Doing business in South Korea in 2025: Tips for Canadian companies

From Samsung to Squid Game, Kia Motors to K-Pop, the Republic of Korea—commonly known as South Korea—is home to some of the world’s strongest brands. It’s a testament to the nation’s remarkable success in building a dynamic market economy in the wake of the devastating wars, poverty, political turmoil and financial crisis it endured in the 20th century.  

A global hub for high-tech goods, digital innovation and advanced manufacturing technology, South Korea is now the fourth-largest economy in Asia, and 12^th-largest in the world, with nominal gross domestic product (GDP) of US$1.9 trillion in 2024.  

Export Development Canada (EDC) has identified South Korea as a “hidden gem” for Canadian companies seeking to diversify from traditional markets. A gateway into the markets of the Indo-Pacific region, South Korea’s combination of high growth and stability offers sizable opportunities for Canadian exporters and investors.

South Korea’s political landscape has stabilized, following the 2024 constitutional crisis. The new president, Lee Jae Myung, won a decisive victory in the election held on June 3, 2025. The Democratic Party now controls both the executive and legislative branches of government, putting Lee in a position to implement his agenda aimed at boosting economic growth and consumption. 

Lee’s 123-point “Real Growth” platform sets ambitious targets, summarized as the 3.3.5. vision for South Korea:

• A Top 3 global leader in AI
• Increase annual economic growth to 3% (from the current 1.8%)
• A Top 5 global economy   

South Korea recently announced plans to set up a 150-trillion won (C$150 billion) National Growth Fund to drive economic growth by reshaping key industries. The country will invest in high-tech sectors and their supply chains to help them become more competitive. These policies and investments could enhance Canada-South Korea business opportunities in semiconductors, AI, biotechnology, digital transformation and green energy over the next five years—and beyond.

Strong political, social and economic connections between Canada and South Korea provide a clear pathway for trade. Both countries have a decades-long history of co-operation and established formal diplomatic relations in 1963. In 2022, Canada and the Republic of Korea established a Comprehensive Strategic Partnership, based on shared priorities in the areas of values, security, prosperity, sustainability and more. 

In 2025, Canada and South Korea are celebrating 10 years of the Canada-Korea Free Trade Agreement (CKFTA). To date, the agreement has made 93% of Canadian exports to South Korea tariff-free—it will reach 99.75% by 2032.  

In the 10 years since signing the CKFTA—Canada’s first free trade agreement with an Asia-Pacific nation—bilateral trade has been increasing. In 2024, South Korea was Canada’s seventh-largest trading partner and sixth-largest merchandise export market. That year, Canadian companies exported $7.6 billion of merchandise to Korea.  

Canada now exports more to Korea than to France and Italy combined. With liquefied natural gas (LNG) terminals on the West Coast now shipping to the Indo-Pacific, Canadian exports to South Korea are poised for further growth. 

South Korea’s 51.8 million citizens enjoy a high standard of living. In 2024, Korea’s per capita gross national income (GNI) was US$36,624, placing it sixth among countries with a population of more than 50 million—ahead of Japan and Taiwan. This collective purchasing power fuels South Korea’s thriving retail market, where demand for digital products and services, fresh and processed foods, luxury items and recreational goods is strong.  

“South Korean consumers are both value-driven and price-sensitive. They’re willing to pay more for quality products and premium global brands, but they research product quality and price carefully before making a purchase decision,” says Joonhyung Park, EDC’s senior regional manager for South Korea.

The Government of Canada and EDC have identified Korea as a market of opportunity for Canadian exporters, with distinct advantages that can provide pathways to increase our exports:   

• CKFTA offers stability and predictability for Canada-South Korea trade. With new tariffs and geopolitical shifts creating uncertainty in global trade, this agreement is an asset for businesses seeking market diversification opportunities. 
• “Brand Canada” is strong in Korea. Consumers perceive Canada as a trustworthy nation with a clean environment and abundant natural resources. These positive associations extend to everything from fresh foods to sporting gear and apparel. Canadian brands are leveraging this goodwill to grow in a robust market. South Korea is the fifth-largest country for retail sales in Asia, with a growing market for luxury goods. It’s also one of the world’s top markets for outdoor wear.     
• The governments of Canada and South Korea have expressed a desire to co-operate on supply chain resiliency and the clean energy transition, including shared research and development efforts with high potential for commercialization. The resulting initiatives may generate new opportunities for Canada’s critical minerals, advanced manufacturing and cleantech sectors.  

The most promising sectors for Canadian exporters include:  

• Agri-foods 
• Cleantech and cleantech infrastructure financing  
• Advanced manufacturing 
• Critical minerals 

As part of EDC’s Indo-Pacific strategy to boost trade in the region, EDC opened a representation in Seoul in 2023. EDC’s in-market team builds relationships with South Korean businesses and institutions to find opportunities that Canadian companies might otherwise overlook.  

After two years in the market, Joy Rankothge, EDC’s chief representative for South Korea, says “the energy and buzz about the Canada-Korea relationship is strong as ever—and it’s mutual. You can see it in the number of private sector and government visits, business delegations and trade missions happening in both countries. There’s a real desire to create new networks and grow trade.”

Since 2023, EDC has participated in numerous industry events and established partnerships with major South Korean entities, including:  

• Korea Eximbank—South Korea’s official export credit agency 
• SK Group—the second-largest conglomerate in South Korea 
• Korea Trade Insurance Corporation (K-SURE)—the official export credit agency under the Ministry of Trade, Industry and Energy 
• Lotte Shopping—Korea’s all-channel retail powerhouse, offering everything from household goods to luxury brands through department stores, hypermarkets, home shopping and e-commerce  

“Our relationships with local partners allows EDC to better support Canadian exporters on the ground and expand two-way trade between our countries,” says Rankothge. “We’re excited to see doors opening for Canadian companies in this vibrant market.” 
 

With limited domestic capacity in the sector, South Korea is a net food importer. In 2020, Canada was South Korea’s 10th-largest supplier of agri-food products, with exports worth $1.2 billion, and 12th-largest source of processed food imports. As CKFTA removes import duties from more Canadian agricultural commodities, agri-foods and food products, our share of the Korean market is primed for growth.

 Along with preferential market access, Canadian agri-food companies can benefit from shifting market preferences among Korean consumers:  

• Koreans are becoming more health-conscious and concerned about food safety. They want to buy from trusted sources.  
• Middle class consumers are willing to spend more to have higher-quality, higher-priced foods (meat, seafood, fresh produce and organic foods) in their diets.  
• Koreans are eating more traditionally Western foods, like dairy products and wheat-based goods, that Canada produces in abundance.  

The  Canada-South Korea Organic Equivalency Arrangement (CSKOEA), signed in 2023, allows Canadian organic processed foods to enter the market without additional certification. South Korea is also a major market for health and wellness products, nutritional supplements and functional foods (products enhanced with additional nutrients or beneficial substances).

Announced in 2020, Korea’s Green New Deal (GND) outlined the nation’s plan to accelerate the country’s clean energy transition and reach net zero by 2050. South Korea has earmarked approximately US$60 billion to develop renewable sources of energy. While progress to date hasn’t matched the plan’s initial ambitions, South Korea remains committed to reducing its dependency on fossil fuel imports and phasing out coal-fired power.    

Energy security is a priority for President Lee’s government. Recognizing the need for a stable power supply to support AI innovation, South Korea is now pursuing a balanced energy policy that integrates both renewables and nuclear—areas of Canadian strength. Canadian companies may find opportunities to partner with Korea on critical minerals, clean energy technologies and small modular reactors (SMRs).  

Once fully implemented, CKFTA will eliminate tariffs on all sustainable technology products, which will help Canadian producers compete against domestic players in the segment.

As an advanced manufacturing hub that relies on imported critical minerals, South Korea is highly motivated to diversify its critical minerals supply chain. Canada’s abundant resources, strong mining ecosystem and reputation for responsible business practices make us an appealing partner in the sector.  

South Korea has become a significant player in global mining investments, particularly in securing critical minerals for its high-tech industries. Large international companies, including POSCO, LG and Samsung, are working with critical minerals project developers to ensure they have the minerals needed to manufacture their products. 

Given Canada’s natural endowment of critical minerals, this represents a growing opportunity to Canada-Korea collaboration. South Korean companies have already invested in Canada, and further investments are expected in the future.

The Canadian and Korean governments have also agreed to deepen co-operation on critical minerals used in electric vehicle (EV) batteries and strengthen our strategic partnership on supply chain resiliency and battery and EV value chains.
 

South Korea has one of the most favourable business environments in the Indo-Pacific region. With an economy heavily driven by international trade, South Korea places very few restrictions on international investments and ownership and offers:  

• an open economy; 
• business-friendly government policies; and  
• improved standards of corporate governance.  

South Korea is also renowned for its first-rate infrastructure, commitment to innovation, well-educated workforce and low crime rate.   

But the business environment isn’t without its challenges. “South Korea’s consumer market is extremely dynamic. They’re setting regional and global trends right now,” notes Rankothge. “To be successful, Canadian companies will need to adapt to the fast-paced changes and scale up to meet the demands of the local market.” 

Some of the biggest barriers in South Korea for Canadian businesses include:   

• A complex regulatory environment 
• Managing logistics in a distant market 
• Strong competition from domestic and foreign suppliers  
• Not understanding local needs, tastes and rapidly evolving trends  
• Lack of familiarity with the domestic companies that dominate Korean retail   
• A hierarchical and insular business culture that many foreigners find difficult to navigate  

Given these complications, engaging a local partner who speaks Korean and understands local traditions, norms and processes can help Canadian businesses break into the market.  

Despite its growing openness and diversification, South Korea’s economy remains dominated by mega-conglomerates called chaebol. Some are household names in Canada: Samsung, Hyundai and LG. Usually family-run, these corporations wield extraordinary influence on South Korea’s politics and economy, accounting for up to 80% of the nation’s GDP.   

In that latter half of the 20th century, chaebol were instrumental in transforming South Korea’s economy from primarily agrarian to industrial. As the Korean economy evolves and becomes more open to new enterprises, the role of chaebol is changing. At the same time, their relevance and dominance across the economy remains.    

Canadian companies selling into South Korea should be prepared to navigate chaebol supply chains and intercompany networks.  Since the conglomerates are active across multiple sectors, successfully leveraging these networks has the potential to open doors to greater opportunities.   

As we implement EDC’s Indo-Pacific strategy in South Korea, our in-market representatives are committed to building strategic relationships with the country’s conglomerates to explore ways for Canadian exporters to participate in their vast supply chains. 

 If you’re interested in expanding to South Korea, EDC’s financial and knowledge solutions can help you understand the opportunities and make exporting less risky. Our Business Connections Program promotes Canadian capabilities in priority sectors to international buyers and introduces them to Canadian companies that can add value to their supply chains. 

“Working alongside our Team Canada partners, we’re committed to building strategic relationships with local market leaders, making connections for Canadian businesses and strengthening ties between our countries through trade,” says Rankothge of the key benefits to having a representation in South Korea.  

EDC is part of the Government of Canada’s trade ecosystem of experts available to help you save time, learn more about your target markets and identify the capital you need to grow. Led by the Trade Commissioner Service (TCS), this network of  solution-oriented departments and Crown corporations can solve export problems and offer new perspectives, so businesses, like yours, can confidently expand and succeed—at home and abroad. 

The provinces of Alberta, British Columbia, Ontario and Quebec also have export and investment promotion teams on the ground in South Korea. These offices raise the profile of their respective province in the market, build commercial relations and promote provincial exports.  

Across all sectors, you can find the support your business needs to thrive in this captivating market.    

Contact EDC to get started