1. What role does the government of Korea play in approving and regulating foreign direct investment?
The Korean government takes an active, investor-friendly role in approving and regulating foreign direct investment. A prospective foreign investor seeking to make an investment in Korea is subject to, depending on the type of business, different registrations and/or approvals by the Ministry of Strategy and Finance (MSF), the Financial Supervisory Services (FSS) and the Ministry of Knowledge and Economy (MKE).
The foreign investor is required to file a report of the foreign investment to the MKE pursuant to the Foreign Investment Promotion Act (FIPA). However, in practice, such reporting can be made to one of the foreign exchange banks designated by the MSF or to the Korea Trade Investment Promotion Agency (KOTRA). Such foreign investment reports are normally processed within one day. If the foreign investment amount is less than KRW100 million or 10% shareholding of a company, then reporting requirements under the Foreign Exchange Transactions Act (FETA) will be triggered instead of the reporting requirements under the FIPA.
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