♦ Invest KOREA is the official comprehensive national investment promotion agency (IPA) providing one-stop service to foreign investors.

♦ The scope of activities includes not only business consultation, but also tax and customs, business and factory establishment, as well as resolving difficulties with government and mediating in labor disputes. Invest KOREA thus provides comprehensive services and facilitates the smooth settling in of foreign investors in Korea.

♦ Detailed services provided by Invest KOREA:

– Investment consulting and guidance for individual investors, joint ventures, M&A, real estate investment;
– Investment notification, partner search and market research;
– Administrative duties such as the acquisition of approvals and permissions from the central and local governments;
– Supporting the initial settlement of the foreign investor in Korea such as housing, schools and medical insurance, as well as investor aftercare and grievance solution;
– Establishment of new businesses. 

♦ The general concept of ‘civil petitions in bulk’ is that civil petitions are classified into 10 categories according to their characteristics and relevant institutions. When major permissions related to a petition are granted, then other minor permissions are automatically granted under this system.

♦ Types of ‘civil petitions in bulk’

• Concerning approvals for factory establishment, if approval is granted for factory establishment, then it automatically comes with 20 approvals in accordance with 19 individual acts such as the approval for exclusive use of land.
• Concerning approvals for business plans of small and medium businesses, if approval is granted for business plans pursuant to the Support for Small and Medium Enterprise Establishment Act, then it automatically comes with 21 approvals in accordance with 14 individual acts such as the approval for private use of roads.
• Concerning approvals for construction, if permission is granted for construction pursuant to the Building Act, then it automatically comes with 18 approvals in accordance with 20 individual acts such as the approval for changing the character of land.
• Concerning approvals related to the environment, if approval is granted for wastewater discharge facilities, then it automatically comes with seven approvals in accordance with six individual acts, such as for air pollution discharge facilities.
• Concerning approvals for the use of buildings, if approval is granted for the use of the building, then it automatically comes with 13 approvals in accordance with 15 individual acts.
• Concerning the formation of a tourism complex, if approval is granted for a plan to construct a tourism complex, then it automatically comes with 20 approvals in accordance with 19 individual acts.
• If approval of a business plan is granted concerning the installation and utilization of sports facilities, it automatically comes with the nine approvals in accordance with nine individual acts.
• Concerning the formation of a tourism complex, if approval is granted for a plan to construct a tourism complex, then it automatically comes with 20 approvals in accordance with 19 individual acts.
• If approval for a development plan is granted in accordance with the Special Act on Jeju Free International City, then it automatically comes with 27 approvals in accordance with 27 individual acts, such as for the formation of grassland.
• If approval is granted for factory registration in accordance with the Industrial Cluster Development and Factory Establishment Act, then it automatically comes with 21 approvals in accordance with 18 individuals acts.

♦ The approvals for the petitions in bulk are issued directly by Invest KOREA in cooperation with relevant bodies

• Depending on the type of FDI approval or permission to be acquired, processing takes 7-90 days. Automatic approval means that the approval or permission is given automatically after the allotted processing time has passed.
• t is obligatory to issue a certificate of the given permission or approval to the foreign investor. In case the permission or approval is denied it is also obligatory to specify the reason for its denial. 

• The following authorizations are conducted directly by Invest KOREA:

– A seconded officer from the Customs Office will take care of matters related to the import of capital goods. Confirmation about investment in kind will be given instantly.
– A seconded officer from the Ministry of Justice takes care of visas, foreign residence permits and related matters for foreign investors in Korea.
– A seconded officer from the National Tax Service assists with business registrations.

• If foreign capital to be used as investment capital was wired or imported by a third party, then it needs to be confirmed that the money is that of the foreign investor.
• For example, additional information specifying at the time of money transfer that it is investment capital of the foreign investor (name). 

• If foreign capital was imported and exchanged into Korean won without investment notification, it is assumed that the capital is used for other purposes than for investment and thus is not accepted as investment capital.

• If a foreign-invested company wants to conduct FDI in Korea, it has to open an account at a foreign exchange bank after investment notification, and the investment capital has to be deposited into that account. However, if the foreign capital was deposited in an account of a non-resident?s foreign currency account in foreign currency, then the money can be seen as investment capital even if it was received before investment notification.

• Furthermore, it is possible to take the money out of the country in foreign currency when it was deposited in a non-resident’s account by showing the receipt of exchange on departure. However, if the investor has left the country leaving behind deposited money in Korean won, re-enters Korea and wants to exchange the deposited money, then it would not be possible to sell the Korean won and buy foreign currency with it. 

It is necessary to disclose any changes before company registration. 

• FDI through a long-term loan refers to a company issuing a loan with a maturity of at least 5 years to a foreign-invested company from its overseas parent company or a company, which has capital affiliation with the said parent company.
• The foreign investor or the proxy goes to any domestic bank or branch, branch of any foreign bank, Invest KOREA or any KOTRA office in Korea or overseas for notification.
• Documents to be submitted are as follows:

– Application form for FDI through long-term loan;
– Proof that the company is the overseas parent company or a company affiliated with the parent company;
– Copy of loan contract;
– Certificate of nationality of the foreign investor. 

• FDI through the acquisition of existing stocks has to be either notified or permitted, depending on the industry;
• Acquisition of existing stocks of industries other than the defense industry need only to be notified and the procedure is as follows:

– The foreign investor or the proxy (with the power of attorney) goes to any domestic bank or branch, branch of any foreign bank, Invest KOREA or any KOTRA office in Korea or overseas for notification.
– The documents to be submitted are:

• If more than one person is acquiring stocks, documents confirming the specific relationship between each of them;
• Certificate of nationality

– A confirmation about the notification is issued instantly after reviewing the submitted document.
– In case of acquiring stocks of the defense industry, permission is needed from the Minister of MOCIE and the procedure is as follows:
– The foreign investor or its proxy (with the power of attorney) goes to the investment promotion division of MOCIE (Tel. 82-2-2110-5362) and fills out the application.

– The documents to be submitted are:

• Application form (for the permission for FDI through the acquisition of existing stocks);
• If more than one person is acquiring stocks, documents confirming the specific relationship between each of them;
• Certificate of nationality.

– The processing period is about 15 days (in some cases another 15 days extension might be necessary) before the applicant receives notice regarding permission to which (certain conditions may be added.).

• 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.