantly reduce tariffs and duties, making it easier for Australian exporters to enter the market

Access to finance

  • One of the most common issues for SME exporters in any market is funding growth
  • For SMEs exporting to South Korea, help is available from a number of sources
  • Your banker can assess your situation and advise you on your best course of action

Regulations that favour local firms

  • A key characteristic of Korea’s development has been the existence of Chaebols (a conglomerate of family-controlled firms) that participate in most areas of business
  • These firms exert considerable market power, which can pose problems for competing firms both domestic and foreign

Austrade, the Australian Government’s trade and investment agency, provides more information on some of the potential risks to doing business in South Korea and how to mitigate them.


South Korea’s business climate comes in at 5 out of 189 economies on the World Bank’s ease of doing business gauge – Export Finance Australia country profile, South Korea.