Park addresses foreign businesses' grievances

President Park Geun-hye smiles at National Security Office chief Kim Jang-soo (unseen in the photo) at a meeting with senior secretaries in Cheong Wa Dae, Monday. / Yonhap

By Cho Mu-hyun

President Park Geun-hye is getting friendlier with foreign businesses operating here.

In the latest case, her administration has scrapped plans to increase the minimal capital requirement for foreigners looking to start business here from 100 million won to 300 million won.

The move came after Park met with foreign business leaders Thursday and listened to their complaints about the business environment here. The Ministry of Trade, Industry and Energy (MOTIE) recently planned to increase the minimal capital requirement, but decided to retain the current one after the meeting.

The ministry is currently putting the last touches to revisions to the law on foreign investment, something it expects to finish this month. It aims to put it into effect starting in June after the revision is approved by the National Assembly.

Overseas businesspeople, who’ve voiced strong opposition to the increase, are showing slight optimism to “the start of change.”

James Rooney, CEO of Market Force, who has been doing business in Korea since 1996, personally attended the meeting at Cheong Wa Dae and said Park’s stance was “very constructive.”

“Let’s give credit where it is due. I think the style she has demonstrated during the meeting was positive, much similar to previous President Kim Dae-jung,” said Rooney. “The conversations were very constructive. All sides believed there were being listened to.”

According to Rooney, the past two administrations — accounting for a decade — lost the way for dialogue with not just the foreign community, but also people in general. He said Park’s gesture was the start of change.

“The problem with the previous administrations was that they didn’t engage properly both emotionally and logically in economic development,” said the CEO. “Foreigners meeting with Park felt they were on a level playing field to make an emotional connection with the new administration.”

“You’re just shooting yourself in the foot if the new capital regulation had been passed,” said Bryan Hopkins, a professor at Sejong University business school.

The professor agreed with Rooney that the regulation would have had a bad effect on small- to mid-sized companies, businesses the new government has vowed to help.

“When a foreigner sets up a business elsewhere the first thing they look at is cost. They can go to Singapore; they can go to Myanmar and other Southeast Asian countries. The new regulation would have made them choose alternative markets that are friendlier towards starting business,” he said.

A ministry official directly involved in the matter defended the now discarded initiative.

“The ministry believed that considering the size of the Korean economy, 300 million won was the requisite amount businesses needed to function normally and contribute to the market,” he said.

The official said the government’s own survey drew the conclusion that most foreign businesspeople were self-employed, and moved out of the market as soon as they earned profits.

“Hong Kong is bigger than Korea. The U.S. is bigger than Korea. In any of these countries, they don’t have a minimal requirement,” retorted Rooney. “When an entrepreneur comes in, he will start small, and grow large and start hiring and open other business, which will ultimately help the Korean economy.”

Rooney stressed the need for Korea to engage more with the outside world to do better, and to do that the best way would be to connect with foreigners already here.