Things You Need to Know About Foreign Investment in South Korea

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Starting a business in South Korea is an excellent choice these days due to the fact that the economy of this country is continuously growing. If you are thinking about doing that then we will show you the most important things you need to know about foreign investment in South Korea.

The strongest points of this country are high-quality infrastructure, advanced R & D capabilities, solid banking sector, shipping, and cargo infrastructure, the considerable growth of investment in Asia, high level of disposable household income, and dominant position in high-end electronics. Furthermore, the highly skilled force is also an excellent advantage that matters a lot when starting a business here.

On the other hand, there are also some weak points that you must take into account, such as the dominance of big industrial groups, unique industry standards, dependence to raw materials imports, aging population, expensive properties, a high cost of manpower, and restrictive regulatory frameworks. Foreign investors often complain about the existence of ‘’informal desks’’.

Investment in this country is governed by the Foreign Investment Promotion Act, and there are some important measures that protect foreign investment which you also need to be aware of. For example, there are guarantees of external remittance, tax relief, and also simplified procedures. However, there are some restrictions as well in education, media sectors, public administration, and energy.

In terms of investment opportunities in South Korea, it would be a fantastic idea to try the following key sectors of the national economy: cosmetics, textile, defense industry, education services, TV & music production, semiconductors, and shipbuilding. The high potential sectors are tourism, the venture industry, aerospace, IT industry, real estate development, chemical, and logistics.

What you must not definitely do is to invest your money in telecommunication services, water and thermal energy, and newspaper publication. The sectors where the opportunities are just a few are nuclear energy, and broadcasting.

There are also some important procedures relative to foreign investment that you must take into account. For example, you are obliged to declare the acquisition of stocks or shares but only if the initial investment is at a minimum KRW 50 million or a foreigner’s investment holds 10% of the total shares. A long-term loan provided by any foreign investor must definitely be declared if the firm owns at least 50% of the total issued shares. There are also other conditions and that’s why you need to do a good research and read about all these aspects before you actually make an investment in this country

Given the fact that the economy from here is constantly growing you have lots of chances to start a business in South Korea that will soon become successful if you follow all the right steps. You need to make sure you choose the right sector and then persevere in order to achieve your goal. The Korean market is without a doubt a very flourishing one and most of all it is extremely opened to new ideas that can improve the economy of this country in the future.



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