Investment Guide

The fourth installment in a seven-part series

Series Schedule

1. FDI System in Korea

1-1 Foreign Direct Investment

1-2 Foreign Investment Promotion Act

1-3 Foreign Investment Promotion and Control

2. FDI Procedures

2-1 Foreign Investment Procedures

2-2 Foreign Investment Report

2-3 Post Management of Foreign Investment

2-4 Forms

3. Corporation Establishment

4. FDI Incentive

5. FDI Related Law

1. FDI Procedures

2-1 Foreign Investment Procedures

The procedures to establish foreign investment consist of foreign investment notification, remittance of the investment capital, registration of incorporation & business registration, and FDI company registration. The procedures applied to foreigners are basically the same as for Koreans except for the two additional steps which are foreign investment notification and FDI company registration. However, in the case of registration as a private business, the step of registration of incorporation is not required.

2-2 Foreign Investment Report

2-2-1 Foreign Investment Report

Foreign investors or their agents can notify their investment at Invest KOREA (KOTRA) or Korea Business Centers (KBC) of KOTRA, headquarters and branches of domestic foreign exchange banks, or domestic branches of designated foreign banks.

Notifying person: The very foreign investor or an agent
Notification receiver: Headquarters and branches of domestic banks, domestic branches of designated

foreign banks, and Invest KOREA(KOTRA) or KOTRA's Korea Business Centers.
Notification processing period: Immediately (the issue of notification certificates)

Since November 1998, the principle of simplified notification policy has been applied to foreign investments. The investment notification types are divided into pre-notification prior to the acquisition of shares, equity, etc. and post-notification following the acquisition of shares or the conclusion of a contract. The details are as follows:

Pre and Post Notifications

Category	Notified Items	Remarks
Pre-notification	Foreign investment through acquisition of new shares etc. or subscription and changes in investment details
	Foreign investment through acquisition of existing shares etc. or changes in investment details	Exceptionally, within 30 days from the date of acquisition in the case of acquisition of shares of a listed corporation
	Foreign investment through long-term loan or changes in investment details	Exceptionally, within 30 days from the date of acquisition in the case of pre-notification
Post-Notification	Acquisition of shares etc. through mergers etc. · Acquisition via the issue of new shares such as reserves, revaluation reserves etc. of foreign-invested companies. · Acquisition through mergers, spin-off, and comprehensive interchange and transfer of shares etc. · Investment with profits (dividends) from acquired shares · Acquisition through purchase · inheritance · testation · donation · Acquisition through conversion, interchange and acquisition of CBs, EBs and DRs	Within 30 days from the date of acquisition
	Transfer of shares etc.	Within 30 days from the date of contract
	Decrease in shares etc.	According to Article 439 of the Commercial Law : within 30 days from the date of termination of the creditor's notification period
	Application for registration, change of registration, or registration cancellation of a foreign-invested company	Within 30 days from of occurrence of the case

Required Documentation

· Two copies of the foreign investment notification form per investment type
(new shares, existing shares, long-term loans etc.)
· Proof of foreign nationality

- For corporations or organizations: copy of register issued by the government of the country or other
authorized institutions, or other documents proving the said corporation or organization's existence in the
country of origin;
- For foreign individuals: National ID card, passport, or other documentation proving his or her nationality,
issued by the government of the country of origin, or other authorized institutions;
- In the case the foreign investor holds citizenship of the Republic of Korea, the above documents can be
replaced by a certificate of citizenship issued by the Korean Government or other authorized institution,
or overseas citizen registration certificates etc. issued by overseas legations of the Republic of Korea;

Additional documents to be attached when necessary:

· Documentary evidence of investment objects;
· Other documentary evidence related to share acquisition;
· Letter of attorney (when the agent of a foreign investors notifies the investment and applies for permits by
way of the investor's conferment of an agency).

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