The German Chamber of Commerce in Korea (KGCCI) and the European Chamber of Commerce in Korea (ECCK), along with a total of 11 chambers of commerce in the European region, jointly announced the results of the annual '2024-25 Korea Business Environment Survey' on the 24th. The satisfaction level of European corporations in the Korean market has fallen to below 50%. The importance of Korea in the global strategies of European corporations has also sharply declined to the 30% range.
According to the survey, the business confidence of European corporations in Korea has declined. The percentage of those satisfied with corporate performance has continuously decreased from 68% in 2022 to 58% in 2023, and is expected to drop further to 45% in 2024. The survey, conducted between Jan. 22 and Feb. 14, involved 139 chief executive officers (CEOs) of European corporations operating in Korea.
This trend is speculated based on sales figures, where only 27% of corporations are expected to achieve an increase of more than 5% in interest and earnings before interest and taxes (EBIT) in 2024, down from 42% in 2023 and 54% in 2022. The competition in the market has shown a fierce environment. While 62% of corporations reported no change in market share for 2024, only 24% experienced growth. This continues a downward trend compared to 38% in 2023 and 53% in 2022.
The business outlook for the next two years presents mixed patterns. Most corporations expect gradual sales growth, but the perception of Korea's importance in global strategies has significantly decreased. Only 36% of respondents expect Korea's importance to increase, down from 53% in 2023 and 59% in 2022.
However, European corporations operating in Korea are still seeking opportunities for growth and investment. More than half of respondents plan to invest in employment this year, with 22% allocating funds for facilities and 12% for research and development (R&D). The majority of respondents (64%) indicated they would maintain the same number of full-time positions in 2024, while 27% planned to increase their workforce, and only 9% reported reductions. Over the next two years, 43% of respondents intend to maintain their current staffing levels, while 44% plan to expand.
The turnover rate among employees of European corporations that have entered the domestic market was relatively low. 61% of corporations experienced a turnover rate of less than 10%, and 22% reported a turnover rate between 10% and 20%. In terms of salaries, 55% of corporations raised wages, while 43% maintained the same level. In 2025, 54% of corporations expect wages to remain unchanged, while 42% plan to increase them. Additionally, corporations are making efforts to improve employee retention and job satisfaction alongside wages. The most commonly implemented policies include encouraging vacation use, flexible working hours, and remote work.
The most urgent challenges faced by European corporations operating in Korea continue to be regulatory and legal issues, with inconsistent enforcement of regulations and economic slowdown in key industries highlighted as major problems. However, Korea is still regarded as an attractive market, particularly scoring relatively high in areas such as tariffs, tax procedures, and openness to foreign goods and services.