Understanding Foreign Direct Investment (FDI) in South Korea: A Comprehensive Guide

Foreign Direct Investment (FDI) involves establishing a new corporation by a foreign entity or individual, or acquiring shares or equity in domestic enterprises, fostering continuous economic relationships and management participation.

Types of Foreign Direct Investment

1. Acquisition of Shares or Equity in Domestic Enterprises:

   • Minimum investment of 100 million won.
   • Must own 10% or more of the total voting shares or total investment amount.
   • Exceptions include the dispatch of executives or a contract for appointing executives.

2. Long-term Subsidiaries:

   • Subsidiaries overseas (foreign direct investment corporations) of foreign-invested companies or individual foreign investors.
   • Includes companies with capital investment relations with such entities, providing support for five years or longer.

3. Contributions to Non-profit Corporations:

   • Reinvestment of undistributed retained earnings of domestic foreign-invested companies.

Required Documents for Foreign Direct Investment Declaration

• Two copies of the Foreign Investment Report Form for each investment type.
• Proof of nationality of the foreign investor (passport or official certificate issued by the government of the investing country).
• Notarized power of attorney and identification of the representative (if representing the foreign investor).
• Consent form for the collection and use of personal information and unique identification information.
• Other specific documents as required for each investment type.

Flowchart of Foreign Direct Investment Procedures

1. Consultation and Preparation of Investment Declaration Form (Bank):

   • Initial consultation and preparation of the necessary declaration form.

2. Submission and Issuance of Investment Declaration Certificate (Bank):

   • Submit the declaration form and receive the investment declaration certificate from the bank.

3. Inflow of Foreign Capital (Telegraphic Transfer/Cash Importation):

   • Transfer or import the foreign capital into South Korea.

4. Handling of Investment Funds (Payment of Share Capital/Bank):

   • Manage the investment funds, including payment of share capital.

5. Incorporation Registration and Business Registration (Court Registry Office/Tax Office):

   • Register the incorporation and business at the court registry office and tax office.

6. Issuance of Certificate of Registration for Foreign-invested Enterprise (Bank):

   • Obtain the certificate of registration for the foreign-invested enterprise from the bank.

Conclusion:

Embark on your journey into South Korea FDI with confidence. Whether you're exploring investment opportunities, managing documentation requirements, or seeking expert guidance through the registration process, our team is here to support you every step of the way. Contact us today to unlock the potential of foreign direct investment in South Korea.