• Advantages of doing business with Korea
• Korea Information
• Statistics

Korea is a center for investors to target the two billion-strong East Asian markets as it neighbors Japan, the world's second-largest economy, China, potentially the world's biggest market, and the fast growing ASEAN nations. The Republic of Korea is now pursuing peaceful relations with North Korea through economic cooperation. This policy of engagement will contribute to reducing risk not only in the Korean peninsula, but also in Asia as a whole. In addition, the market potential of the two Koreas will serve to maximize the return on your investment.

Korea has a well-balanced industrial structure, producing a range of goods from high-tech to intermediates to consumables. So variegated a structure provides foreign investing companies with excellent opportunities for value creation through strong forward-backward linkages with Korean industries which maintain high shares of world markets. Korea is estimated to pit more effort than any other Asian nation in developing technology as measured by R&D expenditure now 27 percent of GDP, ranking third in the world after Sweden and Japan.

Korea's work force has been the engine behind the "Miracle on the Han River", the amazingly rapid industrial progress of Korea over the past three decades Korean labor productivity has grown on average by 10 percent annually, far ahead of competitors such as Taiwan, Japan, or Singapore Korean workers are renowned for their diligence The working hours of the average Korean employee numbered 2,253 while those of other Asian worker stood at only 92 percent of the Korean average. A major factor of high productivity is the contribution made by Korea's high quality work force Korea has 4,921 college-level pupils per 100,000 persons, raking third in the world after Canada and the U.S. Some 134 universities and 152 junior colleges produce 350,000 graduates annually.

Korea has grown to be the 11th largest economy in the world, achieving an average annual growth of nine percent over the past 20 years. The Korean economy is in fact equivalent to 60 percent of ASEAN member countries' total output, much larger than that of Taiwan or Hong Kong. The dynamism of the Korean economy, and hence the better opportunities for investment it represents, can be well explained by the fact that the Korean economy is almost the half the size of the Chinese economy, even though Korea's population is a mere 32 percent that of China's.

Korea has an extensive infrastructure of sea and airports to facilitate the efficient shipping of goods throughout East Asia Roads and railroad. Length per square kilometer stands at 760 meters and 32 meters respectively in Korea, outdistancing other Asian countries Korea has the advantage over the rest of East Asia in terms of electricity and telecommunications costs. A prime concern of foreign investors as the world rapidly evolves into the information society, the development of information infrastructure as well as the cost of telecommunications are gaining weight in the decision-making processes of foreign investors.

With the passage of the Foreign Investment Promotion Act in November 1998, Korea has liberalized in equity transactions is now permitted in large public enterprises and key industries. The real estate market opened fully in June 1998, and now foreigners are allowed to freely purchase, rent and subdivide residential and non-residential buildings. Tax incentives are now available for high-tech and value-added service industries. In addition, the tax concession period has been extended to 10 years. Local governments now have greater autonomy in offering tax reductions or exemptions.

Since the onset of the foreign currency crisis in November 1997, the Korean economy has continued to undergo a comprehensive reform and restructuring process in the financial, corporate, public, and labor sectors. Corporations have had to scuttle poorly performing sectors and pay off huge loans to become more competitive. Many domestic companies are in need of infusions of capital to become structurally sound. Many public enterprises will be privatized Korea Telecom, Phjang Iron and Steel, Korea Electric Power, Korea Gas, Korea Heavy Industries and Construction. Korea Tobacco & Ginseng will be sold privately opportunities exist for investments in the form of takeovers, mergers and acquisitions or equity buy-ins with world-class Korean companies. From January to September 1998, there were 173 cases of M&As, amounting in value to $1 billion. Some 24 percent of all FDI in Korea in 1998 comprised M&As, compared to 10 percent in 1997 since legislation liberalizing the real estate market was enacted in June 1998, foreign acquisition of real estate has risen sharply.

United State Embassy in Seoul,

Korea Overseas Services Information,

Korea-U.S. Economic Council "KUSEC",

American Chamber of Commerce
in Korean,

Korea Trade Investment Promotion Agency,

www.usembassy.state.gov

www.kois.go.kr

www.kusec.org

www.amchamkorea.org

www.kotra.or.kr

• Exports: $11.518 billion (8.9% decrease year-on-year)
• Imports: $11.34 billion (8.7% decrease year-on-year)
• Trade surplus: $179 million