• Foreign investment through acquisition of newly-issued stocks includes:
– Establishment of a new company alone (100% subsidiary) or through a joint venture with a Korean company;
– Participation in capital increase of a domestic company or foreign-invested company.
• Investment Procedure
– The foreign investor or its proxy submits the FDI notification form to any Korean bank (headquarters or branch), Invest KOREA, or domestic and overseas offices of KOTRA and receives a certificate of notification;
– After arrival of the foreign capital a certificate of purchase of foreign currency is issued. Or in case of importing capital goods as FDI in kind, a confirmation of completing the importation of capital goods is issued;
– The registration of incorporation has to be filed at the competent authority (proxy service for the registration process is provided free of charge by Invest KOREA);
– For company registration, it shall be applied within 30 days from the date the required payment was completed at the location where the FDI notification was conducted or Invest KOREA;
– Even if the payment is not completed, it is possible to file the company registration for foreign investment that is more than 100 million KRW and more than 10%.
• However, foreign-invested companies that have been designated as eligible to receive tax exemption before launch of business, have to apply for business registration within 20 days from the date of business commencement at the relevant tax office. Furthermore, notification of incorporation has to be filed within 30 days from the date of registration of incorporation. It is advantageous to apply for the business registration before going through the customs (for capital goods in kind) or before concluding the contract (for real estate acquisition) in order to receive a refund of VAT.
• When importing capital goods such as investment in kind, application for business registration has to be made prior to registration of incorporation and the importation of capital goods in order to receive an exemption of VAT. It is possible to apply for the business registration at the Foreign Investor Support Office (FISO) of Invest KOREA.
