South Korea

Investing

FDI in figures

For four straight years from 2004, the amount of FDI flowing into Korea has consistently surpassed USD10 billion. USD12,8 billion in 2004, 11.6 in 2005, 11.2 in 2006 and 10.5 billion in 2007.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	8,980	7,050	4,950
FDI inward stock (millions USD)	n.c.	n.c.	70,974.0
Performance Index*, world ranking	116	115	123
Potential Index**, world ranking	17	17	n.c.
Number of Greenfield investments	106	119	84
FDI inwards (in % of GFCF)	4.5	3.0	1.9
FDI stock (in % of GDP)	n.c.	n.c.	8.0

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose South Korea

Strong points

Korea is the world's 11th largest economy and 12th largest trading nation.
Highly educated and skilled human resources, R&D capabilities, and the well-developed infrastructure in Korea.

Weak points

Over-regulation, the high cost of human resources, places or building and the restrict competition.

Government measures to motivate or restrict FDI

Protection of Foreign Investment:
- Guarantee of External Remittances;
- Identical treatment with domestic firms in regard to the business operations;
- Tax abatement provisions of the tax law are equally applied to foreign investors and foreign-invested firms.

Restriction or prohibition of Foreign Investment: Public administration, educational organizations, and national defense, etc.

Visit Invest Korea website for more information.

Bilateral investment conventions signed by South Korea

Korea is a signatory to many conventions.
UNCTAD allows you to visualize the list of conventions signed by Korea, and to download these conventions .

Administrative procedures relative to foreign investment

Freedom of establishment: Guaranteed.
Acquisition of holdings: Possible.
Obligation to declare: Acquisition of the stocks or shares of a domestic enterprise:
-Minimum initial investment to qualify as foreign investment: 50 million won;
-Foreigner's investment hold 10% or more of the total shares along with voting rights or total equity investment.

Long-term loan provided by a foreign investor:
- A firm that owns 50% or more of the total issued shares or equity investment of its foreign parent firm;
- A firm that owns 10% or more of the total issued shares or equity investment of its foreign parent firm;
- A firm of which 50% or more of its total issued shares or equity investment is owned by its foreign parent firm; or -
- A firm of which 50% or more of its total issued shares or equity investment is owned by a firm that owns 50% or more of the foreign parent firm's total issued shares or equity investment.
Competent organization for the declaration: Invest Korea or KOTRA trade offices in Korea
Requests for specific authorizations: Government's approval is required in agriculture, forestry, fishing, power generation, publishing, Telephone and other communication services, broadcasting, air transportation, coastal transportation, etc.
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