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Q&A on FDI in Korea

Title 
Q&A on FDI in Korea
Corporate Author 
KOTRA (대한무역투자진흥공사) 투자종합상담실
Issue Date 
2018
Publisher 
KOTRA (대한무역투자진흥공사)
Series/Report No. 
KOTRA자료; 18-063
Table Of Contents 
I. Foreign Investment - Definition & Procedure
Definition
1. Contribution to a non-profit corporation
2. Amendment of the Commercial Act and the minimum foreign investment amount
3. Establishment of a foreign-invested company by a foreign investment association (fund)
4. Investment by a Chinese national permanently residing in Korea
5. Investment through a holding company (paper company)
6. Foreigners’ investment in mutual fund
7. Foreign investment in a project financing vehicle
8. Foreigners’ ownership of depository receipt
9. Recognition as foreign investment when the foreign investment ratio falls short
10. Acquisition of preferred stocks and calculation of foreign investment ratio
11. A non-resident foreign company’s establishment of a domestic branch
12. Recognition of exercise of preemptive rights as foreign investment

Object of Investment
13. Investment of profit from portfolio investment
14. Investment of funds sourced from a Korean bank located overseas
15. Investment with a promissory note or letter of credit
16. Investment-in-kind with used capital goods
17. Scope of capital goods
18. Investment-in-kind with patents
19. Recognition of computer program work as foreign investment
20. Investment-in-kind with domestic real estate
21. Investment-in-kind with loan bonds
22. Conversion of borrowings to capital
23. Debt-equity swap by set-off
24. Stocks to be issued by a foreign listed company

Long-Term Loans
25. Calculation of long-term loan period
26. Where corporate bonds are acquired by a private placement bond
27. Prepayment of long-term loans with a maturity of five years or longer
28. Recognition of loan contract extended to five years or longer as foreign investment
29. Introduction of a long-term loan with maturity of five years or longer from a joint-invested overseas company
30. Transfer of loan receivables to a third person
31. Long-term loans with maturity of five years or longer funded by domestic borrowing

Foreign Investment Procedure
32. Remittance of investment funds
33. Overseas remittance by a third-party person
34. Cost of establishing a stock company
35. Registration of a foreign-invested company
36. Partial registration of a foreign-invested company
37. Administrative procedure for merging a domestic company with a foreign-invested company
38. Foreign investment and notification of business combination
39. Investment-in-kind of a foreign-invested company’s shares

Recovery of Investment Funds and Reinvestment
40. Guarantee of foreign investors’ overseas remittance
41. Foreign investors’ sales of stocks through off-exchange transaction
42. Receipt of proceeds from the sale of stocks in KRW currency
43. Cancellation of registration of foreign-invested company due to stock transfer or capital reduction
44. Recognition of foreign investment after transfer of shares or capital reduction
45. Re-Investment of KRW currency funds received through capital decrease for value
46. Re-Investment of a foreign-invested company’s residual liquidated assets
47. Sourcing a capital increase for value with dividends
48. A foreign-invested company’s re-investment of earned surplus

Businesses Restricted From Foreign Investment
49. Permission of foreigners to operate a housing site development and supply business
50. Operation of a massage business
51. Foreigners’ operation of a foreign patient attraction business
52. Foreigners’ investment in an educational institute for the purpose of making profit
53. Permission of foreign investment in the automotive financing business
54. A Foreign-invested company’s acquisition of stocks of a meat wholesale company
55. Foreign investment in cryptocurrency transaction business

II. Incentives for Foreign Investment
General
56. Foreign-invested companies’ short-term foreign borrowings
57. Upper limit on foreign-invested companies’ payment of dividends with stocks
58. Incentives for establishing a foreign school
59. Tax incentives for small and medium-sized start-ups
60. Round-trip investment by a foreigner
61. Tax incentives for Korean companies that withdraw from overseas markets and relocate to Korea (i.e. “U-turn companies”)
62. Tax incentives for foreign engineers
63. Application for tax reduction for businesses accompanying new growth driver industry technology
64. Tax reduction & exemption for original technology and new growth driver industry technology
65. Documents to be submitted when applying for tax reduction or exemption as a stand-alone foreign investment zone
66. Reduction or exemption of registration and license tax for registering capital increase
67. Initial date in reckoning the period of tax reduction or exemption for capital increase
68. Initial date in reckoning the period of tax reduction and exemption where interest income is accrued before business commencement
69. Effectiveness of decision to grant tax reduction when the foreign investor is changed
70. Tax reduction or exemption when business is partially transferred to a domestic company
71. Period for which customs duties for capital goods are exempted Foreign Investment Zones
72. Installment of new business facilities to qualify for designation as a foreign investment zone
73. Requirements for a domestic company to move into a foreign investment zone
74. Businesses eligible to move into a complex-type foreign investment zone
75. Upper limit on the size of land that can be leased in complex-type foreign investment zones
76. Change of publicly notified matters regarding a foreign investment zone
77. Designation of two or more foreign-invested companies as a foreign investment zone
78. Expenses for purchasing land in an industrial complex for designation as a complex-type foreign investment zone
79. Designation as a complex-type foreign investment zone and explicit demand for move-in
80. A complex-type foreign investment zone tenant company’s tenancy agreement period

Free Economic Zones
81. Service businesses eligible for tax reduction/exemption in a free economic zone
82. Seven-year tax reduction/exemption for tenant companies within a free economic zone
83. Conditions for opening a foreign-only casino in a free economic zone
84. Establishment of a foreign educational facility within a free economic zone
85. Establishment of a medical institution within a free economic zone
86. Establishment of a foreign medical institution in Jeju Special Self-Governing Province

III. Management of a Foreign-Invested Company
Labor
87. Social insurance
88. Statutory working hours
89. Extended work wages
90. Minimum wage
91. Retirement allowance
92. Statutory holidays
93. Annual leave with pay
94. Rules of employment
95. Labor-management council
96. Fixed-term workers
97. Dispatched workers
98. Substitute holidays
99. Maternity leave
100. Probationary period
101. Compensatory leave system
102. Foreign-invested companies’ obligation to hire Korean employees
103. Business owners’ obligation to conduct health examinations for employees
104. Causes for requesting interim settlement of retirement pay
105. Measures to urge workers to take annual paid leave
106. Retirement age

Acquisition of Real Estate
107. Points to Check When Acquiring Land in Korea
108. Foreigners’ real estate acquisition procedure
109. Foreigners’ notification of real estate acquisition and ownership
110. Real estate acquisition by a domestic branch of a foreign company
111. Real estate acquisition by a company where no less than half of its executives are foreign nationals
112. Real estate acquisition by a domestic corporation where no less than 50 percent of its shares is held by foreigners
113. Foreigner’s land division

Taxation & Accounting
114. External audit requirements
115. Taxation for a private business vs. corporation
116. Payment of value added tax for entrepreneurs with two or more business places
117. Value-added tax refund
118. Value-added tax for imported goods
119. Tax on import of liquor
120. Insufficient capital tax system

IV. Settlement
121. Alien registration
122. Change in status of sojourn
123. Extension of period of sojourn
124. Calculation of period of sojourn and date of application for sojourn
125. Foreigners’ obligation to enroll in National Health Insurance
126. Foreigners’ registration of seal imprint
127. Driver’s license
128. Changes in alien registration matters that require notification
129. Notification of change of place of sojourn
130. Child and infant welfare
131. Medical care subsidies for pregnancy and childbirth
132. Returning the alien registration card
133. Lost or stolen cellphone
134. Emergency medical call
135. Issuance of a Korean credit card
136. Korean language class
137. Foreigner’s subscription to mobile phone service
138. Foreign investors’ application for permanent residence
139. Confirmation of foreign public documents when filing for registration of incorporation of foreign-invested company
140. Immigration priority service for foreign investors
141. Sojourn status for dispatched employees for foreign-invested companies

V. Appendix
Basic Information on Investing in Korea
ISBN 
9791160978292
Citation 
K II/B-111/II-fe WHA(E) 18, 216 p. ;
URI 
http://125.131.31.47/Solars7DMME/004/18QnA_on_FDI_in_Korea.pdf
Language 
eng
Subject 
외국인투자 - 한국
투자환경 - 한국
외국인직접투자 (FDI) - 한국
외국인투자제도 - 한국
외국인직접투자제도 - 한국
투자절차 - 한국
외국인생활 - 한국
Appears in Collections
01. KOTRA자료 > 2018

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