Obstacle to Investment
It has been pointed out that the Korean government’s excessive regulations on the Internet and mobile industry are causing domestic and foreign investors to refrain from investment.
According to investment consulting firm Fifth Era’s recent report, 89% of global investors in the Internet industry are thinking that the legal environments of their investment destinations are affecting their investment activities and 75% of them are feeling uncomfortable with investing in business models subject to vague regulations. The report was drawn up based on surveys answered by 475 professional investors in the industry, each of them having a net asset of at least US$1 million or an annual income of at least US$0.2 million.
34 of the respondents were Korean and almost all of them said Korea’s legal environments have a negative effect on their investment activities. Fifth Era added that this is leading to a decline in investment by foreign investors.
“For investors, returns are the top priority and their investment in startups inevitably entails various types of risks,” the consulting firm explained, continuing, “If vague laws and regulations are added, they cannot but hesitate in the face of a higher level of uncertainties.”