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By Park Jae-hyuk

Most foreign companies that have invested in Korea are reluctant to increase their investments and hire new workers this year, a survey showed Wednesday. The companies expressed hope that the next Korean president pays attention to creating a more business-friendly environment.

According to the Federation of Korean Industries' (FKI) recent survey of foreign-invested companies, nine out of 10 respondents answered that they do not have any plans to invest in Korea this year or have yet to make their investment plans for this year.

Only 8.9 percent of them have drawn up investment plans for this year, the FKI said.

Among the companies having 2022 investment plans, only 22.2 percent had plans to increase their investments this year, as 77.8 percent responded that the size of their investments for this year will be similar to those of last year.

The survey also showed that the combined number of foreign firms that do not have any plans to hire new employees this year and that have yet to draw up such plans accounted for 61.4 percent of the respondents.

Among the companies planning to hire new employees this year, 51.3 percent said that the number of new employees they will hire will be similar to last year's, while 46.2 percent answered that they will hire a larger number of new employees. The remaining 2.5 percent plan to hire a smaller number of new employees.

The foreign-invested companies in Korea mentioned the economic slowdown caused by the prolonged COVID-19 pandemic as the main reason for their reluctance in increasing investments and hiring this year.

Some of them also cited the nation's heavy corporate taxes and insufficient incentives for investment.

Among the respondents, 34 percent advised the next administration to prioritize offering tax incentives and subsidies to employers, if it wants to create more jobs.

The combined number of foreign firms that asked for either moderation of the minimum wage, the introduction of flexible working hours to a wider range of fields or a more flexible labor market accounted for 48.9 percent of the respondents.

"Considering the difficulties facing businesses, the new government should expand incentives for companies increasing investments and employment," a FKI official said. "It should also focus on creating a more business-friendly environment."

When the Korea Enterprises Federation surveyed foreign-invested companies in Korea last November, more than half of them said that the country needs to reform its labor regulations.

"Labor costs and labor relations remain areas of uneasiness," the European Chamber of Commerce in Korea also said last week, after announcing the result of its annual business confidence survey.