Chamber of Commerce Country Factsheet Last update: 15.05.2017
Your advisors at the Chamber of Commerce
- Shi Na+352423939364
- Sabrina Aksil+352423939374
An independent kingdom for much of its long history, Korea was occupied by Japan beginning in 1905 following the Russo-Japanese War. In 1910, Tokyo formally annexed the entire Peninsula. Korea regained its independence following Japan's surrender to the US in 1945. After World War II, a democratic-based government (Republic of Korea, ROK) was set up in the southern half of the Korean Peninsula while a communist-style government was installed in the north (Democratic People's Republic of Korea, DPRK). During the Korean War (1950-53), US troops and UN forces fought alongside ROK soldiers to defend South Korea from a DPRK invasion supported by China and the Soviet Union. A 1953 armistice split the Peninsula along a demilitarized zone at about the 38th parallel. PARK Chung-hee took over leadership of the country in a 1961 coup. During his regime, from 1961 to 1979, South Korea achieved rapid economic growth, with per capita income rising to roughly 17 times the level of North Korea. South Korea held its first free presidential election under a revised democratic constitution in 1987, with former ROK Army general ROH Tae-woo winning a close race. In 1993, KIM Young-sam (1993-98) became the first civilian president of South Korea's new democratic era. President KIM Dae-jung (1998-2003) won the Nobel Peace Prize in 2000 for his contributions to South Korean democracy and his "Sunshine" policy of engagement with North Korea. President PARK Geun-hye, daughter of former ROK President PARK Chung-hee, took office in February 2013 and is South Korea's first female leader. South Korea held a non-permanent seat (2013-14) on the UN Security Council and will host the 2018 Winter Olympic Games. Discord with North Korea has permeated inter-Korean relations for much of the past decade, highlighted by the North's attacks on a South Korean ship and island in 2010, multiple nuclear and missile tests, and the exchange of artillery fire across the DMZ.
Output growth is projected to be 2.7% in 2016, reflecting weak external demand and fiscal tightening, with inflation around 1%. With stronger external demand in 2017, growth is projected to pick up to about 3%, in line with potential. The current account surplus will remain high at 7½ per cent of GDP.
Government spending is set to rise less than 1% in 2016. Given its budget surplus and low debt, Korea should introduce a supplementary budget to provide some stimulus. Inflation has undershot the target since 2012, suggesting scope to cut the policy interest rate, although the central bank needs to take high household debt and the risk of capital outflows into account.
Korea’s labour productivity growth was the fastest in the OECD during the past 25 years, but the level of labour productivity is still only 55% of the average of the top half of OECD countries, reflecting weak productivity in services. Product market regulation is among the most stringent in the OECD area. The government is addressing the causes of low productivity through its Three-Year Plan for Economic Innovation launched in 2014. Policies to break down labour market dualism would encourage firm-based training, thereby boosting productivity.
Source: OECD - Economic Forecast
Subject descriptor 2014 2015 2016 2017 2018 Gross domestic product, constant prices 3.341 2.612 2.720 3.038 3.059 Gross domestic product, current prices 1,411.334 1,377.873 1,404.383 1,521.000 1,591.301 Gross domestic product per capita, current prices 27,989.353 27,221.524 27,632.844 29,806.185 31,057.490 Inflation, average consumer prices 1.275 0.707 1.021 1.851 2.000 Volume of imports of goods and services 1.466 3.226 2.495 3.196 3.854 Volume of exports of goods and services 2.030 0.776 1.686 2.295 2.995 Unemployment rate 3.542 3.642 3.617 3.300 3.300 Current account balance 84.373 105.871 101.614 89.790 89.538 Current account balance 5.978 7.684 7.236 5.903 5.627
Source: IMF Statistics
Luxembourg and the country
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 07.11.1984 (Memorial 1986, A, p. 1450)
- Effective as of 26.12.1986 (Memorial 1986, A, p. 2269)
- Protocol of Amendment,29.05.2012
- Effective as of 04.09.2013
Air Services agreement
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact points in South Korea
Embassy of the Grand Duchy of Luxembourg in South Korea
Ambassador with residence in Tokyo:
Mrs Béatrice KIRSCH
Luxembourg House 1F
8-9 Chiyoda-Ku Yonbancho
Tel: +81 3 32 65 96 21
Fax: +81 3 32 65 96 24
Economic and Commercial Attaché (AWEX):
Marc DE VESTELE
737-10, Hannam 2-dong
Yougsanku - Seoul 140-893
Tel: +82 2 749 50 61
Fax: +82 2 749 21 32
Honorary Consul with jurisdiction over the Republic of Korea:
Tel: +82 2 316 61 01
Luxembourg Trade and Investment Office
Jangkyo Bldg 1102, 1
Jangkyo-Dong, Chung-Ku, Seoul
Tel: +82 2 777 2552
Fax: +82 2 773 2574
Country risk as defined by Office du Ducroire for South Korea
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Luxembourg for Business market entry guide to South Korea: Market entry guides are brochure series published by the Ministry of the Economy and Foreign. The series focuses on worldwide markets, industries and business environments, providing comprehensive and in-depth analysis and guidelines. The brochures cover all aspects relating to a market entry including the economic, financial and legal frameworks. The brochures are a vast knowledge pool, compiled into a practice oriented document with many tips and important addresses.
Other useful links
- CIA World factbook on South Korea
- Invest in Korea
- Korea Trade-Investment Promotion Agency (KOTRA)
- EU gateway to South-Korea
- Delegation of the European Union to the Republic of South Korea
- Korea Chamber of Commerce
- Seoul Business Agency
- La Corée du Sud sur le site de l'Awex
- Chambre de Commerce franco-coréenne
- Corée Affaires
- Doing Business in South Korea
- Das ist Südkorea
- Economic Freedom Index - South Korea
The Chamber of Commerce and the country