Top Ten Mistakes of Companies Doing Business in Korea

Our law firm has worked with foreign clients of all shapes and sizes doing business in Korea. Surprisingly, we see many of the same issues with our multinational clients as with our SME clients, so we drafted this post.

TOP TEN ERRORS OF COMPANIES IN THE KOREA MARKET

1. Lack of market research. Selling in China, Japan, Malaysia, Singapore, etc. is vastly different than selling in Korea. Get a good local market research study conducted by a local market research company.
2. 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.
3. 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
4. Draft Korea-tailored contracts. Your international joint venture, distribution, OEM, NDA, agency, license, shareholder, O&M, and similar agreements are often useless in Korea.
5. Think like a Korean. Koreans are often stubborn, competitive, jealous, rush into things, and save face by not being direct. As we know, Koreans are also nationalistic. These same characteristics often make Koreans 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.
6. Don’t Be too Polite. As my friends at a blog noted in this post: “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.“
7. Inspect Products Prior to Being Shipped. If you are in an OEM agreement, inspect the products before they ship and before you pay. Don’t hire my firm for litigation services in Korea because you didn’t heed this simple advice. Get on a plane and inspect the goods, or hire a local to inspect them.
8. Have your agreements drafted in English and Korean. It will increase costs, but it will reduce the potential for misunderstanding and litigation. Korea Licensing Agreements: The Slim Basics.
9. Follow 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.”
10. Follow My Mother’s Advice. Don’t Go Out Alone in Korea in the Dark. I also wrote about this 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 a trusted advisor. Sometimes, these individuals have nothing more than local language skills and a good smile.”

Am I missing anything?

Sean Hayes

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law for our litigation services.

If you would like a consultation with an English-speaking lawyer in Korea, please schedule a call at: Schedule a Call with an Attorney.