Korea

Country starter pack
Business practicalities in Korea
77
and learn English, and the possibility to transfer to the
company’s home office or another foreign branch office.
Due to the significant differences between Australian and
Korean employment practices, it is best to consult Korean
employment agencies before hiring.
Work permits and visas
Under the Korean Exit and Entry Control Act, a foreigner
who wishes to reside in Korea must have a visa which
allows an appropriate period of stay (theoretically not
less than 91 days but normally six months or longer). If a
visa is granted for 90 days or less, it cannot normally be
extended while the foreigner is in Korea. The extension
requirements are waived for a foreigner who has
invested at least US$500,000 under the FIPL with the
employment of five or more workers.
Foreigners seeking employment in Korea must have a
work visa, and may only work in places designated by the
local or district Immigration Office. If they wish to change
work places, prior permission must be received from the
local Immigration Office. The appropriate visa status is
determined on the basis of the activities to be engaged
in by the foreigner. The first alternative is a Technology
Inducement Contract (TIC), which has been reported
to the relevant ministry under the FIPL. Under this
arrangement, employees of the foreign licensor would
enter Korea for work under the TIC. Second, expatriates
may be sent to Korea for work at a foreign entity’s branch
office. Third, expatriates may be hired by a Korean
company (foreign invested company or join ventures
under the FIPL). Certain types of visa status appear to
be most suitable for the expatriates who enter Korea. A
foreigner holding any of these types of visa status may
stay in Korea for a period of up to four years.
Managing a Korean team
Australian businesses should develop and adapt their
management styles to accommodate local preferences
and to be as appropriate for the local context as
possible. Social hierarchy and loss of face are key issues
for Australian managers to be aware of. They should
also encourage social interaction in the workplace.
Management techniques that are confrontational and
assertive – such as public reprimands or criticisms –
should be avoided as they can easily lead to disrespect and
uncooperative work practices, which in turn negatively
impact on employee commitment.
Workplace managers in Korea generally expect to be
obeyed – and in almost all circumstances they are. The
strong culture of subordination to superiors is consistent
with Confucian tradition, which stresses qualities like
obedience, loyalty, and hierarchy. Leadership also requires
an appreciation of the Korean concept of inwha, which
stresses harmony between people of equal or similar rank.
A successful manager will foster a working environment
free, or largely free, of open conflict and confrontation.
The hierarchical nature of Korean society means lowerlevel
employees will generally be reluctant to question
authority or even to provide feedback. However, in some
circumstances there can be a consensus-style decisionmaking
process that can give employees a sense of
participation in management. Australians, Americans and
other foreigners in management roles may be pleased to
experience variations on these customs, particularly from
female and younger Koreans who can be enthusiastic
about working for foreigners because they are perceived
to be more liberal in their outlook.
Australians managing Korean employees should be
prepared to make some other cultural adjustments. For
example, they will be expected to take a much closer
interest in the personal lives and welfare of workers than
would be expected back home. Don’t be surprised when
your staff arrive before you and leave after you – they will
do that no matter what time you come and go as a way
of showing their dedication. Finally, as discussed earlier
in this guide, socialising with workers is fundamental in
Korea, and it is part of the manager’s role to facilitate and
pick up the tab for much of this activity.
5.6 BANKING IN KOREA
The banking system in Korea is as advanced as most
Western countries, but is also relatively simple and
user-friendly. Most of the well-known banks have
service representatives who speak some English, and an
increasing number of banks are offering internet banking
in English or accounts specifically tailored to expat needs.
ATMs of major banks in Korea generally have an English
option.
Financial institutions
Financial institutions in Korea are classified into the
following broad groups: banks, non-bank financial
institutions, financial investment services companies,
and financial holding companies. According to the
Financial Investment Services and Capital Markets Act
of 2009, there are six types of securities and investment
management service providers: dealers, brokers,
discretionary and non-discretionary investment advisers,
collective investment managers, and trust service
companies. These businesses are collectively referred to
as financial investment services companies.
Banks are classified as either commercial (general banks
handling long and short term finance) or specialised
(these have a specific purpose such as the Export-Import
Bank of Korea which provides support for export and
import transactions and overseas investment projects).
Foreign banks are allowed to establish subsidiaries or
branches to engage only in commercial banking. But
foreign banks cannot operate as specialised banks. There
are more than 50 foreign banks operating in Korea
including 39 branches and 17 representative offices.