November 28, 2024

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Chairman of AmCham Partners for the Future Foundation Jeffrey Jones (left), AmCham Korea CEO James Kim(second from right) and Vice Chair AmCham Board of Governors Jeon You-me (right) attend a press conference held at the IFC Forum in Seoul to commemorate the 70th anniversary of the US-Korea alliance. (AmCham)

The chairman of the American Chamber of Commerce in Korea called on the Korean government to offer flat income tax benefits for foreign workers on a permanent basis.

During a press conference held at the IFC Forum in Seoul to commemorate the 70th anniversary of the US-Korea alliance and the founding of AmCham Korea on Thursday, AmCham Korea CEO James Kim said the 20-year flat income tax benefit for foreign workers should be extended further, citing other countries who offer them on a permanent basis.

Currently, the Korean government offers a flat income tax rate of 19 percent for foreigners who work in Korea. The period for which this tax benefit is applied was extended from five years to 20 years beginning this year. Foreign workers are subject to normal progressive income tax rates of up to 45 percent afterward.

Aside from Kim, AmCham Board of Governors Chairman Henry An, Chairman of AmCham Partners for the Future Foundation Jeffrey Jones and Vice Chair of AmCham Board of Governors Jeon You-me attended the press conference.

Kim also talked about the high risks that CEOs in Korea have to take. He said it is one of the factors that make the country less appealing to foreign business operators.

“It would be beneficial to reduce the scope of CEOs’ criminal liability by shifting the focus from punishment to prevention. Compared to other regional hubs, Korea’s level of punishment for CEOs is much more severe,” he said.

Kim added that there are cases where CEOs are not responsible for the entire spectrum of businesses, but in Korea CEOs usually are.

During the press conference, Kim also highlighted the results of the 2023 AmCham Business Survey.

Conducted earlier this year, this survey collected AmCham members’ opinions on the business environment and the competitiveness of Korea.

“For two years in a row, Korea has been ranked as the second-most preferred destination for regional business headquarters in Asia after Singapore,” Kim said.

Labor policy, tax policy, CEO liability, IP protection and the digital economy were cited as the top five areas that need reform for Korea to better realize its potential as a regional hub.

Based on the result, Kim then stressed that he also sees Korea’s potential to become a global business hub.

“AmCham will continue to play a key role in connecting the US and Korean governments and business communities and look forward to working with the Korean Government to promote Korea as the best place to do business in the Asia Pacific," Kim said.

Founded in 1953, AmCham Korea is the largest foreign chamber in Korea comprised of more than 800 member companies and affiliates with substantial participation in the Korean economy.

By Song Seung-hyun (ssh@heraldcorp.com)