The Ultimate Guide to Doing Business in South Korea [2021]


This post covers everything you need to know about Korean Business Etiquette.

It shows you how to have a successful business meeting with Koreans including info on:

  • What to wear
  • What to say
  • What to bring
  • How to act

I used these techniques while working at a Korean company for 5 years, and to start a company I’ve been running since 2013.

These simple tips will help you avoid major mistakes when doing business in Korea.

modern Korean business etiquette

Korean business etiquette is different from what you’re used to.

Building a successful partnership takes time but comes with many rewards.

There are also many ways ruin a relationship by losing 정 (Jeong), or the unspoken bond that holds the country together.

With the many hidden rules that can make or break a business relationship in Korea, it’s important to be prepared. This guide will also help you:

Background Information

  • Korean Business Etiquette is influenced by Confucianism and Military Hierarchy.
  • There’s some overlap with Japanese Business Culture since both use job titles derived from Chinese characters.
  • Your age and job title relative to others determines how you communicate and behave. A higher age/job title will give you more credibility.
  • Most Koreans have been exposed to Western culture through movies and TV shows, and will often have their favorites. This can be a good dinner conversation topic.
  • Many have studied abroad or interacted with native English speakers at private academies.
  • Regardless of the amount of exposure to the West, Koreans will most likely follow local business protocol.
  • A close relationship is the key to doing business in Korea, while planning takes a backseat. Since most businesses operate this way, it’s especially difficult to predict the future, so things are often decided on the fly.
  • The concept of “face” (체면) also exists. Never correct/criticize someone in public. You’ll be met with more resistance done the road.
  • Flexibility is also very important when doing business in Korea. Don’t be surprised if you end up performing tasks well outside your scope of expertise.
  • Although becoming less important, gender is still a factor. Married males over 40, or “ajeossi”, are perceived as having a higher position in society. Women still handle domestic duties, even when they have their own careers. It’s not uncommon for female managers to serve tea in business meetings.
  • In business you will either be a 갑 (gahb), “the party with power and money” or 을 (uhl), “the party without”. Some examples of this are “employer and employee” or “buyer and seller” relationships. All contracts in Korean define “Party A” and “Party B” as either “gahb” or “uhl”, while in western countries “Party A” and “Party B” are considered somewhat equal.
  • The Korean economy is dominated by a few companies called “Jaebeol”.
  • Those who work at these companies often have graduated from SKY (Seoul National University, Korea University, and Yonsei University). These universities are considered the best and society tends to respect/envy their alumni. Doing business with them can take a different tone as you can imagine.
  • It’s important to bring a small gift to a meeting.
  • Two people usually attend a business meeting, a junior and a senior employee, so plan accordingly.

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Dress Code

You will be judged by your appearance and grooming (clean shaven and clean cut are a plus).

Dress shoes, slacks, a button up shirt and tie are recommended.

If you’re meeting an ajeossi, or married man over 40, it’s a good idea to wear a jacket and tie.

Your watch will also be judged. Tag Heuer grants instant credibility. Citizen and Tissot are the bare minimum. Anything cheaper than 200 USD is better left at home.

Bring a wallet and a business card holder (full of your business cards), preferably a brand name like Mont Blanc or Gucci.

Korean office dress code
Appearances are very important in Korean business culture.

What to Buy as a Gift

Gifts are very important in Korean culture. There’s even business gift etiquette that’s worth learning.

You’re not required to give a gift unless you’re a seller, but something small would be appreciated.

Company gifts (pens, umbrellas, calendars, etc.) are safe choices.

For women, Yankee Candle or L’Occitane Hand Cream.

For men, alcohol (Ballentines or Chivas Regal if you really want to make an impression) or golf equipment including golf balls as they cost double in Korea.

During the Meeting

Greetings

Bow slightly and shake with a loose grip using two hands (a firm grip is a sign of aggression) after the oldest/highest ranking person reaches out.

Business cards are exchanged at the same time while standing, even if you have their contact info.

Don’t make small talk at this stage, just follow our formula unless a question is asked.

Present your business card with two hands when the oldest/highest ranking person presents theirs.

Make sure your info is facing the person accepting the card, so they can read it.

Look at their card for 3 seconds, then say their name and title (add a “nim” at the end of the title for extra points).

Place their card on the table so you can see it during the meeting (don’t put it in your pocket as this is uncommon).

Eye Contact

The older person by more than two years usually makes eye contact while the younger person will look away slightly as a sign of respect.

As a non-Korean, you can simply use soft eye contact.

Meeting Agenda

The main topics in order of importance are:

  1. Price Negotiation (they will want a discount)
  2. Quality Assurance (especially for ongoing projects)
  3. Their Company History and Process (during the first meeting)

You will hear a full presentation on their company history and milestones. Prepare yours as well.

Koreans are vague by Western standards, especially during the first meeting. They will not settle on numbers, dates and specifics.

They will minimize the time spent on details and will mostly be feeling out the situation.

Gathering Information

It’s important to build the relationship first before getting anything done. Take your time.

Don’t expect to be presented with the information you need. Prepare specific questions for key info you need to know.

When they respond that “they aren’t sure” or “don’t know yet”, ask politely when you can receive the information. Don’t persist if they continue to be reluctant.

Koreans will answer your questions after providing context. The most important part is at the end.

Whereas in English, questions are answered first, then an explanation is provided.

If someone goes off on a tangent when asked a question, ask again for a rough estimate.

Korean business information
There’s often a lack of information due to the language barrier or cultural differences.

Negotiating Price

It’s ok to ask for a discount or an adjustment.

Asking for a final and best offer is considered a bit aggressive.

Koreans won’t say “no”, instead they will say, “it will be a little difficult”.

Expect there to be multiple rounds of negotiations.

It takes at least a week to finalize details.

The decision maker doesn’t usually attend the meeting, and their approval is necessary to proceed.

Receiving Gifts

You will most likely receive a gift near the end of the meeting.

Accept the gift with two hands and thank them. Do not open it in their presence.

After the Meeting

Goodbyes

Goodbyes are short. Repeat the same steps in the Greetings section minus the business card exchange.

Thank them for their time.

If your deal is important to them, you will probably be invited to a meal.

Expect alcohol to be involved.

Having Lunch/Dinner

Most Korean restaurants serve a few main dishes with a variety of side dishes that you can get refilled.

The main dishes sometimes come in a large pot for everyone to share.

So, people in groups tend to order the same thing.

Feel free to order what you want at a western restaurant.

The youngest staff member in each group will set up the utensils and pour the water.

You can gauge how progressive the company is if the oldest/highest ranking person helps out.

When the oldest/highest ranking person lifts their utensils, you can begin eating.

Tips at a Korean Restaurant

Do not lift plates or bowls while eating.

Do not use chopsticks and a spoon at the same time.

Close your mouth when chewing and try not to make noise.

korean food bibimbap
Meals are a necessary part of business culture in Korea.

When you’re done eating, put your spoon and chopsticks in their original position.

Koreans normally share side dishes, so don’t repeatedly touch them with your chopsticks.

Small talk during meals is uncommon, especially with middle-aged people.

Seoulites tend to eat quickly by western standards.

The oldest person or the person inviting usually pays for the entire meal.

You might find yourself fighting for the check.

If you’re the seller, regardless of age, make sure to fight extra hard for the check.

If you absolutely need to pay, pretend to go to the bathroom near the end of the meal and pay at the front (this would only be acceptable if you’re a seller).

I’ve been successful with this about 50% of the time, since Koreans are experts.

After Dinner

접대 (Jeopdae, wining and dining) is a very important part of business.

This is sometimes where the deal gets made.

A night out with Koreans will involve bar hopping and possibly 노래방 (Noraebang) or Karaoke.

You can be more informal (semi-formal would be the operative word with basic etiquette still followed) and get to know each other better.

South Korean nightlife seoul
What happens after the meeting can be more important for building relationships, the driving force of business in Korea.

Don’t say no to the first shot of alcohol and make sure you finish it in one gulp (Koreans call this 원샷, one shot).

When an older/higher ranking person pours liquor for you, hold your shot glass in your right hand and touch the bottom of your right elbow or the bottom of the glass with your left hand.

This same principle applies when you pour for others.

If things get really relaxed, you might find yourself playing some drinking games.

Even if you’re reaching your limit, do the 건배 (geonbae) or “cheers” motion and lightly touch the glass to your lips and put it back on the table.

If you don’t drink at all, make sure you fill your shot glass with soft drinks and go through the motions.

The most important seat is the center furthest from the entrance.

The second most prestigious is next to the most important seat, where the two can converse.

The least important seat is near the entrance.

If you see that an older/higher ranking person’s glass is empty, pick up the bottle with your right hand as to cover the label.

Touch the bottom of your right elbow or the bottom of the bottle with your left hand.

Pour liquor (usually soju) until it fills 3/4 of the glass.

When you drink, turn your head slightly away from the older/higher ranking person and drink.

Koreans have a variety of drinking games, some involving math.

I advise you not to play them, unless you want to drink a lot.

Follow Up

Make sure to follow up in two days.

Request the information you didn’t receive during the meeting.

If you do not receive it by the date promised, call them on the phone.

Expect to follow up in a week or two.

About Contracts

Contracts should be in both Korean and English.

It’s possible for a Korean court to invalidate a contract if the counter party didn’t understand the terms.

Avoid ambiguous and inconsistent language.

A Korean court will often balance out any contract in favor of the counter party if the terms are vague.

Expect to continually renegotiate terms, even after they have been agreed upon.

Failing that, arbitration can be the next step to resolving any differences.

Of course, make sure to designate an impartial arbitrator to make sure your interests are looked after.

Korean companies often have cash-rich subsidiaries in other countries.

It’s often better to have your counter party be one of these overseas subsidiaries.

Also, designate an overseas district to enforce a contract when possible, since it’s much easier to win a judgement in a non-Korean court.

Finally, make sure that the signing party is the one with the highest likelihood of having a judgement enforced against it (this is not always the Korean HQ).

A contract in Korea is usually a loose agreement to work together in some capacity with the particulars changing to your benefit or detriment as time goes on.

Keep this in mind and focus more on the relationship to make sure things stay balanced.

Define as many terms as possible to increase clarity and not leave anything up to the courts.

This will help you understand your counter party as their definition might differ from yours considerably.

A contract doesn’t always carry the same weight as it does in other countries.

Just because something is put in writing, doesn’t make it ironclad.

Always proceed with caution and use your best judgement.

Learning Korean

Guided conversation is the fastest way to get fluent in Korean. Pimsleur takes you from 0 to conversational in three months. You can try the full course free for 7-days here.  

Did we miss anything?

I learned these rules the hard way while working in Korea for over a decade.

After starting a translation company, I follow these guidelines whenever I interact with Korean clients.

Let us know your business tips in the comments below!

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2 thoughts on “The Ultimate Guide to Doing Business in South Korea [2021]”

  1. Dear Sir,
    I needed your support in learning how I can get in touch with Koreans who are keen to set up business in India, as joint venture or technology transfer.

    The area is from better water solutions and better air solutions.

    best regards,
    Col arun Sharma,

    Reply

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