FDI Process in Korea: Tips and Insights

For more details, please feel free to reach out at jz@taxjz.com or If you would like a consultation with an English-speaking Consultant/Accountant in Korea, please schedule a call at: Schedule a Call with Jz

Today, I would like to share my experience with the Foreign Direct Investment (FDI) procedure. These days, banks are very rigid in their operations related to foreigners, which seems to be largely due to the Financial Supervisory Service. With the enforcement of anti-money laundering laws and other regulations, it appears that our innocent banks have been shocked into adopting rigid operational procedures reminiscent of those in Japan. Previously, it was not necessary to apply for foreign investment until after the funds had arrived in Korea, but now it is required to do so beforehand. Moreover, corporate establishment can only occur after the funds have arrived. In fact, it is impossible to establish a joint-stock company before the arrival of the capital, whereas a limited company can be established without proof of capital contribution. Currently, even for the establishment of a limited company, it is required that the capital be contributed before the corporation is established. The capital must be deposited in foreign currency from abroad (the investor's resident country), and if there is a slight shortfall in the capital due to exchange rate differences, the minimum capital of 100 million won must be met immediately. If the capital is amply deposited, it is recommended to transfer it to a personal account after the establishment of the corporation. When establishing a foreign-invested corporation for the first time, it is recommended to operate alone without adding directors or auditors other than the investor. As for the office, it is advisable to register a temporary business registration (service/consulting) in a cost-effective shared office space, which allows you to arrive in Korea without haste and take the time to purchase or lease the necessary office space.