South Korea’s home-grown barriers to business

30 September 2020

South Korea is experiencing a steady decline in its economy. This can be attributed to falling foreign direct investment, suggesting that this region is no longer as attractive to investors as it was in the past. One of the biggest barriers is that Korea currently has a high tax rate and a convoluted tax system. This means that business owners of small and medium-sized companies are unwilling to increase their revenue size. South Korean companies also face a high inheritance tax (second highest in the OECD), which can hinder company continuity.

Korean businesses also face excessive regulations that limit operating hours and obstruct startups and non-traditional ways of doing business. Labour unions are also highly active and frequent strikes and inflexible labour regulations have created major production and administrative costs for companies. Frequent policy changes and inconsistencies after each change of government also create further issues. Finally, the general hostility towards businesspeople in South Korea (with the majority of adults viewing Korean businesses as unethical) creates another barrier for businesses in this region.

Read the full article here on the Asia Times website.

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