Korea losing charm as investment destination
Satisfaction level plunges to 22%
By Park Si-soo
Foreign companies are increasingly unhappy with Korea’s business environment, casting a pall over the government’s efforts to spur the sagging economy by attracting foreign investment, according to a recent poll.
They said the nation’s tax system is the most problematic, especially due to lack of legal information available in English and other foreign languages and frequent tax code revisions, among other complaints.
Critics said this problem, if unaddressed, will serve as a stumbling block for the government’s goal of attracting more than $20 billion this year.
These complaints were identified in a survey of 307 foreign businesspeople here between last August and December by Invest Korea, a state-run investment promotion agency. Their overall satisfaction level stood at 25.4 percent, a sharp fall from 47.5 percent in 2013.
By segment, their satisfaction with tax services dropped to 22.5 percent from 30.5 percent in 2013. Satisfaction with the labor environment also fell to 22.8 percent from 33 percent. They still found room to improve in the field of intellectual property protection, marking 20.2 percent satisfaction, down from 23 percent.
Business location and logistics environment were the only segments that drew satisfaction over 40 percent.
Respondents said labor and financial environments are the most critical issues they consider when deciding on expanding investment.
Regarding tax issues, 25.7 percent of respondents complained about the lack of information available in foreign languages, while 23.1 percent vented frustrations about frequent changes to the tax code. Following this were long-lasting tax audits and demanding regulators (17.3 percent), a lack of information and a cumbersome process to appeal tax audit results (15.3 percent), unclear tax administration (13 percent) and a year-end tax adjustment system unmatched with their states of origin (12.7 percent).