Doing Business in South Korea
DOING BUSINESS IN SOUTH KOREA
BUSINESS ISSUE IN SOUTH KOREA
South Korea continues a process of economic liberalisation and deregulation, but the government has yet to adopt a fully laissez-faire policy where the economy and trade are concerned. The UK TI team in South Korea works actively to lift or loosen the many regulatory barriers that still exist to ease UK-based company enter to the market(UK Trade and Investment, 2009)
Getting Paid - Terms of Payment
The payment terms you can normally expect in South Korea are “100 percent Confirmed Irrevocable Letter of Credit” . Letter of credit (L/C) is that adds the endorsement of a seller 's bank (the accepting-bank) to that of the buyer 's bank (the issuing bank). It provides the highest level of protection to the seller because not only the L/C cannot be canceled (or its terms changed) unilaterally by the buyer (the account party), but also both banks involved in the transaction guaranty its payment on its due (maturity) date. Letters of credit are the terms you should quote when doing business in South Korea. You are unlikely to obtain deposits with order, or prior to shipment. It may be counterproductive to try to insist on deposits. Letters of Credit are normally opened 4-6 weeks prior to the shipment date. The expiry date of the Letter of Credit will be geared very much to the promised delivery date. It is important therefore that delivery promises are fulfilled or the Letter of Credit will expire (UK Trade and Investment, 2009).
Compared to other types of Letters of Credit, it is suggested to use Standby Letter of Credit (SBLC). Standby Letter of Credit (SBLC) may be more beneficial for trade. The SBLC uses the original documents and the bill of lading in order to obtain payment for the merchandise from a seller to a buyer. This is all done in different parts and the process concludes when the merchandise arrives at the port. The documents are verified upon arrival of the goods and the process
BUSINESS ISSUE IN SOUTH KOREA
South Korea continues a process of economic liberalisation and deregulation, but the government has yet to adopt a fully laissez-faire policy where the economy and trade are concerned. The UK TI team in South Korea works actively to lift or loosen the many regulatory barriers that still exist to ease UK-based company enter to the market(UK Trade and Investment, 2009)
Getting Paid - Terms of Payment
The payment terms you can normally expect in South Korea are “100 percent Confirmed Irrevocable Letter of Credit” . Letter of credit (L/C) is that adds the endorsement of a seller 's bank (the accepting-bank) to that of the buyer 's bank (the issuing bank). It provides the highest level of protection to the seller because not only the L/C cannot be canceled (or its terms changed) unilaterally by the buyer (the account party), but also both banks involved in the transaction guaranty its payment on its due (maturity) date. Letters of credit are the terms you should quote when doing business in South Korea. You are unlikely to obtain deposits with order, or prior to shipment. It may be counterproductive to try to insist on deposits. Letters of Credit are normally opened 4-6 weeks prior to the shipment date. The expiry date of the Letter of Credit will be geared very much to the promised delivery date. It is important therefore that delivery promises are fulfilled or the Letter of Credit will expire (UK Trade and Investment, 2009).
Compared to other types of Letters of Credit, it is suggested to use Standby Letter of Credit (SBLC). Standby Letter of Credit (SBLC) may be more beneficial for trade. The SBLC uses the original documents and the bill of lading in order to obtain payment for the merchandise from a seller to a buyer. This is all done in different parts and the process concludes when the merchandise arrives at the port. The documents are verified upon arrival of the goods and the process