04-25-2010 18:01
Tax, Visa Pose Hurdles for Foreign Entrepreneurs

A customer enters a Thai restaurant along Gyeongridan Street, Itaewon, in this undated file photo. Many restaurants serving authentic international cuisine, owned by foreign entrepreneurs, can be found in Itaewon. / Korea Times File
By Cathy Rose A. Garcia
Staff Reporter

While some say establishing a business in Seoul is becoming easier, there are still a handful of challenges facing foreign entrepreneurs.

For one, owners of restaurants that specialize in international cuisine are finding it difficult to hire foreign chefs. Only restaurants that are designated as "tourist restaurants" are allowed to hire foreign cooks, but some establishments complain that the Immigration Office does not have a clear policy.

Nehad Khamas, owner of Dubai Restaurant in Itaewon, experienced just how hard it was to get approval from the office to hire a chef who specialized in Arabic cuisine. When he opened the restaurant a year and a half ago, it took him four months before securing a visa for an Arabic chef from Syria.

"It was difficult because whenever we went to the Immigration Office to ask about getting a visa for a chef, they couldn't give a definite answer. They would just tell us to apply and wait. But we are operating a restaurant, we can't run it without a chef," Khamas told The Korea Times.

Khamas said many of his Arabic customers would only come to his restaurant if the chef is Arabic, to ensure that the food being served is "halal" or "allowed" under Islamic law. "When Arabic customers come to my restaurant, the first thing they ask, 'Is there an Arabic chef?' We have to have an Arabic chef because if we say no, they won't come in because they don't believe other chefs will know how to do halal food," he said.

The immigration office is also quite strict with the education requirements. "They said the chef should have more than five years of experience, a high educational background. But in the Arabic countries, most chefs don't have a good educational background," Khamas said.

The eatery, which can serve around 90 to 100 people, has become popular among the Arabic community. Khamas would like to hire another chef but expects to encounter more problems with immigration.

"Having only one chef for a restaurant that can serve 90 to 100 people is not enough. Sometimes I have to close early because our kitchen cannot handle the business... But if I want to hire another foreign chef, we also have to hire another Korean staff member and provide him with insurance. If we do apply for another chef, we're not even sure if the Immigration Office will approve it," he said.

This concern was echoed by Kevin Cyr, chef and owner of Chili King, a restaurant in Itaewon specializing in chili burgers. Cyr is planning on opening another restaurant and this time, he plans on applying for a "tourist restaurant" designation to be able to hire a foreign chef.

"Even if you have the 'tourist restaurant' designation, you have to jump through hoops proving that the person that you are hiring is doing a job that a Korean can't do. The funniest thing is that all depends on who you talk to at the Immigration Office. If you talk to one person, they say it's impossible, but the next day, you come back and another person says it's no problem. How frustrating is that? The rules should be simple," he told The Korea Times.

Cyr obtained a D-8 investor visa, which is given to foreigners who invest a minimum of 50 million won to start a sole proprietorship in Korea. While opening his business was relatively hassle-free, Cyr found some problems with the tax office's regulation requiring that he have a Korean sign a guarantee that he will pay his taxes.

"I'm allowed to bring my money here, but at the end of the day, even though by the law, I am 100 percent allowed to open my own business, but by having to have a guarantor, they're basically saying, 'no, you can't own it 100 percent.' It's basically saying I have to have a business partner," Cyr said.

Luckily for Cyr, he had a trusted Korean friend who agreed to be his guarantor, but he does not see why it is even needed. "I'm taking a risk by opening a business here in your country, but you don't trust me not to run away and to pay my taxes," he said.

Another persistent problem faced by foreign entrepreneurs is the language barrier.

"They don't take care of the foreign entrepreneurs. All the paperwork was in Korean. I would sign documents that I didn't even know what they were. They should at least have the documents in English," Khamas said.

For Cyr, his solution to the language problem was simple: hire a Korean interpreter to do the paper work and deal with the Yongsan District Office, as well as the tax and immigration offices. "Surprisingly, it was easy (to open the business), except for the language," he said.

Meanwhile, foreign residents who are interested in opening businesses in Seoul may get some much-needed help from the government.

The Seoul Global Business Support Center is now taking applications for foreign entrepreneurs and businessmen for its "foreign business incubation service." Three entrepreneurs will be given free office space for up to six months, as well as provided with consulting services on business, entrepreneurship and investment.

Kim Tae-hoon, who is in charge of the program, said the service was established to try to encourage more foreigners to start their own enterprises in Korea.

"Most foreigners in Korea don't know anything about establishing a business here... So we will help them start their own business through various support services," Kim said.