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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 foreign direct investment
  • 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 is designed to facilitate foreign investment by supporting foreign investment and enhancing investors’ convenience. The Foreign Investment Promotion Act serves as the basic law for foreign investment, and its subordinate statutes include the Enforcement Decree of the Foreign Investment Promotion Act and the Enforcement Rule of the Foreign Investment Promotion Act, which prescribe matters delegated by the Foreign Investment Promotion Act and matters necessary for the enforcement thereof, and the Regulations on Foreign Investment and Technology Introduction.

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
    notification
    (KOTRA or foreign exchange
    bank)
  • 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
    notification
    (initially notified  organization)
Follow-up management of foreign investment

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.

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) 
reduction
  • Exemption from 
customs duties, etc.
Cash grant

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

  • Land purchase 
expense
  • 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·
subsidized
  • Other support
  • Hours : Mon.thru 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 and Korean

ICC Information

TEL

1600-7119