South Korea: Investing

FDI in Figures

Under the effect of the world's recession, the flows of foreign direct investment (FDI) have reduced in 2009; later on, they started  to slowly increase again with the recovery, a trend that should be confirmed in 2011.

South Korea's appeal in terms of foreign direct investment (FDI) is the result of the country's fast economic development and the specialization of its industry in new information and communication technologies. However, the lack of general transparency in regulations is a major concern to foreign investors.

Why You Should Choose to Invest in South Korea

Strong Points

The Korean workforce is highly skilled. The R&D capabilities, as well as the quality of the infrastructures are deciding strong points for investors.

Weak Points

The laws and national regulations are restrictive and the manpower cost is high. Private real estate, as well as renting office or shop premises is expensive. Lastly, competitiveness is relatively restrained.

Government Measures to Motivate or Restrict FDI

Korea has implemented measures in order to protect Foreign Investment:
- External Remittance guarantees;
- Identical treatment to domestic firms with regard to business operations;
- Tax deductions provisions.

However, there are restrictions or prohibitions in terms of foreign investment in sectors of public administration, educational organizations, national defense, etc. For more information, see the Invest Korea website.

Bilateral Investment Conventions Signed By South Korea

Korea is a signatory to many conventions.
UNCTAD allows you to visualize the list of conventions signed by Korea, and to download these conventions .

Procedures Relative to Foreign Investment

Freedom of Establishment

Guaranteed.

Acquisition of Holdings

Possible.

Obligation to Declare

Acquisition of the stocks or shares of a domestic enterprise:
-Minimum initial investment to qualify as foreign investment: 50 million won;
-Foreigner's investment hold 10% or more of the total shares along with voting rights or total equity investment.

Long-term loan provided by a foreign investor:
- A firm that owns 50% or more of the total issued shares or equity investment of its foreign parent firm;
- A firm that owns 10% or more of the total issued shares or equity investment of its foreign parent firm;
- A firm of which 50% or more of its total issued shares or equity investment is owned by its foreign parent firm; or -
- A firm of which 50% or more of its total issued shares or equity investment is owned by a firm that owns 50% or more of the foreign parent firm's total issued shares or equity investment.

Competent Organization For the Declaration

Invest Korea or KOTRA trade offices in Korea

Requests For Specific Authorizations

Government's approval is required in agriculture, forestry, fishing, power generation, publishing, Telephone and other communication services, broadcasting, air transportation, coastal transportation, etc.

Click here for more info.

Investment Opportunities

Investment Aid Agency

Invest Korea
Korea Trade Investment Promotion Agency (KOTRA)
Office of the Investment Ombudsman (OIO)
Invest Korea Plaza

Tenders, Projects and Public Procurement

Service des marchés publics, Tenders
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide

Other Useful Resources

Hi Korea e-Government for foreigner
Seoul Global Center
Free Economic Zone Planning Office

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