Investment Guide

This investment guides are about investment method and process for any foreign individual, corporation or foundation to run a business without restriction in a FEZ.

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Eligibility to Invest in FEZ

“Foreigners” – any foreign individual, corporation or foundation designated as a project developer by the relevant free economic zone authority – may run a business without restriction in a free economic zone. The term “foreigners” refers to any individual with foreign citizenship, corporation established under foreign laws, international economic cooperative institution, or Korean nationals permanently residing abroad.

Investment Method

Foreign investment may take one of the various methods under the Foreign Investment Promotion Act and the Act on Designation and Management of Free Economic Zones, including direct investment to construct a factory, implementation of project development works, investment in equity capital, or import of capital goods.

Acquisition of shares or equity holding of a local company
  • Investment amount is at least 100 million won (per person when 2 or more foreigners are involved)
  • A foreigner owns at least 10% of either the total number of voting stocks or its total equity investment
  • A foreigner owns less than 10% of either the total number of voting stocks or its total equity investment but enters into any of the following contracts
    • Any contract for seconding or electing officers
    • Any contract for supplying or purchasing raw materials or products for at least one year
    • ny contract for providing or introducing technology or for joint research
Long-term Loans of 5 or more years
  • Overseas parent company of the foreign-invested firm
  • A company that has any of the following capital investment relationship with the overseas parent company of the foreign-invested firm
    • The company owns at least 50% of the total number of issued stocks or the total equity investment of the overseas parent company
    • The company applies to one of the following while the overseas parent company owns at least 50% of the total number of issued stocks or the total equity investment of the foreign-invested firm
      • The company holds at least 10% of the total number of issued stocks or the total equity investment of the overseas parent company
      • At least 50% of the total number of issued stocks or the total equity investment of the company is held by overseas parent company or by a company that owns at least 50% of the total number of issued stocks or the total equity investment of the overseas parent company
  • A foreign investor
  • A company at least 50% of the total number of issued stocks or the total equity investment of which is held by a foreign investor who holds at least 50% of the total number of issued stocks or the total equity investment of a foreign-capital invested company
Contribution to a Non-profit Corporation
  • Any Korean corporation (including corporations still in the process of establishment) in the field of science and technology, which has an independent, non-profit research and development facility and meets the following requirements
    • Employing at least 5 full-time researchers with a bachelor’s degree in science and technology and at least 3 years’ research career, or a master’s degree in science and technology
    • Engaging in research and development activities for a project requiring high technology referred to in Article 116-2(1) of the Enforcement Decree of the Restriction of Special Taxation Act
  • Any other contribution to a non-profit corporation, which the Foreign Investment Committee pursuant to Article 27 recognizes as a foreign investment in accordance with the standards on the business detail of the non-profit corporation as prescribed by the Presidential Decree
    • Standards prescribed by the Presidential Decree: amount of contribution is at least 50 million won and applies to one of the following
      • A non-profit corporation established with the purposes of promotion of science, art, medical services, or education, and continuously performs projects for developing experts in the relevant fields and projects to expand international exchanges
      • A local headquarters of an international organization performing international cooperation projects between civilians or governments

Investment Procedures

  • STEP01

    Report Foreign Investment
    to the Invest Korea agency of KOTRA

  • STEP02

    Remit investment fund
    to a foreign exchange bank, or hand-carry through customs clearance

  • STEP03

    Register the incorporation of the company
    with a court registry

  • STEP04

    Report incorporation and apply for business registration
    to a tax office in the region

  • STEP05

    Transfer equlity fund to the company account
    by the foreign exchange bank

  • STEP06

    Register the company as a foreign-invested firm
    with the agency of the first report

Foreign Investment Declaration

Preliminary Declaration
  • Declare the foreign investment by the acquisition of new stock or investment methods or declare the change of the investment contents
  • Declare the foreign investment by the acquisition of existing stock or investment methods or declare the change of the investment contents (Exception: In case of acquiring the stocks of the listed company, within 30 days after acquisition)
  • Declare the foreign investment in the form of long-term load or declare the change of the investment contents
Declare the acquisition of stock, etc, by the merger, etc.
  • Declare the acquisition of stock, etc, by the merger, etc.
    • Acquire by the capital increase without consideration of foreign investment company such as reserve fund, revaluation reserve, etc.
    • Acquire by merger, split off, inclusive share exchange or transfer, etc.
    • Invest the fruit (dividend) generated from acquired stocks
    • Acquire by purchase, inheritance, bequest, gift, etc.
    • Acquire CB, EB, or transfer, exchange, receive or acquired DR(Within 30 days from the date of acquisition)
  • Transfer declaration of the stock, etc. (Within 30 days from the date of contract)
  • Declare the reduction of stocks, etc. (Within 30 days from expiry date of the period of peremptory notice)
  • Register, register the changes, apply the cancelation of the register (Within 30 days from the date occurred the cause)
  • Declarant
    Declare by the foreign investor personally or by representative
  • Institution to be declared
    Institution to be declared: Head office or branch of domestic bank, domestic branch of foreign bank, Invest Korea (KOTRA) or domestic office of KOTRA, overseas investment KOTRA office.
  • Processing Period
    Immediate (Issue declaration certificate) preliminary or post declaration