What is Foreign Direct Investment Company?

Foreign Direct Investment (“FDI”) refers to a foreigner establishing a new entity in Korea, or acquiring shares or equities of existing Korean company, for the purpose of establishment of constant economic relationship with Korean companies such as participation in management or collaboration in technologies.

FDIs can take various forms including the establishment of new entity in Korea, acquisition of shares or equities of Korean company, contribution to non-profit entity, or long-term loan among others. Our service is mainly focused on the establishment of new entity and acquisition of shares or equities of Korean company.

Requisite Terms and Conditions of FDI

- Investment of KRW 100 million or more per one foreign investor
- Possession of 10% or more of the total number of shares issued in the company established

Calculation of Foreign Exchange Rate

Incentives for FDI

- Guaranteed overseas wire transfer / remittance: in case of companies registered as FDI companies, overseas wire transfer / remittance of profit dividend, liquidated amount, sales amount of shares, etc., other principal, interest, and commissions among others is guaranteed.

- Tax support: Korean government and local governments offer tax discounts for corporate tax / income tax, local tax, and custom duty and tariff in accordance with the relevant laws and conditions.

- Visa and stay in the country: For FDI companies, their officers and employees can receive D-8 visas and thereby freely enter, leave, and stay in the country.

D-8 Visa Process

Examples of incentives: Incheon Free Economic Zone

Other favorable benefits for foreign investors

Change to residential (F-5) status
(stay for 5 years or more, investment of USD 500,000 or more + employment of five Korean citizens)
Employment of foreign housekeeping assistant permitted
(investment of USD 500,000 or more)
Operation of (automatic) immigration inspection checkpoint exclusive for foreign investors
Operation of stay permission counters exclusive for foreign investors
Exemption of various stay permission commissions for foreign investors
Increase in the maximum cap period at the time of application for stay

Investment Process

01. Foreign investment filing
(KOTRA or foreign exchange bank)
02. Remittance of investment fund
(foreign exchange bank and carry-on through customs)
03. Registration of company establishment
(court registry office)
04. Company establishment notification and business registration
(tax office and KOTRA)
05. Wire transfer of paid-in capital to company’s bank account
(foreign exchange bank)
06. Registration as FDI company
(organization to which the initial filing was submitted)