In today’s competitive startup landscape, unicorn founders are constantly seeking the optimal locations to expand their global footprint. Choosing the right city is crucial for scaling operations and tapping into new markets. Seoul, South Korea, emerges as a compelling choice for ambitious founders looking to unlock unparalleled opportunities in Asia and beyond.
Seoul’s startup ecosystem is rapidly maturing into a powerhouse of innovation and entrepreneurship. As a rising tech hub, the city provides a fertile environment for startups to thrive, buoyed by Invest Seoul‘s proactive efforts in fostering international business growth within Seoul’s vibrant ecosystem.
Invest Seoul, established by the Seoul Metropolitan Government, serves as a crucial catalyst in attracting global companies to Seoul and fostering a foreign investment-friendly environment. Since its launch in February 2022, Invest Seoul has played a pivotal role as a bridge for foreign companies seeking to invest in Korea, offering comprehensive services that facilitate a seamless entry into the Korean market.
Key Advantages of Opening a Branch in Seoul
Establishing an office in Seoul presents numerous advantages that set it apart from other Asian cities:
1. Strategic Location: Gateway to Key Markets
Seoul’s strategic location in Asia positions it as a gateway to major markets like China and Japan. The city’s advanced logistics infrastructure ensures efficient connectivity, with over 30 major cities accessible within a three-hour flight radius. Situated at the core of global logistics networks linking the Asia-Pacific region, Eurasia, and the Americas by sea and air, Seoul provides unparalleled access to diverse markets and consumer bases. Incheon International Airport, ranked No. 4 globally, serves as a vital transportation hub, connecting 105 cities across 44 countries. It ranks No. 5 in international passenger traffic and No. 2 in international air cargo volume (ACI, 2021).
2. Well-developed Urban Infrastructure
Seoul boasts world-leading ICT penetration and communication networks, with an impressive 86.8% high-speed communication network penetration (5G) and extensive free public Wi-Fi coverage. The city tops the charts in wired broadband optical cable subscription rates among OECD countries at 87.3% (June 2022). Seoul is also the sixth-largest e-commerce market globally, reflecting its technological prowess and robust digital infrastructure. The city’s commitment to convenience and transparency is evident in its world-class e-government initiatives, ranking third in the e-government development index and online services (UN E-Government Survey 2022). Seoul’s exceptional urban infrastructure extends to convenient and affordable public services, encompassing transportation, telecommunication, electricity, and water—essential components of a conducive business environment.
3. Hub for Leading Global Brands
Seoul is home to over 70% of global brand companies with cutting-edge technology, including Samsung, LG, and Hyundai. More than half of the Fortune 500 companies have established a presence in Seoul, underscoring the city’s strategic importance as a business and innovation hub. Seoul’s reputation as a global testbed attracts companies seeking to launch innovative products and services, leveraging a receptive and trendsetting consumer base across all generations.
4. Strategic Investment in Future Industries
Seoul demonstrates a robust commitment to fostering innovation and supporting core industries through specialized clusters in R&D (bio/medical/pharmaceutical), ICT, AI, and digital content services. The city is home to 27 out of 32 Korean unicorn companies, reflecting its vibrant startup ecosystem valued at USD 211 billion (Startup Genome 2023). Seoul’s support for technology R&D and intellectual property rights further underscores its role as a leader in technology-driven industries.
5. Exceptional Educational Environment
Seoul’s mega-city status with a population exceeding 10 million creates a dynamic consumer market that drives global trends across various sectors. The city boasts a high tertiary education completion rate, with college graduates aged 25-34 representing the highest ratio among OECD countries. Seoul ranks as the No. 2 Best Student City globally (Quacquarelli Symonds 2023), highlighting its robust educational ecosystem and talented workforce conducive to innovation and economic growth.
7. Specialized Industrial Clusters
Seoul’s strategic development of specialized industrial clusters fosters collaboration and innovation across key sectors such as IT convergence, drones, biotechnology, and robotics. These clusters, including Y-Valley for IT convergence and drones, Magok for eco-friendly high-tech industries, G-Valley as Korea’s emerging Silicon Valley, and Suseo for robotics and AI, are vital hubs fostering collaboration, research, and development.
For instance, Y-Valley has transformed into a Digital Maker City, embracing Industry 4.0 technologies like drones, AR/VR, and robots after an urban regeneration initiative in 2017. Similarly, Magok serves as a nexus for R&D in future-oriented sectors like IT, biotechnology, and green technology, with major global companies like LG Science Park and Nexen Tire headquartered there. These initiatives not only attract startups but also support established enterprises, creating a fertile environment for innovation and economic vitality.
8. Incentives for Foreign Investment
Seoul’s dedication to cultivating a favorable business environment extends to providing substantial incentives and support for foreign investors. Through cash grants, subsidies for employment and training programs, tax exemptions, and the designation of Foreign Investment Zones, Seoul aims to attract and retain international businesses. Additionally, the city offers accessible and affordable office spaces through business tenancies, further reinforcing its appeal as a premier destination for foreign investment. These comprehensive initiatives underscore Seoul’s commitment to fostering economic growth and innovation on a global scale.
Invest Seoul: FDI All in One Package
Notably, Invest Seoul facilitates cash grants for foreign direct investments that significantly contribute to the Korean economy, providing crucial financial support to promote sustainable growth and economic development. Moreover, Invest Seoul spearheads the designation of Foreign Investment Zones, strategically stimulating foreign investment through targeted incentives and tailored regulations, including tax exemptions on acquisition and property taxes for qualifying investments.
Additionally, Invest Seoul assists foreign-invested companies with leasing places of business, offering support with security deposits and rent. This holistic approach ensures that foreign investors receive comprehensive support throughout their business journey in Seoul.
Furthermore, Invest Seoul provides valuable information on foreign-invested companies, including credit ratings, employee counts, sales data, and regional statistics, enabling informed decision-making and enhancing transparency for foreign investors exploring opportunities in Seoul’s dynamic market. Through its robust support ecosystem and strategic initiatives, Invest Seoul continues to elevate Seoul’s global competitiveness and position it as a premier destination for foreign investment.
Success Stories
Invest Seoul’s remarkable success in attracting 46 global companies to Seoul underscores the city’s burgeoning reputation as a premier global business hub. Through its innovative ‘FDI All in One Package‘, Invest Seoul offers a comprehensive suite of tailored support services designed specifically for foreign companies entering the Seoul market post-COVID-19. This initiative strategically focuses on key sectors such as IT, content, energy, bio, and finance, aligning closely with Seoul City’s economic development objectives. The package includes end-to-end assistance, ranging from market research and corporate registration to real estate leasing and ongoing business management support, encompassing labor, accounting, and legal services.
Invest Seoul’s strong partnerships with domestic FDI-related organizations, major foreign banks, and expert groups ensure a seamless entry and operation for foreign businesses. Responding to feedback, Invest Seoul has further refined its support services for 2023, incorporating preliminary market research, business consulting, and ongoing aftercare to foster continued investment and growth.
Eyeline Studios, a subsidiary of Netflix, recently inked a deal with Seoul City to invest $100 million over the next five years. This investment will pave the way for the establishment of a new video production studio in Seoul, creating around 200 jobs for local Korean artists. The studio will also provide educational programs focused on digital production technologies, such as real-time filmmaking, LED volumetric capture, and machine learning algorithms. Seoul’s proactive approach in attracting major companies like Eyeline Studios and fostering foreign investments through initiatives like the Investors Forum.
Looking ahead to 2024, Invest Seoul plans to intensify its efforts, particularly targeting industries like games and content, leveraging Seoul’s strengths in these sectors to attract more investment and enhance support for global companies. Testimonials from companies with success underscore the effectiveness of Invest Seoul’s support, highlighting the value of comprehensive assistance throughout the market entry and operational phases. Ultimately, Invest Seoul’s ‘FDI All in One Package’ plays a pivotal role in facilitating foreign investment in Seoul, showcasing the city’s attractiveness as a global business destination, and providing essential support for companies to thrive in key strategic sectors aligned with Seoul’s dynamic economic vision.
The ‘Seoul Vision 2030 Fund’ aims to create a 5 trillion won ($3.7 billion USD) fund over four years from 2023 to 2026. In 2024, the city plans to invest 1.3 trillion won ($939 million USD) from its previously raised ‘Vision Fund’, with an additional goal of raising 1.175 trillion won ($845 million USD).The Seoul Metropolitan Government initiative is designed to revitalize the venture market and support startups through the “Death Valley” phase, Seoul is accelerating investment activities.
In conclusion, Seoul presents a compelling opportunity for unicorn founders seeking to expand globally. With its dynamic startup ecosystem, strategic advantages, and Invest Seoul’s proactive support, Seoul stands out as a prime destination to unlock unprecedented growth and innovation. Embrace the vibrant energy of Seoul and embark on a transformative journey to scale your startup to new heights in Asia and beyond.
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