Investment Guide
The second installment in a seven-part series
A 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
3. Corporation Establishment
4. FDI Incentive
5. FDI Related Law
1. FDI System in Korea
1-2 Foreign Investment Promotion Act (FIPA)
The Foreign Investment Promotion Act (FIPA) has been enacted to facilitate foreign investment through support and provision of convenience for foreign investment. The Foreign Investment Promotion Act (FIPA) is the basic law for foreign investment, and its subordinate acts include the Foreign Investment Promotion Act (FIPA) Enforcement Promotion Act (FIPA) and Enforcement Regulations stipulating matters delegated by the Foreign Investment Promotion Act (FIPA) and matters required for enforcement, and regulations on foreign investment and technology import.
Also, unless stated otherwise in the Foreign Investment Promotion Act (FIPA), the Foreign Exchange Trade Act will apply to matters related to foreign exchange and external dealings related to foreign investments. The Tax Exemptions and Exceptions Act and its Enforcement Promotion Act (FIPA) and Enforcement Regulation, and regulations on tax reductions on foreign investments etc. will apply to tax reductions for foreign investments.
However, since foreign-invested companies are local corporations established under domestic law, the same laws that apply to purely domestic corporations will apply even if the foreign-invested company has gone through the processes as prescribed in the Foreign Investment Promotion Act (FIPA). Therefore, if approval and permission under each law are required, the relevant business may be conducted only after the required processes are completed.
Foreign Investment-Related Laws
>> Basic Laws
Foreign Investment Promotion Act (FIPA) / Enforcement Promotion Act (FIPA)s / Enforcement Regulations
Regulations on foreign investment and technology import (Ministry of Knowledge Economy)
Comprehensive announcement of foreign investment (Ministry of Knowledge Economy)
Regulations on tax reduction and exemption for foreign investment (Ministry of Strategy and Finance)
Tax Exemptions and Exceptions Act (Chapter 5. Tax Exemptions for Foreign Investments etc.)·Enforcement Ordinances·Enforcement Regulations
>> Other Related Laws
Foreign Exchange Trade Act: with regard to foreign exchange and external trading related to foreign investments
Law on designation and operation of free trade zones
Law on designation and operation of free economic zones
Financial Investment Services and Capital Markets Act etc.
*Courtesy of Invest Korea, an affiliate of Korea Trade-Investment Promotion Agency
