AmCham Reports and Letter to Yoon: "Significant Deregulation Needed for 'Asia Headquarters'"

'Publication of Report on Attracting Global Companies to Asia-Pacific Bases'
Regulatory Reforms Not Meeting Global Standards
James Kim "Appropriate Regulatory Reforms Needed"

The American Chamber of Commerce in Korea (AMCHAM) released a report on the 19th stating that "amid the changing geopolitical environment surrounding China, South Korea possesses solid infrastructure and firmly established supply chain infrastructure," and emphasized that "to make our country the ‘Asia headquarters’ for global companies, regulations must be significantly eased." AMCHAM delivered this report to President Yoon Suk-yeol. As global companies, which previously preferred Hong Kong and Singapore, have recently been focusing on South Korea as a new Asia-Pacific headquarters, the report highlights the need for swift government response and the creation of a conducive environment.

James Kim, Chairman of AmCham. Photo by Dongju Yoon doso7@

In the ‘Strategy Report on Attracting Global Companies’ Asia-Pacific Regional Headquarters to Korea’ released that day, AMCHAM analyzed that "if regulations that do not meet ‘global standards’ are reformed, many global companies are highly likely to relocate their Asia-Pacific headquarters to South Korea." AMCHAM pointed out that although numerous global companies want to establish their Asia-Pacific headquarters in South Korea, various regulations have prevented them from making a decisive move. As evidence, they cited the results of the ‘2024 Business Environment Survey’ conducted among 800 member companies. In this survey, South Korea ranked second as the preferred country for global companies to establish their Asia-Pacific headquarters, following Singapore. However, AMCHAM added that these companies are reluctant to choose South Korea due to concerns over criminal liability risks for CEOs, digital regulations, and high corporate taxes.

The trend of global companies ‘decoupling from China’ is seen as a good opportunity for South Korea. Having experienced trade conflicts between the U.S. and China and national lockdowns due to the COVID-19 pandemic, global companies have recently been withdrawing from the Chinese market and focusing on finding new alternatives. AMCHAM stated, "South Korea, being geographically close to China and having excellent industrial infrastructure, can serve as an alternative to China." They also added, "With significant increases in trade and investment between Korea and the U.S., it is necessary to undertake tasks to strengthen South Korea’s position as an Asia-Pacific headquarters and to further solidify the economic partnership between the two countries."

AMCHAM also said, "To become a more attractive destination for foreign direct investment (FDI), it is essential for South Korea to establish a regulatory environment comparable to its Asia-Pacific competitors." James Kim, AMCHAM Chairman and CEO, emphasized, "Through appropriate regulatory reforms and proactive promotional strategies, Korea can solidify its status as a preferred country for multinational companies seeking to establish a regional presence."

Along with this, 30 AMCHAM directors sent a letter to President Yoon containing policy recommendations to strengthen South Korea’s competitiveness. In the letter, the directors stressed the need to reduce risks faced by CEOs who make critical decisions for companies and to implement flexible employment and labor policies. They also called for deregulation related to foreign exchange rules and regulations on self-generation of energy costs. Furthermore, they raised the necessity of improving the regulatory environment, including easing digital economy-related regulations such as network separation and Cloud Security Assurance Program (CSAP), as well as enhancing English education.

Previously, in April 2022, one month before President Yoon’s inauguration, AMCHAM had sent a letter to the Presidential Transition Committee recommending securing flexibility in employment and labor policies such as the 52-hour workweek and reducing CEO risks related to the Serious Accident Punishment Act.