NEW YEAR POLL Frequent regulatory changes undermine Seoul's potential as global business hub

A job seeker looks through an information booklet during the 2025 Seoul Job Fair for Internationals at SETEC in Seoul, Nov. 20. Yonhap

By Jun Ji-hye

• Published Jan 1, 2026 12:10 AM KST

Poll shows workplace culture still discriminates against foreign employees

Seoul has potential to become an international business and financial hub, but that potential is undermined by frequent changes in regulations and a workplace culture that makes it difficult for foreign nationals to integrate, a poll showed.

The poll was conducted online with 258 foreign residents of Korea by Hankook Research on behalf of The Korea Times from Dec. 18 to 24, 2025, to gauge expats' perceptions of Korea's competitiveness as a global business destination.

According to the survey, 72 percent of respondents said Seoul is competitive as a global center for finance and business. Of those, 19 percent described the city as “very competitive,” while 53 percent said it is “competitive.”

By age group, respondents in their 30s recorded the highest share of positive assessments at 85 percent. Among foreign residents holding employment visas, 89 percent said Seoul is competitive, suggesting that its perceived strengths are also felt in day-to-day business environments.

Frequent changes to the regulatory environment were the most commonly cited obstacle to expanding foreign investment in Korea, at 28 percent. This was followed by a complex tax system and labor market rigidity, including strong unions, each at 17 percent.

Another 13 percent cited geopolitical risks, while 7 percent pointed to excessive criminal penalties for corporate executives.

Notably, respondents aged 50 or older, as well as those from North America, South America and Europe, picked frequent regulatory changes as a hurdle, reflecting heightened sensitivity to a lack of policy consistency.

These findings indicate that concerns over risk management continue to weigh on perceptions of the Korean market.

Marie Antonia von Schonburg, president and CEO of the Korean-German Chamber of Commerce and Industry, noted that many global firms recognize Korea as a key regional business hub, backed by industrial competitiveness and advanced infrastructure, but she also emphasized that stable and predictable policies are critical for long-term investment.

“Our recent exchanges with member companies and stakeholders underline the importance of policy predictability and regulatory consistency. Long-term investment decisions are closely linked to the stability and transparency of the regulatory, tax and labor policy framework,” she told The Korea Times via email. “While regulatory objectives are generally well understood, companies place particular value on clear communication, adequate transition periods and alignment with internationally familiar practices.”

She noted that constructive dialogue and alignment with global standards can help bolster investor confidence.

Regulatory risks for foreign investors were also highlighted by the World Bank. Priyanka Kher, a senior private sector specialist at the organization, noted that risks from government actions — including unpredictable regulatory and policy changes, as well as unequal protection under the law — can impede foreign direct investment (FDI) flows.

"Apart from impeding FDI flows, these risks can also impact the ability of countries to retain and expand investment. In some cases, they can lead to legal disputes where investors directly sue governments. These disputes are costly from both financial and reputational perspectives," she wrote on the World Bank blog.

Hiring foreign nationals

When asked about the most urgent steps Korean companies should take to expand the hiring of foreign workers, the largest share of respondents, 40 percent, cited the need to improve perceptions of employing international workers. This was followed by greater acceptance of cultural diversity at 26 percent, government incentives at 18 percent and regulatory easing at 12 percent.

Notably, 71 percent of respondents from Africa and 50 percent of those from Asia identified improved perceptions as a top priority. Among residents who have lived in Korea for more than 10 years, 51 percent gave the same response, indicating a prevailing view that hiring practices remain relatively closed and exclude foreign workers.

By age group, 53 percent of respondents in their 40s called for a friendlier environment for hiring foreigners, highlighting how mid- and senior-level personnel structures and internal communication cultures pose significant barriers for international employees. Younger respondents aged 18 to 29 most frequently focused on greater acceptance of cultural diversity, underscoring the importance of fostering corporate environments that embrace differences in language, nationality and culture.

Park Jong-pill, secretary general and CEO of the Korea Labor and Employment Service (KLES), noted that “improving perceptions toward hiring foreign workers” and “greater acceptance of cultural diversity” should not be viewed as separate issues but understood within the same context.

“Taken together, the two responses account for 66 percent, meaning about two-thirds of respondents see changes in corporate mindset and organizational culture, rather than institutional or regulatory support, as the most urgent task in attracting foreign workers,” he said. “The results indicate that while government support and legal or institutional reforms are important for the sustainable growth of Korean companies, internal communication and corporate culture are even more critical prerequisites.”

KLES is a semi-governmental public institution under the Ministry of Employment and Labor that provides comprehensive labor and employment services, including promoting stable labor-management relations, addressing employment discrimination and advancing workplace innovation.

Park underscored that the poll calls on the country to reflect whether discrimination based on nationality or race still persists in practice, despite constitutional principles and labor laws prohibiting it. He added that seniority-based systems and hierarchical, top-down corporate cultures may still be deeply entrenched in Korean workplaces.

“Addressing these issues requires establishing evaluation and promotion systems centered on capability and performance rather than background, as well as strengthening education and leadership training,” he said. “Since organizational culture and perceptions ultimately stem from leadership, meaningful change is only possible when top management and middle managers take the lead in clearly signaling that discrimination will not be tolerated and that workers will be judged by merit and results.”