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)
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.
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
(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
(foreign exchange bank)
- Foreign-invested company
(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.
Most of the FDI incentives offered by the Korean government are provided via tax support.
For foreign investments that satisfy certain conditions, the central and local governments of
Korea may provide cash grants.
Industrial site support
Korea leases land to foreign-invested companies that meet specific requirements at a reasonable rate or for free.
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