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Country Commercial Guides for FY 2000: Korea Report prepared by U.S. Embassy Seoul, released July 1999 Note*

CHAPTER IX. BUSINESS TRAVEL

Business Customs

It is imperative that any American doing business in Korea realizes that Seoul is not Los Angeles. Every year Korea becomes more and more modern, but it is important to recognize that modern does not equal Western. Koreans will not expect you to be an expert on the nuances of their culture, but they will appreciate a show of interest in matters that are important to them. Koreans generally appreciate a foreigner's effort in expressing a thank you (gam-sa-ham-ni-da) or a hello (an-yang-ha-say-yo) in the Korean language.

Though Koreans have transitioned greatly into Western society, the traditional ways of thinking in many areas are still practiced. Koreans have a great respect for the family and hierarchy. Extended families (i.e. parents living with middle-aged married "children" and their grandchildren) are still commonplace, although this is rapidly changing. In the majority of Korean households, the father is the primary bread winner, while the mother stays at home. The social concept, economic necessity, and cultural desire of a double income family are still in their infant stages in Korea, although this is rapidly changing in the face of changing economic times. Though fathers are the primary income earners, in the majority of cases, salaries are entrusted to their wives, and most day to day consumption decisions are at the discretion of the female spouse. US companies may wish to take into consideration these traditional family roles when marketing to Korean consumers.

Even though Korean attitudes are making incremental changes and women are making progress, women professionals at the highest levels are still very rare. The majority of working women, many with top university degrees, are still relegated in Korean companies to secretarial jobs, assembly work positions, or educational work. Many qualified women welcome the opportunity to work as a professional with a foreign company whose attitudes toward gender equality and professional respect and responsibility prevail.

Koreans still have a great respect for anyone senior in age, and intuitively establish their hierarchical position relative to others based on age. Indeed, one of the fundamental principles of the Korean language is based on the plethora of verb endings which indicate the level of respect accorded to another person. In addition, a man generally receives more respect in the business world than a woman, though foreign businesswomen (especially, non-Asian looking women) are accorded almost an equal amount of respect as foreign businessmen. Single women generally receive less respect than married women whose ties to their husband oftentimes establish their position in society. The American businessperson, as a foreigner, is generally exempt from the above societal classification system, though one should be prepared to answer questions that Koreans may regard as common to establish societal hierarchy but which foreigners may regard as personal, such as questions of age, marital status, and wage earnings.

Americans should be ready to mix business with social life as the Koreans base their business relationships on personal ones. The heavy drinking of the Korean alcohol, Soju, beer, whiskey or other liquor is commonplace in establishing a personal, business relationship. Also commonplace is the "no-ray-bang" where a group of businesspeople go to an establishment to drink and sing along to a video machine playing music. As most no-ray-bang machines come equipped with songs in English, a businessperson may want to be prepared to sing at least one song in order to gain social favor with their Korean counterpart. Though not as common as the no-ray-bang, businessmen should also be aware of "room salons" where Korean women serve food and drink to their patrons.

When doing business, Americans should be sensitive to Korea's historical relationship with Japan which made a virtual colony of the Korean peninsula. Because of the Japanese colonial period, Koreans have an emotionally intense reaction at times to things Japanese, though there is an admiration for Japanese business acumen. A business person should show great respect towards Korean society. Any comparative mention of Japan versus Korea, where Japan has the upper edge may harm a business deal.

Korea still observes Confucian ethics based on a strong belonging to a group. Whereas an American may think in individual terms, (i.e., what is in my best interest?), the Korean oftentimes thinks in group terms, (i.e. what is in the best interest of the group and how can I help to maintain harmony within the group? ) For this reason, the majority of Koreans are intensely patriotic, calling Korea by the term, "oo-ri-na-ra," ("our" country). In order to close a deal during the context of negotiations, the benefits to the group, whether it is to the company or country, should be persuasively put forth.

For Koreans, relationships are all important; "cold calls" don't work -- introductions are crucial! Koreans want to do business with people with whom they have formed a personal connection or whereby a mutual intermediary has made an introduction. As alumni contacts are a major source of networking in Korea, a particularly well-connected Korean will have attended a prestigious Korean university like Yonsei University, Seoul National University, Korea University, or Ehwa Women's University.

The exchange of business cards is very important and a means by which Koreans learn about the name, position and status of the other person. Koreans observe a very strict hierarchical code, where Koreans will generally meet to discuss business with persons of the same, parallel rank. Businesspersons should always have their (preferably bilingual) business cards at the ready and should treat the exchange of Korean counterpart's card with respect. (It is a sign of respect to receive and present items with both hands, followed in business etiquette by passing and receiving a card with the right hand. One should never give a card, or anything else for that matter, with the left hand as it shows disrespect). For historical reasons, Chinese characters, which Koreans can generally understand, are regarded as more sophisticated. As such, a business card written in Chinese characters can serve for a business trip to Korea, China, and Japan .

Negotiating style is particularly important. Koreans can prove subtle and effective negotiators, and a commitment to a rigid negotiating tact early on may work to the American's disadvantage. Your offer may include the best price, technology and profit potential but still be turned down because the Korean customer does not like your style.

An important point to keep in mind concerns the nature of reaching an agreement with a Korean firm. Westerners attach great importance to a written contract which specifies each detail of the business relationship. Koreans, on the other hand, value a contract as a loosely structured consensus statement that broadly defines what has been negotiated, but leaves sufficient room to permit flexibility and adjustment. The Korean Government has attempted to address this dual perception by formulating "model" contracts for licensing technology and other arrangements. Both parties must be assured the obligations spelled out in a negotiated contract are fully understood.

Most Koreans have three names. These names usually follow the Chinese pattern of a surname followed by two given names. In a Korean household, all brothers and sisters have the same last name and a common given name; the only distinguishing mark is the remaining given name. In addressing Koreans, foreigners should observe the use of surnames (e.g. Mr. Kim; Ms. Lee), using formal titles if possible (e.g. Dr. Yoo; Director Song). The most common last names are Kim, Lee, and Park. In the use of formal titles as appropriate, one should always be familiar with the complete name, including the two given names, for identification purposes, as there may be several Mr. Park's or Doctor Lee's in the same company and even the same work space.

Travel Advisory

Travelers with questions or concerns about traveling to Korea should check with the U.S. Department of State's Office of Overseas Citizen Services, 2201 C Street, N.W., Washington, D.C. 20520. For recorded travel advisory information contact tel. 202-647-5225. For faxed travel advisory information sent to your fax machine, contact tel. 202-647-3000. Additional travel advisory information is available on the World Wide Web at http://travel.state.gov.

Although Korea has not yet made its mark as a tourist destination, with the Korean won devaluation, more and more foreigners are visiting Korea. In addition, Seoul has long been a well-established business center. Thus, Seoul has the selection of deluxe hotels one would expect. These hotels cater to the needs of busy professionals with business centers offering secretarial, translation and interpretation services, courier services, printing and photocopying, telecommunications, and equipment rental.

It is relatively easy to get to Korea from the United States. For direct flights, flying time ranges from 12-16 hours, depending on the point of departure. For those flights which include connection time, the trip from the East Coast of the U.S. to Korea can take as long as 24 hours, door to door. Kimpo International Airport, located 10 miles southwest of downtown Seoul, is the primary gateway to South Korea. Depending on the volume of traffic it can take anywhere from 45 minutes to two hours to travel from Kimpo Airport to Central Seoul. For information on Kimpo operations, English speakers can telephone 660-4114; Korean speakers can dial, 660-2114.

Visas

Although passports are required, visas are not required for American tourist or business visitors, or those in-transit, who wish to remain in Korea for up more to than 30 days and hold outbound tickets. (The day of arrival counts as day number one.) However, since there are no extensions and a substantial penalty at departure for those who exceed 30 days, it is a good idea to get a visa from a Korean embassy or consulate prior to coming to Korea, if the stay might approach two weeks.

American visitors may stay for up to 90 days, if one obtains a business or tourist visa before arriving in Korea. A photograph and a letter from an American company stating the purpose of travel must be submitted with the visa application; no written invitation from a Korean firm is required.

A long-term resident visa (beyond 90 days) is more difficult to obtain than a business or tourist visa. Application must be made to the Korean Ministry of Justice from outside Korea. An application for a long-term resident visa requires considerable documentation, including a letter of invitation from a Korean company and contractual evidence of legal employment. Since July 1, 1994, the Justice Ministry extended the length of stay authorized for some long-term foreign residents, and has simplified the visa renewal process by eliminating the 15-day, out-of-the-country waiting period. Renewals are available at overseas Korean diplomatic and consular missions and should be done before leaving the United States.

For help with all matters pertaining to Korean visas during a stay in Korea, businesspersons should contact the nearest immigration office under the Korean Ministry of Justice in Seoul. Upon arrival in Korea, an immigration card and customs declaration form (given on the plane) should be completed before reaching the first floor arrival processing area. No vaccination certificate is required for entrance under Korean quarantine regulations. In clearing customs, gifts with a value of up to $400 (which can include liquor up to one liter (33.8 fl. oz.), two ounces of perfume and 200 cigarettes) may be brought in duty-free by non-residents. Currency in excess of $10,000 must be declared.

For international departure from Kimpo there are two terminals: Terminal One for foreign carriers and Terminal Two for the two Korean airlines and seven other foreign carriers. At check-in a passenger service charge of Won 9,000 (about $6.50) must be paid. Also, the Cultural Preservation Properties Law prohibits the export of "significant" Korean cultural properties.

Non-residents must declare in writing to Korean Customs all foreign currency with a value in excess of $10,000 that they carry into or acquire in Korea. This rule is enforced. When buying Won in Korea be sure to keep the receipt(s) because re-exchange is allowed up to the amount specified; without receipts only $500 worth of won can be re-converted to dollars.

Non U.S. citizen visitors to the United States are allowed to bring in duty-free gifts with a value of up to $100. For travelers within this limit no written declaration is required. Additional gifts and other items which will remain in the United States are dutied at a rate of ten percent up to $1,000, and at variable rates thereafter.

Returning U.S. residents can bring in duty-free into the United States, articles totaling $400 in value when the articles are for personal use. After the $400 exemption, the next $1,000 worth of personal or gift items are dutied at a flat rate of ten percent. Beyond $1,400, various duty rates apply according to the item. Both residents and non-residents are limited to one carton of cigarettes, 100 cigars and one liter of alcoholic beverage or two ounces of perfume for duty-free import. The duty-free limit is $50 for bona fide gifts mailed to the United States. Every mail shipment must contain a written declaration.

Foreign-made personal articles are dutiable each time they are brought into the United States, unless one can prove prior possession. Articles bought in "duty free" shops in foreign countries are subject to U.S. customs duty. Articles purchased in U.S. "duty free" shops are also subject to U.S. duties if they are brought back into the United States.

Americans visiting Korea should be aware of possible trademark and copyright violations when purchasing articles in Korea. Makes such as Coach, Reebok, LA Gear, Gucci, Polo, Rolex, Disney, Chanel, and Warner Bros., and Members Only, and computer software and games are often counterfeit. Due to the high potential for counterfeiting, items bearing the above-named trademarks (and several others) can only be legally mailed or carried into the United States, if they are the authentic articles. By attempting to carry counterfeit goods through U.S. Customs, one runs the risk of having them confiscated. Possession of significant amounts of counterfeit goods can lead to criminal prosecution. Questions regarding the import of counterfeit goods into the U.S. should be directed to the U.S. Customs office at the Embassy in Seoul at 82-2-397-4644.

Korean National Holidays

1999

January 1, 2:   	New Year Holidays
February 15, 16, 17:   	Lunar New Year 
March 1:   	Independence Movement Day
April 5:   	Arbor Day
May 5:   		Children's Day
May 22:   		Buddha's Birthday
June 6:			Memorial Day (Hyun Choong Il)
July 17:   	Constitution Day (Je Hun Jul)
August 15:   Independence Day (Kwang Bok Jul)
September 23, 24, 25:	Korean Thanksgiving (Chusok) Days
October 3:   National Foundation Day (Kae Chun Jul)
December 25:   		Christmas Day

Note: All holidays are annually fixed calendar days with the exception of Lunar New Year and Korean Thanksgiving (Chusok) Day which vary every year in timing and duration depending on the Chinese lunar calendar.

Business Infrastructure (e.g. Transportation, Language, Communications, Housing, Health, Food)

When visiting Korea on business, it is best to reserve your room well in advance. This is doubly true during Lunar New Year and Chusok because of the holiday season. Furthermore, it is a good idea to confirm your hotel reservation and any special requests by fax. One may contact the Korea National Tourism Corporation at tel. 82-2-757-0086, fax. 82-2-777-0102 and ask for an English assistant for help in finding a hotel, especially for hotels outside of Seoul. By faxing the Seoul Tourist Association on 82-2-556-3818/ 9 or calling 82-2-556-2356 one can request a comprehensive listing of Seoul hotels, inns and hostels.

Tipping is not customary, but a ten percent service fee is automatically charged at most hotels, as is a ten percent Value Added Tax. Many of the hotels offer attractive corporate discounts, but they are usually not available if you book through a travel agent. Finally, participants on official federal government programs (such as trade shows, "matchmakers" and other official trade missions) sponsored by the Commercial Service of the American Embassy or other entities of the U.S. government can often be accorded an Embassy discount rate at certain hotels.

Seoul's public transportation system is very well organized. With timely subways and city buses that service the whole city, the only real problem is the traffic. The seemingly endless rush-hour traffic can be a major hindrance, so early preparation, as well as lots of patience, is required.

Thanks to the new non-stop limousine bus service commissioned by the government and operated by Korean Air Lines, travel from the airport to the major hotels is quite easy. The fare is 5,000 Korean won (about US$3.60) one-way and 3,000 Korean won (about US$ 2.15) for children between six to twelve years of age. As an added convenience the buses are equipped with pay phones and tourist information and travel to the major deluxe hotels about every 20 minutes. In addition, a subway line connects Kimpo airport to the rest of Seoul.

Seoul boasts a world-class trade resource known as the Korea World Trade Center (KWTC). Included at this site are the Trade Tower, the Korea Exhibition Center (KOEX), the City Air Terminal, a convention center and a major international hotel.

Most private offices are open from 8:30 a.m. to 6:00 p.m. weekdays and from 9:00 a.m. to 12:00 p.m. on Saturdays. Some companies are beginning to provide Saturday mornings or every other Saturday off. Korean Government offices keep similar hours, except for a 5:00 p.m. closing from November through February. Banking hours are from 9:30 a.m. to 4:30 p.m. on weekdays and 9:30 a.m. to 1:30 p.m. on Saturdays.

The U.S. Embassy is officially open from 8:30 a.m. to 5:00 p.m. weekdays and closed on Saturdays, Sundays, and American and Korean holidays. The Embassy Consular Section's American Citizen Service Office is open 9:30 AM-11:30 and 1:30-3:30 PM each weekday except Wednesday. Recorded information on passport, notarial and other ACS services is available 24 hours a day at 397-4603/4604.

U.S. business travelers are encouraged to obtain a copy of the "Key Officers of Foreign Service Posts: Guide for Business Representatives" available for sale by the Superintendent of Documents, U.S. Government Printing Office,Washington, D.C. 20402, tel. (202) 512-1800, fax (202) 512-2250. Business travelers to Korea seeking appointments with U.S. Embassy Seoul officials should contact the commercial section in advance. The commercial section can be reached by telephone at 82-2-397-4221, by fax at 82-2-739-1628.

For further information from the U.S. Embassy in Seoul, the U.S. Embassy has a website: www.usia.gov/posts/seoul. Finally, for information on commercial events and the Commercial Service Korea, interested American businesspersons can search the following website address: www.cskorea-doc.gov.