Pangyo Techno Valley south of Seoul is quickly becoming a haven for foreign tech start-ups who are drawn by the fast-paced and efficient work environment. On a recent visit to a 607 sq.m office at the Start-up Campus there, several groups of foreigners were in evidence, giving the impression of a library at a university overseas.

Sampsa Siitonen of Finnish water-treatment company SansOx said, "Korea has the potential of becoming a test bed for cutting-edge technology. We chose Korea as our foothold in foraying into the Asian market."

The company developed water purification technology using ozone and infrared light. "A small Korean manufacturer will start making our product soon," Siitonen said, and the company is hiring two Korean workers this year.

Most foreign tech start-ups setting up shop at Pangyo Techno Valley are small players with fewer than 10 workers established just two to three years ago. At present, there are around 40 of them, specializing in artificial intelligence, fintech and high-tech medical devices.

They were selected by a government start-up support program called the K-Start-up Grand Challenge, which aims to attract foreign promising businesses to make the country a Asian hub for tech start-ups. Last year, it drew 1,770 teams from 108 countries vying for a spot.

Young foreign entrepreneurs also pointed to the world-class communications infrastructure and hardware technology like semiconductors and displays in Korea. They say the U.S.' Silicon Valley may have talented workers and wealthy investors, but Korea has the world's best communications infrastructure and hardware.

Another plus is the fact that Korea is home to legions of tech-savvy customers who are eager to try out the latest gadgets and technologies