TOP TEN ERRORS OF COMPANIES IN THE KOREA MARKET
- Lack of market research. Selling in China, Japan, Malyasia, Singapore etc. is vastly different than selling in Korea. Get a good local market research study concluded by a local market research company.
- No Due Diligence or Poor Due Diligence. Read my posts on this issue. Listen to my Mother: JVs in ASIA; Doing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts.
- Register your trademarks. Your international filing is not adequate protection in Korea. Read my post on the issue at: Don't Just Trust Us: Trademarks in Korea
- Draft Korea-tailored contracts. Your international joint venture, distribution, OEM, NDA, agency, license, shareholder, O & M and like agreements are, often, useless in Korea.
- Think like a Korean. Koreans, often, are stubborn, rush into things too quickly, cut corners, don't honor agreements, save face by lying and in many cases lack even the most basic business ethics. As we know, Korean are, also, very nationalistic. These same characteristics make Korean's loyal friends, problem solvers, proud, goal oriented and often great partners. These days these generalizations may not be all that accurate, since many of the young in society are highly influenced by the West, however, these generalizations are, generally, true and can be utilized to your advantage.
- As my friends at a blog that motivated this post notes: "Don't be too polite. It can sometimes be misunderstood. Be terse, direct and make your point in simple words or actions especially during negotiations."
- If you are engaged in an OEM agreement, inspect the products prior to them being shipped and prior to payment. Don't hire my firm for its litigation services in Korea because of not heeding this simple advice. Get on a plane and inspect the goods or hire a local to inspect the goods.
- Have your agreements drafted in English and Korean. It will increase the costs, but will decrease the potential for a misunderstanding and the potential for litigation. Korea Licensing Agreements: The Slim Basics.
- My Mother's Advice: Carry an Umbrella in Korea in the Spring. I wrote about this in the post noted above. "Protect your company or client from the rain through a carefully drafted shareholder, O & M, non-disclosure/non-circumvention, technology transfer and license agreements and the like with liquidated damages, arbitration, and restrictive covenant clauses."
- My Mother's Advice: Don't Go Out Alone in Korea in the Dark. I wrote about this, also, in the post noted above. "Your company and client must have a lawyer or an experienced consultant familiar with the local market on retainer. The person should not simply be one of the many ubiquitous Korean consultants with local language skills. Often these individuals have vested interests that prevent them from being trusted advisor. Sometimes, these individuals have nothing more than local language skills and a good smile."
Am I missing anything?
Sean Hayes, IPG's Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com