Acquisition of the Stocks or Shares of a Domestic Company

  • Foreign Investment amount of KRW 100 million or more.
  • Holding of 10% or more of voting stock issues by a company that is managed by a corporation of the Republic of Korea (including a corporation under incorporation) or a Korean national.

Long-Term Loans

Loans with a maturity of not less than five years (based on the load maturity prescribed in the initial loan contract) supplied to a foreign-invested company by the following entities:

  • An overseas parent company (OPC) of the foreign-invested company (corporation)
  • A company that has capital investment relations with
    • A foreign investor (individual)
    • A company that has capital investment relations with a foreign investor (individual)

※ Calculation of loan period: The sum of 'the partial repayment or early repayment amount multiplied with the percentage of the repayment in relation to the total loan amount'

Contribution to a non-profit organization ("NPO"), etc.

A contribution to an NPO or a company is recognized as FDI where the foreign contribution amount is at least KRW 50 million and accounts for 10 percent or more of the total amount and where all of the following conditions are met.

※ Related laws: Article 2 (1) 4 of the Foreign Investment Promotion Act, Articles 2 (2) and (4)-(7) of the Enforcement Decree of the Act

The NPO or company has independent research facilities in the fields of science and technology, and meets any one of the following conditions:

  • There are at least five regular workers with a bachelor's degree in a science or technology field and at least three years’ experience in research, or with a master's or higher degree in a science and technology field
  • The NPO conducts R&D activities in the fields of natural science and engineering as classified under the Korean Standard Industrial Classification (KSIC)

Other contributions to an NPO by a foreigner that meet one of the following conditions, and which are recognized as foreign direct investment by the Foreign Investment Committee:

  • An NPO established for the purpose of promotion, etc. of science, art, medical services, or education, and which continues to conduct its business with a view to developing professionals in the relevant fields and to expanding international exchanges
  • An NPO that is a regional office of an international organization that engages in international cooperation business between civilians or governments

Reinvestment of Unappropriated Earned Surplus

Investment of a foreign-invested company's unappropriated earned surplus for certain purposes such as the construction of the expansion of a factory (in this case, the foreign-invested company shall be considered a foreigner and the foreign investment amount shall be calculated by multiplying the amount spent and the foreign investment ratio.)

Foreign direct investment by the method of using the retained earnings enforced on August 5, 2020

  • A foreign invested company applies (uses) its retained earnings to the construction of a new factory or extension of its factory or to any of the purposes stipulated in the Presidential Decree
    • In such case, the foreign-invested business is considered to be a foreigner, and the foreign-invested amount will be the amount obtained by multiplying the amount applied/used for such purpose by the ratio of equity investment by the foreigner(s).
  • Applications
    • Construction or extension of factory or research facility (manufacturing business): When the foreign investor purchases land or building to put up a production/ research facility, pays rent or building construction expenses, provides funds for installing infrastructure facilities including power and communication facilities for building a new production/research facility, or intends to purchase capital goods or research equipment and materials
    • Construction or extension of factory or research facility (Non-manufacturing business): When the foreign investor purchases land or building to put up a production/ research facility, pays rent or building construction expenses, provides funds for installing infrastructure facilities including power and communication facilities for building a new production/research facility, or intends to purchase capital goods or research equipment and materials

Any object in which a foreign investor invests in order to possess stocks, etc., should fall under any one of the following conditions

  • A means of international payment (foreign currency) as defined under Article 3.1 of the Foreign Exchange Transactions Act or a means of domestic payment (national currency) incurred by international payment;
  • Capital goods;
  • Proceeds (dividends) from stocks, etc., acquired under the Foreign Investment Promotion Act;
  • Industrial property rights, intellectual property rights (including copyrights to be utilized for industrial activities under the Copyright Act, and the layout-design rights prescribed by the Act on the Layout-Designs of Semiconductor Integrated Circuits), and other technologies and rights pertaining to the use of such technologies;
  • Residual property to be distributed to a foreigner upon liquidation of a domestic branch or liaison office of a foreign corporation or a foreign-invested company;
  • The amount of redemption of long-term loans or other loans from a foreign country;
  • Stocks of a foreign corporation listed on foreign stock markets;
  • Stocks owned by a foreigner under the Foreign Investment Promotion Act or the Foreign Exchange Transaction Act;
  • Domestic real estate owned by a foreigner (a certificate of completion of capital transaction report in accordance with Article 18 of the Foreign Exchange Transactions Act must be attached); or
  • Proceeds from the sales of stocks, etc., of a domestic company or Korean real estate owned by a foreigner.

※ Related law: Article 2.1.8 of the Foreign Investment Promotion Act