Korea, where he practices in the areas of corporate law, mergers
and acquisitions, corporate finance, foreign investment and
international arbitration. He is selected as one of the best lawyers
in Korea by the Legal 500 in Asia in mergers and acquisitions and
international arbitration.
19th Floor, City Air Tower
159-9, Samsung-dong, Kangnam-ku
Seoul, 135-973, Korea
+82 2 6004 2500 Phone
+82 2 6203 2500 Fax
yjbaek@hanollaw.com
www.hanollaw.com
("FDI") refers to the investment made
by a foreigner with the goal of establish-
ing continuous economic relations with
and participating in the management of
a Korean corporation or a company run
by a national of the Republic of Korea.
FDI differs from ordinary investment,
in that it is designed to exercise sub-
stantial influence over management of a
company. FDI also means an investment
made to create wealth via the transfer of
tangible or intangible assets, such as in-
tellectual property rights and real estate;
and where a foreigner purchases stocks
or shares of a domestic company for the
purpose of participating in the manage-
ment. FDI is regulated by the Foreign
Investment Promotion Act.
stocks of a Korean corporation or a com-
pany run by a national of the Republic of
Korea, (ii) supply of a long-term loan to a
tribution to a non-profit corporation, etc.
1. acquisition of Shares or Stocks of a
domestic company refers to a case in
which a foreigner purchases shares or
stocks of a Korean corporation (including
a Korean corporation in the process of
being established) or a company run by a
national of the Republic of Korea, for the
purpose of establishing a continuous eco-
nomic relationship with and participating
in the management of the said Korean
corporation or company.
Under the Foreign Investment Promo-
tion Act, FDI should meet the following
conditions:
100 million won or more.
more of either the total number of vot-
ing stocks, or the total equity invest-
ment. (Foreign Investment Promotion
Act 2-2)
is two or more, each should meet the
above conditions. The foreign investment
completed (Foreign Investment Promo-
tion Act 2-3). However, when a foreign
investor of a registered foreign-invested
company makes an additional invest-
ment, there is no limitation in the amount
and ratio. The investment, stated in the
foregoing sentence, should include the
possession of shares by a foreign inves-
tor, following the capitalization of legal
reserves by a foreign-invested company
(Article 2 (3) of the Enforcement Decree
of the Foreign Investment Promotion Act,
taken into effect on October 6, 2010).
Although there are no exceptions in
regard to the investment amount, excep-
tions may be allowed for the foreign
investment ratio. Even if the foreign
investment ratio is less than 10 percent
with the amount of the foreign invest-
ment being 100 million won or more, the
investment may be exceptionally quali-
fied as FDI in one of the following cases.
officers;
of raw materials or products for the
period of one year or more; and
ing technology, or for joint research
and development