The foreign investment is classified into five types and is as followings:

1) Foreign investment according to the acquisition of new shares, etc.

The participation in the establishment of a new entity (sole or joint) or in capital increase of domestic enterprises (including foreign-invested enterprises)

2) Foreign investment according to acquisition of existing shares

The acquisition of existing domestic shareholders of domestic corporations by a foreigner (or foreign-invested enterprise)

3) Foreign investment by long-term loan
When a foreign investment company’s 1) overseas parent company ii) foreign investor iii) a company with capital investment relationships with a foreign parent company iv) a company which has capital investment relationships with a foreign investor provide the loan for more than 5 years to the applicable foreign investment company, such a loan (based on the loan term specified in the first loan agreement) shall be constituted as a foreign investment.

4) Foreign investment by contribution on the non-profit corporation (enforced as of ‘07.10.28)

The contribution to the non-profit corporation in the field of science and technology, which is equipped with independent research facilities and correspond to the requirements prescribed by the Presidential Decree

• As Other areas than science and technology, the contribution to a non-profit corporation accepted by the foreign investment committee in accordance with standards prescribed by the Presidential Decree

5) Acquisition of shares due to the merger, etc.

• Where a foreign investor acquires stocks, etc. by transfer to capital from the reserve/ revaluation reserve, etc. of a foreign-invested company

• Where a foreign investor acquires stocks, etc. of a newly incorporated corporation or a surviving corporation after a merger, the all inclusive stock swap or transfer, or a company division with the stocks he/she is holding at the time of the relevant foreign-invested company’s merger, all-inclusive stock swap or transfer with another company, or a company division; Bequest • purchase • Where a foreigner has acquired stocks, etc. of a foreign-capital invested company registered in accordance with the provisions of Article 21 by means of purchase, inheritance, testamentary gift, or gift from a foreign investor;

• Where a foreign investor has acquired stocks, etc. by means of investing the proceeds from the stocks, etc. which were acquired under the laws of Korea; and
• Where a foreigner has acquired stocks, etc. using convertible bonds, exchangeable bonds, stock depositary receipts, and such other similar ones as may be converted into, available for the acceptance of, or exchanged for stocks, etc.