Expats are taught to start up businesses in Korea

When 25-year-old Junlin Wang launched a Web site for Chinese people living in Korea, he didn’t expect it to become a cash cow.

“It was just a hobby when I started it,” said Wang, who is now co-president of Shinhwa Co., Ltd., a portal site company located in Gasan-dong, western Seoul. “Six months after I came to Korea as a student, I found there was no Web portal for Chinese expatriates. I launched it so Chinese could get information about life in Korea.”

The Seoul Metropolitan Government has shown that it wants to encourage expatriates in the capital to start businesses. It offers lots of services and even classes for budding expat entrepreneurs, and Wang is one of its success stories.

Wang entered Howon University in 2006 with his friend Jinkai Zhang, also from China, and the two launched the site.

“From 2006 to 2009, we spent our own money on running the site, paying for a domain and server, which didn’t cost a lot,” Wang said. “And during that period the number of our members surged to 150,000.

The site now has more than 300,000 members and 6.6 million posts, becoming the most popular Web site for the 700,000 Chinese expatriates in Korea. Local and foreign advertisers flocked to the site.

“We have more than 100 advertisers who contracted with us, including Union Paycard and the Shilla Duty Free Shop,” Wang said, showing their logos on the homepage of the site. “Our annual sale has reached 500 million won [$443,262], and our annual profit is about 100 million won. We also have a local branch in China where designers and engineers are uploading Chinese news and information.”

But there were speed bumps along the way, particularly getting affordable office space. In 2009, the partners tried renting cheap space in Suwon, Gyeonggi, but closed it because it was so far from Seoul.

That’s where the Seoul government stepped in.

“The government-run Seoul Global Center gave us an office for free in 2010, and we finally got an office in Seoul with our own funds in December 2010, hiring about 10 part-timers,” Wang said. “The center also offered us translation services, and information on how to start up a business in Seoul, such as submitting application forms to the government. We are still in touch with them whenever we need help and attend seminars there.”

Starting in 2009, the Seoul Metropolitan Government has been running a yearly class, which it calls the College to Start a Business in Korea. A total of 326 expatriates have taken the class so far and 32 have actually opened their own businesses.

“The class gives good insight into how to open and run a business, where to get all of these approvals, and the most beneficial part was a lecture on business culture, what is allowed or not allowed, both culturally and legally,” said Stefan Hueni, a Swiss expatriate who runs a trading company called Swiss Machines Korea, Ltd. in Seoul. “You can get any kind of answers you need from the center.”

Hueni, 46, opened his company in Seoul in September and has two temporary workers. He imports Swiss machinery into Korea and sells it to local automotive companies.

“For expatriates of a certain age like me, it’s difficult to get a job,” Hueni said. “I did receive job offers from Korean companies, but both of them wanted me to work at their companies in Europe. My Korean wife doesn’t want to leave the country, so I opened a business here.”

Hueni said starting a business in Korea isn’t that difficult.

“If you want to open a Korean company, you can start with 1 million won and an F-8 visa,” he said. “I think the government is really trying to attract people to open small businesses, which I think is important to the country, because small- and medium-sized businesses are the future of any country.”

Chika Niinuma, 29, a Japanese woman married to a Korean man, said she received lots of support from the city government when she opened her babysitting company in Seoul.

“When I came to Korea with my husband, I couldn’t speak Korean at all and didn’t have the ability to get a decent job here,” she said. “ I started to work as a babysitter and found many female expatriates have a hard time raising their children in Korea. So I decided to start a company to help those people.

“I took the city government start-up class and got lots of help. The Seoul Global Center also gave us an office to use for free and introduced me to lots of customers, promoting our company at the same time.”

With about 30 Japanese and 10 English-speaking Filipino employees, Niinuma has run Cocoro Babysitter & Housekeeper since April.

“Although we haven’t made much in the way of profit yet, we have 15 regular customers whose husbands are working in Seoul as diplomats or businessmen,” she said. “In November, when we posted an ad on a Japanese Web site, about 20 Japanese housewives on trips to Seoul asked us to help with their babies.”

The free office space is quite popular among expatriate entrepreneurs, said Simon Hong, a director at the Seoul Global Business Support Center in Samseong-dong, Seoul. The center has three free offices for use complete with faxes, computers and telephones. Selected expatriates can use the free offices for six months, and during that time, the center helps them stabilize their business in Korea.

“We receive applications from expatriates who want to start up a business but can’t find an office,” Hong said. “We evaluate their applications based on whether their business is profitable and whether it would contribute to the Korean economy.”

Pilar Perez-Mckay, an Australian expatriate and a member of the Seoul International Women’s Association, is currently using the free office space. “I want to introduce Australian children’s books into Korean schools,” she said. “I’m now launching a Web site. After, I will go to Australia to look for book companies in order to sell their books to Korean publishing companies.”

Despite the support from the city government, expatriates still have some challenges starting businesses in Korea, especially in the area of human resources. “When I find diligent employees, I want to hire them as regular workers,” Wang, the Chinese portal site owner, said. “But most of those people aren’t allowed to extend their visas.

“As my business requires not only Chinese skills but cultural understanding, I need native Chinese employees, not Korean. I once hired a Korean employee, but he quit a day after he started.”

“I have about 10 Korean temporary workers and I feel developing a relationship with Korean employees takes quite a lot of time,” said Niimura, “especially with the elderly.”

“In Korean tradition, respect goes to their elderly, which I absolutely support,” said Hueni. “But the respect in some type of business situations is too tight.”

“I hope the Korean government provides more support for expatriates,” Wang said, “such as lowering taxes, which is about 10 percent of profits now.”

By Kim Hee-jin [heejin@joongang.co.kr]