Time-consuming audits, too many regulations and semi-tax levies, rigid labor market and anti-business sentiment make Korea a difficult place to do business, and foreign investment won’t likely pick up in Korea without dramatic actions to improve business environment, foreign entrepreneurs said.

“There are just too many government audits. It feels like we spend the whole year preparing for government tax, environment, or other audits,” said a member of the foreign business chamber.

“The first thing I was asked to do from the government upon starting business here was to donate money for local merchants. It wasn’t a suggestion, but a demand. Instead of all the rhetoric, the government must do away with the practices unique in this country to make environment for foreign business friendly,” said a CEO of a foreign enterprise.

Foreign businessmen poured out complaints in their meeting with Prime Minister and acting president Hwang Kyo-ahn on Monday. Hwang met with foreign investors to appeal for confidence in the Korean economy amid protracted vacuum in leadership as scandal-ridden president is awaiting impeachment trial. Twenty-two businessmen attended the meeting, including James Kim, chairman of the American Chamber of Commerce in Korea (AMCHAM) and head of GM Korea and John Schuldt, President of AMCHAM Korea.

What worried them more was that environment could get worse.

“The talk of hike in corporate tax rates is the biggest worry. Many foreign companies are hesitating investment here due to tax factor,” said another corporate head.

Presidential-hopefuls from the opposition have been suggesting higher taxes for large companies and rich individuals to ensure more funding for social welfare.

“Lack of clarity in public policy also makes investment difficult,” another attendee said.

Hwang said the government was mulling various incentives to draw foreign investment such as exempting taxes for new technologies. He added that Korea could be a gateway to other markets as the country is rich with free trade deals and now working on to include China, Israel, and Ecuador to the list.

By Kim Jung-hwan and Kang Young-woon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]