Download South Korea: an overview

South Korea: an overview
The RBS group has been present in South Korea since
1979. Our Global Transaction Services (GTS) business
offers clients cash and liquidity management, trade and
supply chain finance, and commercial cards. Our services
are delivered through a dedicated team of local banking
professionals, who are supported by regional teams and
experts from across our global network.
So, however large or small your operations in South Korea,
we can offer the services and support to help you succeed.
Capital
Seoul.
Major ports
Busan, Incheon.
Language
Malay is the official language. English, Chinese, Tamil,
Iban.
Economic overview
Geography
South Korea, in sharp contrast to its neighbour North
Korea, is a modern industrialised economy. Since the end
of the Korean War in 1953, per capita incomes have risen
to nearly seventeen times that of North Korea and South
Korea is now one of the world’s top 20 economies 1. South
Korea’s economic success was initially built on an inward
looking model of close government involvement and
financial support, coupled with import restrictions. Since
the Asian financial crisis of 1997-8 however, South Korea
has moved to open up its markets to international
competition and foreign direct investment.
Seoul
Incheon
SOUTH
KOREA
Busan
GDP growth, typically around 5% from 2003-7 had fallen
to 0.2% by 2009 as a result of the global economic
slowdown 1. The South Korean economy bounced back
quickly as exports returned and the government introduced
a series of fiscal stimulus measures. GDP growth is
forecast to settle back to around 4/5% in 2011/12 3.
Economic indicators
1
2
2009
2010
Population
48,642,779
48,754,657
South Korea is in East Asia between the Sea of Japan and
the Yellow Sea and forms the southern half of the Korean
Peninsula. Around 83% of the population live in cities
and conurbations 1. Its major cities include Seoul (capital),
Busan, Incheon, Daegu and Daejon.
GDP
US$1.38 trillion
US$1.46 trillion
Seoul is far and away the biggest commercial centre with a
population of 10 million and a further 10 million in suburbs
around Seoul 2. There are also a number of important
industrial clusters around the capital, such as a shipbuilding cluster along the south east coast.
Unemployment 3.7%
3.3%
Inflation
2.8%
3%
Public debt
23.5% of GDP
23.7% of GDP
CIA World Factbook
UKTI: Doing Business in South Korea
% change
0.23
5.8
GDP per capita US$28,300
US$30,000
6.01
Exports
US$374 billion
US$466 billion
24.6
Imports
US$318 billion
US$418 billion
31.45
Source: CIA World Factbook
3
OECD Economic Outlook
-10.81
7
0.85
Business opportunities
Imports
Imports by industry (% total imports)
Imports by country (% share)
China
Fuel
Japan
17
28
US
48
15
28
Saudi Arabia
Machinery
Australia
Iron & Steel
Optical Equipment
3
Other
3
Organic Chemicals
16
3
9
5
Electrical
Equipment
8
6
Ores, Slag & Ash
11
Other
Source: CIA World Factbook, 2009
Source: International Trade Centre, Trade Performance HS, 2009
Exports
Exports by country (% share)
Exports by industry (% total exports)
China
Electrical
Equipment
US
24
24
23
Japan
Ships & Boats
Machinery
Hong Kong
55
Other
Vehicles
5
10
12
7
6
Fuel
8
5
Optical Equipment
10
11
Plastics
Other
Source: CIA World Factbook, 2009
Source: International Trade Centre, Trade Performance HS, 2009
South Korea has the fourth largest economy in Asia 2.
Per capita incomes are high and South Koreans are
sophisticated consumers with a wide knowledge of global
trends, fashions and technology. It is therefore an excellent
market for high quality consumer goods of all kinds. The
design market is strong and growing – Seoul was the World
Design Capital in 2010. With expenditure on education one
of the highest in the world, there are significant opportunities
in e-learning and language training. South Korea is also
committed to becoming a low carbon economy and there is
great interest in environmental products and services. There
are also significant opportunities for businesses dependent
on high bandwidth. South Korea has the highest proportion
of households with high quality internet access in the
world 2.
Financial information
Currency and exchange rate
Recent average 1,707 won = £1 sterling
International trade is usually conducted in US dollars.
Exchange controls
A minority of countries impose restrictions on the exchange
of their currency. The South Korean government does not
impose restrictions on exchange transactions.
Repatriation of capital
There are no restrictions on returning capital invested in
South Korea back to its country of origin.
Tax
The standard rate of VAT: 10%.
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Oanda.com
Contacts
UK contacts
UK Trade and Investment
1 Victoria Street
London SW1H 0ET
Tel: 020 7215 2471
www.ukti.gov.uk
UK government support agency dedicated to assisting UK
businesses to export. Provides sector and country specific
information and advice, trade fair and outward mission
participation and bespoke market intelligence services.
Embassy of the Republic of Korea
60 Buckingham Gate
London
SW1E 6AJ
Korean Chamber of Commerce
45 Namdaemunro 4-ga
Jung-gu
Seoul 100-743
Tel: 00 82 2 6050 3114
http://english.korcham.net/
The Korean Chamber of Commerce promotes trade
through its network of businesses and the organisation of
trade seminars.
Statutory requirements
UK regulations
The Department for Business, Innovation and Skills controls
the export of goods according to the nature of the goods
and their intended use, and also their intended destination.
For current export controls refer to: www.bis.gov.uk
Tel: 020 7227 5500
http://gbr.mofat.go.kr/eng/index.jsp
Import restrictions and licences
Provides access to consular services, travel information,
networking opportunities and a database of sector specific
trade contacts in South Korea.
Most goods can be freely imported but restrictions apply
to some products. Further information may be obtained
from the Market Access Database (http://madb.europa.eu/
mkaccdb2/indexPubli.htm).
Local contacts
Samples
British Embassy
Sejung –daero 19-gil 24
Jung-gu
Seoul 100-120
Tel: 00 82 2 3210 5500
www.ukinrok.fco.gov.uk/en
Importers generally seek to avoid paying duty on goods
entering the country solely for marketing purposes. Samples
with no commercial value may be imported duty-free.
A deposit is required for other goods that may be
refundable if the samples are re-exported within six months.
Marking of goods
The embassy has a dedicated team, providing general
and sector related support for UK businesses wishing
to do business in South Korea. The team can provide
information, guidance and access to business contacts.
Country of origin labelling is required for commercial
shipments entering South Korea. Further information
may be obtained from the Korean Customs Service
(http://english.customs.go.kr)
Korean Trade-Investment Promotion Agency
13 Heolleungno
Seocho-gu
Seoul 137-749
Shipping marks
Tel: 00 82 2 3460 7114
http://english.kotra.or.kr/wps/portal/dken
KOTRA promotes trade through its business network and
international trade fairs.
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Oanda.com
The country of origin and destination port should be
included.
Packing materials
Hay and straw are prohibited. South Korea has
implemented the IPSM15 phytosanitary controls on wooden
packaging. All wooden packaging must carry the required
certification or marking.
rbs.co.uk/international
Duties
Commercial invoices
Most duties are assessed on an ad valorem basis, on the
landed cost of the goods. The Market Access Database
(http://madb.europa.eu/mkaccdb2/indexPubli.htm)
provides comprehensive tariff details.
There is no specific format, but the HS code and the terms
of sale (Incoterms 2010) should be specified.
Insurance
This is usually arranged in Korea at the request of the
importer. Exporters may wish to obtain seller’s interest
insurance.
Documentation
Special certificates
Countries often require importers to obtain prior
authorisation to bring certain products into the country.
The South Korean government requirements include an
inspection certificate for pharmaceuticals, medical supplies
and cosmetics and possibly for electrical equipment and
machinery.
Certificates of origin
A certificate of origin is a document stating in which
country goods originated. There is no general requirement
to provide a certificate of origin.
Consular fees
Some countries will charge a legalisation fee for documents
such as a certificate of origin. If requested to have
documents legalised, South Korean officials will generally
do so for a nominal fee.
Consular invoices
A consular invoice is a document certifying a shipment
of goods and shows information such as the consignor,
consignee and value of the shipment. A consular invoice is
not required in South Korea.
Bills of lading
A bill of lading is a document issued by a carrier to a
shipper acknowledging receipt of goods to a named place
of delivery. As some countries specify the type of bill of
lading that will be acceptable it is important to check with
the relevant customs authority. In South Korea a bill of
lading may be ‘To order’.
To find out more about how RBS can support your
business needs in South Korea, please contact your
relationship manager or call 0800 210 0235.
This marketing communication is for information purposes only and does not constitute a binding obligation on The Royal Bank of Scotland plc or The Royal Bank of Scotland N.V.
The Royal Bank of Scotland plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB.
The Royal Bank of Scotland plc is authorised and regulated in the United Kingdom by the Financial Services Authority. The Royal Bank of Scotland N.V. is authorised by De Nederlandsche Bank and regulated by the Autoriteit Financiele Markten (AFM) for the conduct of business in the Netherlands.
The Royal Bank of Scotland plc is in certain jurisdictions an authorised agent of The Royal Bank of Scotland N.V. and The Royal Bank of Scotland N.V. is in certain jurisdictions
an authorised agent of The Royal Bank of Scotland plc.
567-0811gUK
July 2011