• go rss

Date   :


Sort   :

FDI Procedures & Incentives

Foreign direct investment (FDI) system, procedures and investment incentives

Foreign Direct Investment System

Foreign direct investment (FDI) refers to foreigners’ acquisition of the stocks or shares of a Korean company in order to build lasting economic relations, and generally involves participation in management or technology transfer.

Forms of FDI
  • Acquisition of the stocks or shares of a domestic company

  • Contribution to a Non-Profit Organization (NPO)

  • Long-term loans

Foreign Investment Promotion Act

The Foreign Investment Promotion Act was enacted to support and facilitate efforts to attract foreign investment, while the Rules on Foreign Investment and Consolidated Public Notice for Foreign Investment specify the restricted types of business and restriction details to protect foreign investors.

FDI Incentives

Forms of FDI Incentives
Tax Support

Most of the FDI incentives offered by the Korean government are provided via tax support.

  • Corporate tax 
and income tax reduction
  • Local tax 
(acquisition tax, property tax) 
  • Exemption from 
customs duties, etc.

(if submitted the application by 31 Dec 2018)

Cash Grants

For foreign investments that satisfy certain conditions, the central and local governments of
Korea may provide cash grants.

  • Land purchase 
  • Lease expense
  • Employment/education
/training subsidy
Industrial Site Support

Korea leases land to foreign-invested companies that meet specific requirements at a reasonable rate or for free.

  • Location support
  • Subsidy for difference
of sale price
  • Rent reduced·
  • Other support
Incentives & Qualifications
Incentives for FDI
Qualifications Incentives
New Growth Engines & Indigeneous-Tech Businesses
  • Technologies by field that fall into the categories of new growth engines and original technologies; and the establishment and operation of factories to do businesses utilizing related technologies, materials and production process.
  • Income tax, corporate tax: 100% for 5 years, 50% for 2 years after that
    (if submitted the application by 31 Dec 2018)
  • Acquisition tax, property tax: 100% for 15 years
    (check the ordinance)
  • Customs tariff, value-added tax, special consumption tax: 100% for 5 years
Foreign Investment Zones Individual type
  • Manufacturing: min. $30M
  • Tourism & resort, international convention: min. $20M
  • Logistics: min. $10M
  • R&D centers: min. $2M & min. 10 researchers
Complex type
  • Manufacturing: min. $10M
  • Logistics: min. $5M
  • Income tax, corporate tax: 100% for 3 years, 50% for 2 years after that
    (if submitted the application by 31 Dec 2018)
  • Acquisition tax, property tax: 100% for 15 years
    (check the ordinance)
  • Customs tariff: 100% for 5 years
Free Economic Zones
  • Manufacturing, tourism & resort, international convention: min. $10M
  • Logistics, medical institutions: min. $5M
  • R&D centers: min. $1M (min. 10 researchers)
Land Support
  • Min. 30% foreign investment
  • Reduction of rent fee
  • Support for infrastructure
Cash Grants
  • Min. 30% foreign investment
  • Manufacturing: Parts & materials specialty businesses, new growth engines and indigeneous-tech businesses
  • R&D centers: New R&D facilities (min. 5 researchers)
  • Negotiable


FDI Procedures

Foreign Investment Procedures

Foreign investment procedures consist of the following: foreign investment notification, remittance of investment funds,registration of incorporation & business, and registration of foreign-invested company.

  • Foreign investment
    (KOTRA or foreign exchange
  • Remittance of
    investment funds
    (foreign exchange bank, 
    carried through customs)
  • Registration of incorporation
    (court registry office)
  • Notification of incorporation
    and business registration
    (tax office or KOTRA)
  • Transfer of paid-in capital to
    corporate account
    (foreign exchange bank)
  • Foreign-invested company
    (initially notified  organization)
Follow-up Management

When changes occur in the shareholdings or the company name after registration of a foreign-invested company, the changes should be registered. When there is a cause for cancellation of registration, registration shall be cancelled by the authority of the Ministry of Trade, Industry and Energy, or the head of the entrusted organization.

  • Hours : Mon. through Fri.: 9:00-18:00 (lunch break: 12:00-13:00)
  • Address : IKP Building, 2nd fl., 7 Heolleung-ro, Seocho-gu, Seoul, Korea
  • FAX : (82-2) 3497-1611
  • Languages : English, Japanese, Chinese, Korean

ICC Information