Investment Opportunities in South Korea
Protection of Foreign Investment
- 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 .
- International Controversies Registered By UNCTAD
- Korea has been involved in no case of disagreement concerning foreign investment and up to now, bilateral disagreements have given rise to no expropriation. UNCTAD offers a database listing disagreements and the countries involved , complementary information about the evolution of settlement of international disputes concerning investment.
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International court of arbitration, International chamber of commerce
ICSID , International Center for settlement of Investment Disputes
- Member of the Multilateral Investment Guarantee Agency
Korea is a member of MIGA.
The MIGA website gives a detailed description of all the guarantees it proposes.
Country Comparison For the Protection of Investors
|South Korea||OECD||United States||Germany|
|Index of Transaction Transparency*||7.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||2.0||5.2||9.0||5.0|
|Index of Shareholders’ Power***||7.0||6.8||9.0||5.0|
|Index of Investor Protection****||5.3||6.0||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
- 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.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
There are several temporary solutions: Office in the president's private house, Office in the business centers, office rent in the privileged foreign investment area, etc.
Invest Korea Plaza (IKP) offers furnished office space and cutting edge conference facilities to foreign investors.
- The Possibility of Buying Land and Industrial and Commercial Buildings
- Risk of Expropriation
- The foreign investors have the compensation right if they are victim of expropriation.
- Forms of Aid
Tax Abatement, Exemption of Customs, Cash Grant, Location Incentive, Other supports (Renting).
Click here for more info.
- Privileged Domains
- Industry support service, High-tech industry business, R&D service, Manufacturing, Tourist service, Welfare facilities, etc.
- Privileged Geographical Zones
Industrial complex located close to a port or an airport, making it convenient for the businesses within it to engage in foreign trade, International airport area, Distribution complex or cargo terminals, etc.
Each local government is suggesting its own projects of development by giving investment incentives like tax reduction ,etc. to foreign investors including Jeju Special Self-Government province, Incheon, Busan -Jinhae, Ulsan, Gwangyagng, etc.
- Free Zones
Busan-Jinhae Free Economic Zone (BJFEZ),
Gwangyang Free Economic Zone (GFEZ),
Incheon Free Economic Zone (IFEZ)
- Organizations Which Finance
- Ministry of Commerce, Industry and Energy (MOCIE), Local governments.
- The Key Sectors of the National Economy
- Shipbuilding, Semiconductor, Automobile, Electronics (TV, Mobile phone,etc), Textile.
- High Potential Sectors
- Aerospace, Automobile & Auto parts, Biotechnology, Display, Environmental Industry, IT Industry, Logistics, Nano Industry, New and Renewable Energy Sources, R&D, Real Estate Development, Semiconductor, SOC, Tourism, Venture Industry.
- Privatization Programs
- The privatization of state-owned banks such as the Korea Development Bank and Woori Bank.
- Tenders, Projects and Public Procurement
Service des marchés publics, Tenders
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- Postal service, Railroad, Energy, Water
- Telecommunication services
- Educational institutions
- Arms, explosives, atomic energy,
- Sectors in Decline
Finding Assistance For Further Information
- Investment Aid Agency
Korea Trade Investment Promotion Agency (KOTRA)
Office of the Investment Ombudsman (OIO)
Invest Korea Plaza
- Other Useful Resources
Hi Korea e-Government for foreigner
Seoul Global Center
Free Economic Zone Planning Office
- Doing Business Guides
Korea - Your Fast Tack to Success by
Starting a Business in Seoul
South Korea Commercial Guide 2010 - Buy USA
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