What are the benefits of foreign direct investment?

♦ General benefits:

– Guaranteed overseas remittance

• Remittance is guaranteed for dividends and capital from the sale of shares and equity owned by the foreign investor depending on the contents of the permission or report at the time of the said remittance.

– Equal treatment with Korean nationals

• Foreign investors and foreign companies shall be treated equally in terms of business activities except for certain cases stipulated otherwise by law.

Foreign investors may enjoy more favorable treatment in terms of tax reductions and company or factory site locations.

• If the import of capital goods is notified at and confirmed by the Bank of Korea or any of KOTRA’s offices, it will be recognized as import approval pursuant to the Foreign Trade Law.

– Facilitated administrative procedures for investment in kind

• For FDI in kind, foreign investors need to apply for confirmation on completion of FDI in kind after customs clearance by the Korea Customs Service. This confirmation shall be regarded as a written report of investigation by the investigator pursuant to Art. 203 of the Non-Contentious Case Litigation Procedure to facilitate the administrative process.


♦ Tax incentives

-Tax incentives are provided, if the foreign company or investor meets the requirements to receive tax incentives as stipulated in the regulations for “tax reduction and exemption for foreign investments” in FIPA. Businesses eligible for tax incentives have to be in the hi-tech or industry-supporting service business in order to receive a reduction or exemption from national or local tax for a specified period of time.

♦ Lease of national and local government properties

-Land, factories and other properties owned by the state or local governments (hereafter ‘land’) can be used by, leased or sold to foreign-invested companies (even if the business is not subject to tax incentives).
If national properties are leased to foreign investors or companies, then it is possible to reduce the rent.

Exemption from Customs Duty

-Capital goods used directly for businesses, which are eligible for tax incentives and are notified by acquiring newly-issued stocks are subject to customs exemption:

• 1. Capital goods received from foreign investors that are used as a means for domestic or foreign payment.•Capital goods that are imported by the foreign investor as a means of investment.