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Foreign Direct Investment (FDI) Trends
- FDI in Jan. – Sept.: USD 10.75 bil. on notification basis, USD 6.45 bil. on arrival basis

1. Overview of FDI in Jan. – Sept.

  • FDI from Jan. to Sept. this year decreased slightly YoY, but maintained a steady growth compared to the last five years.
  • Notified FDI reached USD 10.75 billion, falling by 4.0 percent from the same period last year (USD 11.2 billion), but rising by 29.5 percent compared to the average of the last five years (USD 8.3 billion)
  • FDI on arrival basis reached USD 6.45 billion, decreasing by 11.3 percent year-on-year. However, it represented a 22.6 percent increase from the average of the last five years (USD 5.26 billion).

[ FDI Trends in Jan. – Sept. for the Last Five Years (in USD 100 million)]

2. FDI Trends in Jan. – Sept. by sector (notification basis)

  • o Growth was seen in investment from the U.S. and EU, investment in the service sector, and investment in the form of M&As and new investment. On the other hand, contraction was seen in investment from Japan, investment in manufacturing, and investment in the form of greenfield and reinvestment.

3. Key Characteristics of FDI in the Third Quarter (Jul. – Sept.)

  • Japanese companies’ investment in Korea decreased substantially due to Japan’s overall slowdown in foreign investment, a persistent low yen and a high base effect of 2012.
    - However, because most of the investment from Japan that had been notified by last year are being carried out as scheduled, FDI from Japan on arrival basis in Jan. – Sept. (USD 2.19 bil.) surpassed FDI on notification basis during the same period (USD 1.96 bil.).
  • As Korea continues to see a steady inflow of foreign investment from U.S., EU and Japanese companies with high technology, the investments are expected to created quality jobs.
  • Also, large-scale investments in the service industry, including finance, insurance, business services and leisure complexes, are underway.

4.Future Plans

  • Despite negative factors such as decreased investment from Japan and the U.S. and contraction in domestic investment, Korea is expected to achieve its FDI target set in the beginning of the year (USD 13.5 bil. on notification basis and USD 8 bil. on arrival basis) through the President’s sales diplomacy and other investment attraction activities.
  • The government will pass the amendment to the Foreign Investment Promotion Act, which is still pending at the National Assembly, and provide more incentives to investments that create jobs, in order to strengthen the nation’s foundation for investment attraction.
    - Also, investment activities outside of Seoul and the metropolitan area will be strengthened through cooperation among the central government, local governments and KOTRA (Invest KOREA). Ultimately, such activities will contribute to attracting foreign investment that creates quality jobs.

Source: The Ministry of Trade, Industry and Energy (October 25, 2013)
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