FDI
Namu Law's Service
The Procedure
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The Procedure
Documents
Intro to FDI > FDI
 

FDI

Defiition of Foreign Direct Investment

  • FDI refers to an investment made in order to forge lasting economic relations with a corporation of the Republic of Korea or a company run by a national of the Republic of Korea

    Under the Foreign Investment Promotion Act, FDI should meet the following conditions

    • The amount of investment should be 100 million won or more.
    • A foreigner should own 10 percent or more of either the total number of voting stocks issued by a Korean corporation or a company run by a national of the Republic of Korea, or its total equity investment

Forms of Foreign Direct Investment

    • Acquisition of the stocks or shares of a Korean company
    • A foreign parent company’s provision of long-term loans with a maturity of five years or longer to a foreign-invested company
    • A foreign national’s contribution to a non-profit organization.

    It is regulated by the Foreign Investment Promotion Act and other related laws.

How Foreigners Advance Into Korea

  • There are three ways by which foreigners(foreign corporations) can enter Korea for business purposes

    • Establishing a local corporation
    • A local branch
    • A liaison office

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.

    The procedures applied to foreigners are basically the same as the ones applied to Koreans with the exception of two additional steps

    • Foreign investment notification
    • Registration of foreign-invested company.

    Where a foreign investor registers a privately-owned business, ‘registration of incorporation’ is not required.

 

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