[Expert Column] Localization Is No Longer a Choice: Korean Organizations in the U.S. Now Reach a Turning Point for Growth

>>The Korea Daily - Expert Column Article<<

Written by Stella H. Kim, SPHR

Published September 25, 2025

[HRCap 2025 Localization Playbook Series]

② HR Strategies for Korean Companies in the U.S.

- Investing in Business Setups for Sustainable Growth

Stella H. Kim, SVP, Head of Americas & CMO at HRCap

Breaking into the U.S. market cannot be achieved through product competitiveness alone.

While an increasing number of Korean companies are setting up and expanding their U.S. subsidiaries, simply establishing a legal entity and focusing on revenue growth is no longer enough. How the organization is originally set up and how risks are systematically managed will ultimately determine survival.

According to the U.S. Bureau of Labor Statistics (BLS), 20% of new businesses fail within their first year, and more than half shut down within five years. Foreign companies face compounded challenges, including language and cultural barriers, complex labor laws, visa delays, tariff burdens, and heightened regulatory scrutiny. Yet one too many firms still treat business setup as a mere administrative process, addressing rising HR, legal, visa, and customs compliance functions only reactively. This approach results in costly production delays, loss of tax incentives, and eroded credibility.

So then, which HR strategies do Korean companies need to establish a strong foothold in the United States? The answer lies in implementing systematic localization strategies from the very early business setup stages.

The success of any U.S. subsidiary depends on strong governance and proactive risk management from day one. Companies that neglect essential requirements such as incorporation filings, tax registrations, banking and payroll systems, licenses and permits, HR compliance documentations, annual reporting, and tax filing expose themselves to significant risks. To mitigate such challenges, organizations must establish clear governance and accountability between headquarters and their U.S. subsidiaries, build structured collaboration processes, and deploy proactive systems to monitor visa, labor, and customs compliance.

HRCap, a Global Total HR Solutions Partner, leverages our HR Consultants and advisory partner network in tax, labor, and real estate to provide comprehensive total support for our clients’ initial business setup. This includes entity establishment, tax and labor compliance, HR documentation, and site selection, which are all critical steps for a secure and sustainable launch in the United States.

Additionally, visa challenges are becoming increasingly difficult. Competition for the H-1B visa has intensified, and newly announced application fees of up to $100,000 have raised barriers to hiring skilled talent. To adapt, companies must pursue multi-visa strategies while adopting a two-track dual leadership model that balances headquarters’ core skills with localized expertise, as discussed in our previous column. Only then can they mitigate risk and ensure sustainable survival.

To achieve sustainable growth, Korean companies must now take on four critical changes:

1. Establish clear HR governance with defined reporting and decision-making structures from the initial business setup

2. Engage HR, legal, tax, and labor experts early on to drive proactive risk management

3. Diversify workforce portfolios by leveraging multiple visa types and developing both global and local talent

4. Implement integrated training programs that foster collaboration and retention between dispatched and local employees

   
   

Business setup is not merely a starting engine, but a pivotal turning point that determines survival and long-term growth. Only companies that properly invest in localization strategies from the very beginning will take root in the U.S. market and yield enduring fruit for our future generation.

Stella H. Kim, SPHR

HRCap – SVP, Head of Americas & Chief Marketing Officer