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Guide to foreign investment

Foreigner Investment Guide    Foreigner Investment Guide

Foreign Investment System

Definition of FDI

FDI (Foreign Direct Investment) refers to an investment made by a foreigner for the purpose of establishing a continued economic relationship with a Korean corporation or a business owned by a Korean citizen, and is based on the FIPA (Foreign Investment Promotion Act) and other related laws.

Foreign Investment Promotion and Protection

  • Unless otherwise stipulated by law, a foreigner may carry out foreign investment activities in Korea without restrictions.
  • Protection of Foreign Investment.
    • Guarantee of outgoing transfers.
    • Exceptions on safeguards against foreign exchange transactions.
    • Ensuring national treatment.
    • Ensuring no discrimination against tax reduction and exemption

Foreign Investment Procedure

Investment Procedure

Investment Type

  • Acquisition of Shares or Equity of a Domestic Business

    This refers to possession of shares or equity of corporation of the Republic of Korea or a business owned by a Korean citizen for the purpose of establishing a continued economic relationship with the relevant corporation or business (including those being established) through participation in managerial activities.

  • Long-term Loans

    An investment is recognized as FDI if the foreign parent company of the foreign-invested company, a foreign investor, or a business under a capital investment relationship with the relevant foreign parent company and the foreign investor provides a loan with a maturity of 5 years or more for the relevant foreign-invested company.

  • Contribution of a Non-profit Organization (NPO)

    A contribution to an NPO is recognized as a foreign investment when the NPO has independent research facilities in the field of science and technology, and meets one of the following conditions:

    • Having 5 or more regular employees with 3 or more years of research experience and a bachelor's degree in the field of science and technology or with an advanced degree (master's/Ph.D) in a science and technology field; or,
    • Performing R&D for projects attended with high level technologies according to the Tax Exemptions and Exceptions Act.

Registration of foreign-invested company

A foreign investor (or its agent) or a foreign-invested company must register the foreign-invested company at the entrusted agency within 30 days of the occurrence of the causes as follows:

  • Completion of payment for the investment object (new share acquisition);
  • Acquisition of existing shares (existing share acquisition);
  • Acquisition of shares through mergers, etc. (new acquisition of CB conversion, spin-off, etc.); and
  • Completion of a contribution to a non-profit corporation (new acquisition through stock contribution).
  • Land-lease support at low cost (complex-type FIZ).
  • Tax reduction and exemption (standalone-type or complex-type FIZ).
  • Financial support (after an objective evaluation and consultation on high-tech businesses, large sized investments, etc.).

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