The Korean government strives continuously to improve the investment environment for foreign investors.
Investors have a broad range of locations to choose from nationwide, including 7 free economic zones, 105 foreign investment zones (26 Complex-types, 77 Individual-types, 2 Service-types) and 13 free trade zones (7 Industiral Complex-types, 6 Ports and airports-types) as of February 2019. The Korean government provides tax breaks, cash grants and other incentives through the Foreign Investment Promotion Act.
The Korean government continues to actively expand incentives to attract foreign investment. One of the prime examples is the government's recent decision to make a temporary special measure for foreign wokers' income tax permanent. Starting from Jan. 1, 2015, the measure provides income tax rate of 17% to foreigners working at Korean headquarters of global companies regardless of income level, which is less than half the standard 38% individual income tax rate in Korea.
The D8 foreign investor visa provided to headquarters staff will also have its current 1- to 3-year validity period extended to a maximum of 5 years. Income tax for foreign employees at R&D centers is reduced by half for two years.
The Korean government opened the Regulatory Information Portal in July, 2015 in order to better reflect the opinions of foreign investors when deciding major policies that impact foreign investment.
Foreign-invested companies can search enacted or revised regulations via the portal and submit their opinions. Foreign investors can attend and comment on policies at regular meetings of the Regulatory Reform Committee throughout the year. Some foreign investors are also invited to regular policy briefings and meetings, together with the standing committees of the National Assembly and related government agencies. The central and local governments will strive to attract foreign investment.
Invest KOREA is the national investment promotion organization of Korea and part of the Korea Trade- Investment Promotion Agency (KOTRA). It helps foreign companies enter the Korean market by providing a one-stop service that includes investment consulting and support with location searches, company establishment, investment notification, incentive application, and other essential services related to starting a business in Korea. Invest KOREA’s network includes 36 overseas KOTRA offices that provide investment information and consulting services to local companies considering investing in Korea. Invest KOREA also operates Invest Korea Plaza, Korea’s first business incubation center for foreign companies. It provides furnished office space, conference facilities, and secretarial and other essential services at a reasonable price for foreign-invested businesses starting up in Korea.
The World Bank has praised Korea’s Foreign Investment Ombudsman system as a global model for FDI promotion and the prevention of investor-state disputes.
Established in October of 1999, Korea’s Office of the Foreign Investment Ombudsman has gained international attention for its remarkable track record. The Foreign Investment Ombudsman is appointed by the president of Korea, and his office helps resolve the grievances of foreign-invested companies.
The Korean government has designated FDI coordinators in 21 central government agencies, including the Ministry of Strategy and Finance, Ministry of Trade, Industry and Energy, Ministry of Environment and Ministry of Employment and Labor, to build a system for close and effective communication between Korean government agencies and foreign-invested companies. The coordinators also act as a channel to collect opinions from foreign-invested companies and resolve their grievances when enacting or revising laws under their jurisdiction.