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Starting A Business In Korea

Korea Business Informational By Ahn Sehoon

Ahn Sehoon is the manager at Seoul Global Center in Korea.   The Seoul Business Agency was established to promote and develop industries in Korea.  In addition, it provides comprehensive and systematic support to SMEs(Small and Medium-sized Enterprises) located in Seoul.”   The Seoul Global Center business team is operated by the SBA, on behalf of the Seoul City Government.

Recently, Mr. Ahn spoke at one of their business meetups about starting a business in Korea.  He spoke very candidly to the audience about what it takes to successfully open a business in Korea.

I asked if he would be willing to share the insights he provided on that day for foreign startups who couldn’t attend.  The following is what he shared with the audience.

Seoul Global Center Meetup Discussion

I’m going to tell you some of the things that you know so well, but you’re overlooking. It may not be lovely to hear, but I hope you’ll think it over.

In recent years, many foreigners look for opportunities in Korea.  But the reality is it’s not as easy as you may think. There’re many regulatory requirements and cultural differences.  In addition, there are language barriers which you will face and must overcome. These things will remain the same in any country you go, correct?

Focusing on these obstacles will change nothing.  Can I share with you something that may comfort you?  Do Koreans feel comfortable in every situation when they run or start a business?  I guarantee you, almost every Korean, just like you, doesn’t know where to start, what to do, where to go and asks for help in the beginning.

Are you relieved now?  My goal is to be with you and support you with all my heart for your business in Korea.

I meet with a lot of foreigners, and the impression that I get during their business consultation is that they don’t know what they want to do, but they ask me how to start a business and want to know about the procedures.

They may think if they learn the proper procedures, this is the key to business.  Do you think your business will be successful right after you set up your business?  Can you succeed in business with only learning the procedures? I don’t think so.

People in Korea are often said to be very diligent and smart.  If you look back in history at the Korean people, you’ll see some of them were diligent and smart, and some of them weren’t.

It’s a well-known fact that the Korean economy has grown dramatically.  Since the Korean War in 1953, Korea’s GDP (Gross Domestic Product) existed at the bottom of the market.

However, in just 65 years, Korea’s GDP has risen to 12-13th in the world.  I’m a Korean citizen, and I can’t believe this country has grown so fast. When I was young, I wished for Korea to be as advanced and prosperous like the U.S. and other European countries.  Now, I think Korea has achieved this goal to some degree.

You have chosen Korea as the land of opportunity, so grab the opportunity and work diligently and smart.

Seoul Global Center Startup Business School Class
Ceremony of the 2nd Start-up Business School in 2018.

Here are three tips to assist foreign startups in Korea.

First, learn the language!

If you become fluent in Korean, I think it’s equivalent to earning at least tens of millions of won a year in a potential income perspective.  The better you communicate in Korean, the more chances you will have. If you are good at speaking, you can find information on the Internet quickly, correct?

There will be fewer worries to be defrauded and fewer mistakes or miscommunication. But more than that, it’s easier to find Korean partners in business relationships and build trust. You will understand the culture and people better by learning Korean.

As you may have noticed, there is a concept called ‘we, 우리’ in Korea. It’s hard to get into an organization or a group, but once accepted into the group, you’ll gain unlimited trust and support.  I hope you learn Korean and respect Korean culture. To be honest, I know there are some people who can speak Korean better than me. I have to learn Korean harder.

Oh, and I admit there will be others who ignore you, or who are rude or want to use you while staying in Korea.  Try to avoid these types of people who I believe are originally bad people. I hope you don’t think that some of these people represent Korea, but look for opportunities to interact with good people.

Second, do your research!

It doesn’t matter if a big company wants to expand its business in Korea.  Because they hire a Korean employee for the research. But it does matter to a small business startup like yourself.

Your main interest can’t only be about business procedures such as ‘How to start a company, how to open a restaurant, how to import and export.’  I’m sure some of you are thinking about doing business just as I mentioned. But have you decided which items to sell? And did you do the market research?

Eight out of ten people come to us without thinking their business idea through, and people with this kind of inquiry never do business.  Even if a business is able to open, it becomes dishonest and closes. This is the worst case. You make money by reducing unnecessary expenses, yet you’re not in compliance with Korea’s business requirements.

This is not to discourage you.

Everyone seems to have an illusion that they will be successful when he or she starts a business.  Even Korean people are forced to close their business! So, you should prepare to face difficulties in your business rather than the possibility of success.

Survey your products/services, do market research and thorough analysis are mandatory for building a successful business.  It won’t be too late to check the procedure later. Some of you may not be familiar with chopsticks, 젓가락. But would you go hungry because you don’t know how to use chopsticks?  Or would you learn how to use them to eat the delicious food in front of you? The same goes for business.

Also, many of you want to meet foreigners who are successful in Korea.  You might be doubtful if they exist in Korea. But there are foreigners in Korea who are successful.  Of course, there is. But the rich don’t reveal that they are rich. They don’t want to let you know their strategy.  That’s their weapon! That’s why you can hardly find any information about them.

Third, investment, funding, etc.

Many foreigners ask us questions like: How can I get financial help or support from the Korean government?

Yes, you can get support if you have a very special and unique business which will produce lots of employment or contribute greatly to Korea.  But to be honest, it’s not easy even in this situation.

10 out of 10 people ask if there is support from the government level.  They don’t ask about loans, but for funding. I’d like to ask people why do you think this way?  Why should the Korean government support you financially? Because you are a foreigner? I’m telling you, it’s not going to happen, and you should never expect it.  The Korean government is not a treasure chest.

Another question I get asked: then, does the Korean government give special benefits to Koreans?  Of course, there are benefits Korea provides to Koreans. Is it because they are Korean? Nope.

The reason is that Koreans are doing business in Korea and paying taxes to the Korean government.  The government expects Korean small businessmen to make more money and pay taxes in the future. Also, because Koreans build credit by bank transactions in Korea and provide collateral property for the loan.  Can a Korean who has a low credit rating and no collateral borrow money from the bank? No.

If you were a bank, are you going to invest in a business which products are not very good?  It’s not because you’re a foreigner, but because you don’t have credit or collateral. Investors look for high return investment opportunities.  It’s like good food if your food smells good people will come. If your ideas and products are good, people will invest in your idea.

I hope this information has been meaningful and useful.

Good luck in your business endeavors and daily living.

About the Author:

Ahn, Sehoon is the Manager at Seoul Global Center, Seoul Business Agency in South Korea.  He majored in Business Management and has worked for SBA since 2002.  With ten years of experience in Marketing in the Fashion Industry and Game/Character in the Animation Industry, etc.  He has over five years of experience in supporting and providing consulting on the Business Environment in Korea, Start-up business School, and Idea Audition for the Start-up Visa.

Visit the Seoul Business Agency website for more information on their organization and programs.

Seoul Global Center
Website | Facebook | Email

Written by: Ahn Sehoon

Edited by: Erica Dozier

Looking for related topics check out:

  1. Path To Obtaining A Startup Visa In South Korea
  2. Startup Assistance in Seoul
  3. Platform for Entrepreneurs: Seoul Startups
  4. Startup Visa Intellectual Property Rights Presentations
  5. Small Business Interview: Brandon Walcutt, Kohsi Design Centre
  6. How I Chose A Technical Bootcamp

Need a reference for later?  Why not Pin it!

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How To Stay Warm During Winter In South Korea

Breaking Down Cultural Barriers In Seoul South Korea

No Heat & No Flannel Pajamas!  Lesson Learned.

Since, the weather keeps reverting, rain and snow in some parts of the United States when it should be getting warmer outside, I want to go back to something that happened during my first Winter at Hankuk University dormitory I forgot to post.

My heart went out inside my dorm room.  At first, I thought I just needed to let the room heat up.  The ondol floor heating typically takes four hours too warm a room, which is still something to this day I don’t like, but its customary tradition, so I understand.  After waking up in the middle of the night and it was still extremely cold inside the dorm, I realized something was wrong.

Where was my heat?

I went and took a look at the pipes underneath my bathroom sink.  I watched a YouTube video on floor heaters in Korea and it suggested to check the pipes before you call the building maintenance.  Everything looked normal to me, except I’m not a plumber so I couldn’t tell even if there was something wrong.  I turned one of the knobs in the opposite directions because I thought, hoped, prayed, that maybe somehow it had gotten moved while I was taking a shower.

The travel clinic nurse warning of Tdap briefly replayed in my head as I touched the faucets and sink.  I walked back into the room and place my hand on the floor.  I didn’t feel anything different.  I decided to wait an hour and see if the heat circulation improved.

After snuggling back into the covers I forgot about the heat and fell asleep.  This turned out to be a larger problem than I first believed when I woke up the next day, and the heat was still out.  I wasn’t sure what the problem was, I hoped the pipes didn’t freeze.

Before I researched ondol floor heating I didn’t know you should always leave your floor heating turned on, (low setting) so that your pipes don’t freeze.  Since I’m not from the east coast, I’m a California girl for those of you who don’t know, and I’ve never experienced a real Winter I didn’t understand the rules.  I had turned off my heater one day when my downstairs neighbor had the floors feeling like I was stepping on hot coals.

I sent an email to the campus administrative office and received no reply.  Frustrated I posted a Facebook rant to one of my living in Korea group’s asking what I should do?  After many opinions and comments, some not so helpful, I was left with only having posted a rant with no real solution to my problem.

I called my cousin and asked his opinion and he told me to go ask the next door neighbor.  The only problem was that my next door neighbors were two girls from China.  They didn’t speak any English and I hadn’t made friends with them.  In fact, I didn’t speak to any of the other residents living in the dorm.  I did know a girl who was in my first Korean language program class before I was transferred, but I wasn’t in the class long enough for us to become friends.

I gathered up the courage to go ask my next door neighbor?  She stared at me and waved her hand back and forth.  I didn’t know if she meant no she didn’t have heat, or no she didn’t understand what I was asking.  After typing my question into Google translate and her finally understanding what I was trying to ask, we both concluded that neither of us had heat.

It wasn’t anything that I had done or anything that I could fix.  In total, my heat was out almost the entire month of February.  It turns out that it was incredibly bad timing and the building heater broke.

In case anyone is interested here are some of the helpful tips that I received from my post on Facebook and also what I incorporated into my weekend routine to stay warm.

Helpful Tips:

A common practice other expats suggested is to purchase extra thick blankets during the Winter, buy wool socks, and wear flannel pajamas.

Keep with the Korean tradition and sleep on the heated floors.  Tip: For use when your heat is working.

Buy hand warmers and hot packs, place them in your pockets to keep warm.

Eat soup of any kind for breakfast, lunch, and dinner (my favorite is the beef porridge soup).

Go to your nearest coffee shop or cafe and hang out for a couple of hours and enjoy the free heat and wi-fi.

Truly, the most helpful tip I believe is learning how your heating system operates before it becomes a dire situation and you’re posting a message on Facebook.

If you liked this post check out my other posts on:

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Let me know in the comments what are some techniques that you use to stay warm during the winter?

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Startup Visa Intellectual Property Rights Presentations

Gentle Monster, Los Angeles, CA, Korean Eyewear Brand

Intellectual Property Rights Presentation

After completing the Oasis Four class I was sent an email alerting me to the upcoming Oasis-One class.  The class consisted of a two-hour orientation that would be held on Friday, May 12, 2017, and two weekend classes that would be held from 9:00 a.m. to 5:00 p.m. the following Saturday and Sunday.

I submitted my application on the Korea Invention Promotion Association website along with the necessary identification requirements.  On the first night of class, I got lost trying to find the correct subway exit.  This was my first trip riding Line 2 subway, to the Gangnam station exit.  Usually, the farthest I traveled on Line 2 was to Itaewon where I visited the Foreigners market.

Luckily, I had obtained contact information from one of the attendees in the previous Oasis class.  I called and asked her for directions then headed back to the subway station.  After finding the correct exit I walked to the Korean Invention Property Association building located about three blocks from the subway.

During the two hour orientation we introduced ourselves to the rest of the class and the presenter.  The presenter gave us a brief introduction about her life in South Korea and then presented a powerpoint presentation with helpful tips on thriving in the Korean business culture.  After her presentation, we were informed that we would have different presenters during the weekend classes.

Day 1 ~ Saturday Weekend Class

Our first presenter turned out to be a lawyer that practiced law not only in South Korea, but previously worked as a patent attorney in the United States.  It became an extremely helpful session as he used real-life cases to inform us about Creating Ideas For Inventions, Overview Of Intellectual Property Rights, and Understanding Patent Institutions.

Day 2 ~ Sunday Weekend Class

On the second day of class, the weather was rainy and windy.  It was typically a day I would spend sitting on the couch watching a Lord of the Rings marathon and eating junk food.  However, after signing the attendance rooster we listened to the presenter as he discussed Understanding Patent Specifications.  We had a midday lunch break before the afternoon session began.  I went to a great Indian restaurant nearby and had a chicken curry dish.  Again, I wish I had taken a picture of both the name of the restaurant and the dish.  A different presenter took over the afternoon session and presented on the Basics of Patent Information Search.

Lastly, the director of the program, called us, one by one up to the front of the class and we were presented an embellished dark blue horizontal folder with our Oasis 1 completion certificate.

Overall, the class was very informative for any foreigners who wish to start a small business in South Korea.  I enjoyed the free lunch provided during the weekend sessions, however, the best part of attending the training was being able to network with fellow entrepreneurs.

Patents and Trademarks Information:

Korea Intellectual Property Rights Information Service

Korea Intellectual Property Office

WisDomain Global

Have you started a small business overseas, or in South Korea?  Would love to hear your thoughts on this incredible journey in the comments down below.

If you want to read more about the startup business scene in South Korea check out my posts on:

  1. Entrepreneur Korea Interview
  2. A Platform For Entrepreneurs: Seoul Startups
  3. Starting A Business In Korea
  4. Digital Marketing: Small Business Strategy​
  5. Small Business Interview: Brandon Walcutt, Kohsi Design Centre
  6. Where To Buy Korean Food
  7. Path To Obtaining A Startup Visa In South Korea