Exporting to South Korea

South Korea is a high-growth market for UK exports. In 2018, the UK exported almost £10 billion of goods and services to the country, up 9.7% on the previous year. In 2017, almost 7,000 British companies exported to South Korea.

Demand for UK goods

The South Korean public has a taste for British culture and a respect for UK goods.

Many well-known UK brands like Standard Chartered, Jaguar Land Rover, British Airways, Lush, Boots and Burberry are already selling in South Korea.

Government policy

President Moon’s focus on emerging technologies and the Fourth Industrial Revolution presents opportunities in sectors of UK strength.

Foreign direct investment (FDI)

FDI from the UK in South Korea was over £7 billion in 2017, 14% higher than in 2016. The South Korean government is keen to encourage foreign investors, making efforts to ease regulations and provide incentives for direct investment.

Ease of doing business

5th

out of 190 countries, World Bank 2019

Currency

South Korean won

Business languages

Korean

You may need a translator

GDP per capita

$31,350

2018, IMF, UK is $42,560

Economic growth

2.7%

2018, IMF

Time zone

GMT +9

Opportunities for exporters

There are export opportunities in a range of areas including technology, automotive, fintech, offshore wind and life sciences.

Doing business in South Korea

Preparing to export

VAT

South Korea has a VAT rate of 10%. Cultural items like newspapers, books and magazines may be exempt.

There are special tax exemptions under the FDI incentives scheme. For more information, see InvestKorea.org.

Standards and regulations

The Korean Agency for Technology and Standards (KATS) administers and monitors Korea’s industrial standards.

Packaging and labelling

Country of origin labelling is needed for commercial shipments entering South Korea.

The Korean Customs Service publishes a list of the country of origin labelling requirements.

Intellectual property (IP)

As a first step, we advise you to speak to an intellectual property lawyer if you think you need patent protection when exporting.

You should register your patents and trademarks with the Korean Intellectual Property Office (KIPO) before you commit to deals with South Korean companies. Read guidance on protecting your intellectual property in South Korea.

Protecting your business

Routes to market

A long-term commitment to the market will pay dividends here. Successful market entry strategies include relationship building, adaptation of your offer to Korean tastes and commitment to visiting and exhibiting in the market.

Routes to market which may work well for you are:

  • e-commerce - South Korea is a technologically advanced consumer economy. It is the leading market in the world for e-commerce sales, so selling via an online marketplace or website could be an excellent way into the market. DIT can suggest online marketplaces to help you get started. DIT’s E-Exporting Programme can also help
  • using agents and distributors - appointing an agent or distributor can overcome language and cultural barriers. You should support your local representative with frequent visits and regular updates, particularly in the first 12 months.

  • establishing a local office – it’s recommended that you trial the agent or distributor route before establishing a local office. Once you’re operating successfully, a local office may be an effective way to gain greater control over your operations.

The website of Invest KOREA, the national investment promotion agency, is a good source of further information. It supports the establishment of foreign businesses in South Korea, and has a London office.

Business culture

South Korea is modern and business-friendly, but there are some cultural differences to be aware of:

  • The numerical system counts differently from the UK. Make sure all numbers are written down and fully understood in negotiations
  • South Korea has a culture of dynamic, rapid action. Be prepared for expectations of fast delivery and last-minute alterations
  • The preferred greeting style in business is a slight bow followed by a handshake

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.