Last updated: 17 Mar 2012
Doing business
Current business situation
The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to the Republic of Korea. This is regularly updated, and should be checked before planning travel.
Business culture
Business tips
Having a basic understanding of Korean culture and business etiquette will encourage better business relationships. Korean society is based on Confucianist beliefs, which means respect for superiors and parents, duty to the family, loyalty to friends, humility, sincerity and courtesy. One of the most important aspects of Korean society that Australian business people should be aware of is its hierarchical nature.
Formal introduction - Koreans want to do business with people they have a personal connection with. It is crucial that you are introduced to a prospective business associate through an intermediary. The higher the social standing of the intermediary, the more successful you are likely to be at making contact with the right people. Note that cold calling will not work.
Business cards - in Korean business organisations, everyone has a distinctive place in the organisational hierarchy. A Korean business person is not comfortable until your position and company name is known. Business cards should be left on the table in front of you for easy reference. When translating your card into Korean it is only necessary to translate your name and title. A direct translation of the title into Korean can be misleading so beware. For example, Managing Director corresponds with President in Korea. Finally, you should avoid using Japanese language business cards in Korea.
Building relationships - is vital that you build human relationships with the people you are doing business with in Korea. Relationships are developed through informal social gatherings that often involve a considerable amount of drinking and eating. Such informal gatherings also present both sides to discuss business in more friendly surroundings. Koreans do not hesitate to discuss business over dinner.
Legal documents - legal documents are not as important in Korea as they are in Australia as trust plays a far greater role. Koreans treat most legal documents as Memorandums Of Understanding (MOU) - i.e. documents that, no matter how specific or complicated, set out the broad outlines of a relationship.
Losing face - Koreans are extremely sensitive to having and maintaining face. The easiest way to cause someone to lose face is to insult them or criticise them in front of others. Never treat them as an underling when their status is high within the company. Sensitive matters may often be raised indirectly through the intermediary that first made the introductions.
Don’t be too pushy - Korean business people are reputed internationally to be good negotiators. Be prepared to be patient, gentle but firm. Be as dignified as possible and don’t push your position too hard. Be prepared for the ‘price war’ but don’t give in easily as Koreans are persistent and admire this quality in others.
Make sure you are understood - speak slowly and clearly and repeat any points that you want to emphasise. It may be worthwhile exchanging notes (minutes) after the meeting further ensuring that each other has been understood.
Gifts - corporate gifts (ties, pens, etc) are often exchanged after courtesy calls between senior managers.
Links and resources
Government, business and trade
Invest Korea – www.investkorea.org
Korea Communications Commission – www.ekcc.go.kr
Korea Importers Association – www.koima.or.kr/main.do
Korea Trade-Investment Promotion Agency (KOTRA) – http://english.kotra.or.kr
Korean Government – www.korea.net
Korean Institute for International Economic Policy – www.kiep.go.kr
Seoul Global Centre for foreigners – http://global.seoul.go.kr
News and media
The Chosun Ilbo – http://english.chosun.com
The JoongAng Daily – http://koreajoongangdaily.joinsmsn.com
Korea Herald – www.koreaherald.co.kr
Korea Times – www.koreatimes.co.kr
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.
Top Business Risks
Bilateral agreements
Australia has social security agreements with several countries that address the issue of 'double super coverage' for employees sent to work overseas. To take advantage of these agreements, Australian employers sending employees overseas to work must apply to the Tax Office for a Certificate of coverage.
For more details, please visit the Australian Taxation Office website.
APEC Business Travel Card Scheme
Managed by the Department of Immigration, the APEC Business Travel Card Scheme was developed to make travelling within the 21 APEC member countries much simpler and more efficient.
OECD Guidelines for Multinational Enterprises
Multinational Enterprises should be aware of the OECD Guidelines for Multinational Enterprises that provide voluntary principles and standards for responsible business behaviour in a variety of areas, consistent with applicable domestic laws. These Guidelines are endorsed and promoted by the Australian Government. For more information, go to the AusNCP website.
IP Passport fact sheets
These fact sheets outline foreign Intellectual Property (IP) regimes and some of the issues and challenges which may be faced by Australian exporters.
The current fact sheets are available on the IP Australia website.