international business environment Legal considerations
international business environment Legal considerations
The legal aspects are important for the business choice. Laws are different in every country. Laws would regulate business practice, define the manner and set down the rights and obligations. This made business have to run within the border set by law and definitely affects the efficiency and profitability when running business in that country. The type of legal system.
The legal system in Spain and Korea is based on civil law, while court precedents are not granted official status as law. The Spanish legal system is based on comprehensive legal codes and laws rooted in Roman law, as opposed to common law, which is based on precedent court rulings. Because Japan occupied Korea from 1910 to 1945, the Korean legal system resembles the Japanese system. After the occupation however, there were attempts to adopt many aspects of the American legal system. It must be remembered that the first civilian government commenced only in 1992, and thereafter, increasingly more democratic reforms have taken place.1 Both countries use contracts and they are important for doing business in both countries. Neither Korea or Spain has advantage to the type of legal system. The protection of property right
The definition of property right: In economics, property usually refers to ownership (rights to the proceeds of output generated) and control over the use of the means of production. They may be owned privately, by the state, by those who use it, or held in common by society.2 The world property right index 2012 shows the differences between the countries and the country’s world ranking. South Korea and Spain are both in the top 40 of the index. Spain ended this year on the 35th place and South Korea on the 40th place. The overall score off all the points together we can say that Spain compared with Korea is better in protection of property rights. In the figure on the next page we compare South Korea with Spain. The higher the score the better protection of property right. Property right is important for running a business because the better protect the better is the stability of the company.
Overall score South Korea vs. Spain in the international world index 2012
The protection of intellectual property
Intellectual property is a juridical concept which refers to creations of the mind for which exclusive rights are recognized. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights and in some jurisdictions trade secrets. 4 South Korea has an government organization called KIPO. This is the governmental authority in charge of intellectual property in Korea. The mission of KIPO is to help Korea become an advanced country by providing legal and institutional administration for the creation and utilization of highly creative, value-added intellectual property and by promoting technological innovation and industrial development. In Spain the main law regulating intellectual property protection is the 1996 Intellectual Property Law. With regard to industrial property, no single law covers all aspects. Instead, this is regulated by a package of different laws, including the Patent Law, trade mark law and the law on the legal protection of industrial designs5 In the international property right index, South Korea and Spain score exactly the same and ends on the 27th place. There are 130 countries in the index so the both are trustful countries. Corruption
A country where corruption is low is a really important factor to choose for a country. Corruption costs a lot of money and affects the company negative. Korea has an independent commission against Corruption. The Korea Independent Commission Against Corruption is an independent commission that reports to the President in its fight against corruption and the consequent promotion of the clean administration of South Korea. In a coordinated effort with other monitoring agencies, also known proverbially as watchdogs, the KICAC is involved in producing policies and orchestrating preventive activities.6 Spain has different organisations to fight against corruption. The Special Attorney General’s Office for the Repression of Economic Offences related with Corruption(ACPO) is the biggest and well known organisation in Spain. 7
According to the Corruption perception index Spain scores better than South Korea. The Corruption Perceptions Index ranks countries/territories based on how corrupt a country’s public sector is perceived to be. It is a composite index, drawing on corruption-related data from expert and business surveys carried out by a variety of independent and reputable institutions. The difference between the two countries is not that big but Spain would be a saver option.
Spain and South Korea have both a minimum wage8. The minimum wage in Korea is lower than in Spain which is positive for the production costs. The maximum and average working hours in Spain are also lower than in South Korea. The maximum working hours in Spain are 40 hours a week and in South Korea 48. This is positive for the production because you can have longer days and the costs are lower as well. Forced labor and child labor are prohibited in both countries. In Korea children under the age of 18 may work under certain conditions. In spain the minimum age is 16. To do so, in Korea they require a special employment certificate from the Labor Ministry, which is rarely issued because education is compulsory until the age of 14. Children under the age of 18 who wish to work require written approval from their parents or guardians.
South Korea is connected with the AECEN. This is the Asian Environmental Compliance and Enforcement Network and there is an agreement between 16 Asian countries dedicated to improving cooperation with environmental laws in Asia. The mission of the Ministry of Environment in South Korea is to protect the national territory from threats of environmental pollution and to improve the quality of life for the public. This includes ensuring the people of South Korea can enjoy the natural environment, clean water and clear skies. Furthermore, the Ministry aims to contribute to the global efforts to protect the Earth. In February 2008, the Korea Meteorological Administration became an affiliate of the Ministry of Environment to facilitate countermeasures against climate change In Spain the central government represents Spain in the European Union and transposes European legislation into Spanish law. It is responsible for adopting national legislation on the basic and common aspects of the environment. Both countries take the environment more than serious because it can effect business and people. The better and stricter the environmental law in the country the better and more effective you can produce your products. Nowadays the mission of most companies is to be green and fight against global warming. The regulations in Europe / Spain are more strict than in Asia what can be a reason to choose for Spain. The investment in expensive machinery and products to produce is maybe higher at the start but with better machinery companies can produce more cleaner and more effective.