Korea
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Country starter pack<br />
Getting started in <strong>Korea</strong><br />
25<br />
• Getting paid in other currencies, which can expose<br />
you to foreign exchange risk and affect profit margins<br />
• Greater difficulty accessing finance, as Australian<br />
banks are often reluctant to accept overseas assets as<br />
security for loans<br />
• A longer timeframe to recover the upfront costs of<br />
establishing operations, which can reduce the cash flow<br />
and working capital available for domestic operations.<br />
Adequate funding will be critical to your success, and<br />
having a detailed financial plan is crucial. You may be<br />
eligible for financing from a variety of sources in Australia<br />
– depending on the nature of your business in <strong>Korea</strong>. Your<br />
financing options could vary according to whether you are<br />
exporting, importing or investing. A wide range of funding<br />
options exists, with various grants, venture capital, and<br />
equity sharing deals increasingly commonplace. However,<br />
banks remain the easiest and most approachable source<br />
of funding, with most of them offering tailored services.<br />
Your existing bank manager may be your best first port<br />
of call.<br />
Venture capital could be an attractive alternative<br />
financing vehicle if you are comfortable with a third party<br />
taking an equity stake – and a share of the profits – in<br />
your business. As a first step to research the venture<br />
capital market, go to the Australian Private Equity and<br />
Venture Capital Association Limited website at<br />
www.avcal.com.au.<br />
Government assistance — both federal and state – is<br />
available to Australian businesses wanting to expand<br />
overseas, especially exporters, through a number of<br />
grants, loan facilities and reimbursement schemes. These<br />
include Export Finance Insurance Corporation (Efic) –<br />
the Australian Government’s export credit agency, go to:<br />
www.efic.gov.au; and the Export Market Development<br />
Grants (EMDG) scheme, administered by Austrade.<br />
Full information on EMDG can be found at:<br />
www.austrade.gov.au/EMDG.<br />
Individual state and territory government websites also<br />
contain information on what financial assistance they can<br />
offer. Other sources of finance you could consider early<br />
on include:<br />
• A joint venture arrangement with a trusted partner in<br />
<strong>Korea</strong><br />
• Receiving an equity investment from a sophisticated<br />
individual investor or ‘angel investor’.<br />
Risks<br />
Your research into any overseas market, along with the<br />
opportunities, should also include careful assessment<br />
of the risks associated with doing business there. While<br />
Asia presents Australian businesses with numerous<br />
opportunities for growth, going offshore entails increased<br />
risks that need to be identified, managed, and reduced as<br />
far as possible. Your business’s risk management strategy<br />
also has to include thorough due diligence.