Oversight of Foreign Financial investment in South Korea
4 min readIn a wide feeling, what policies does the South Korean government use to oversee international investment decision?
In a broad sense, Korea is really a overseas investment decision-pleasant state. Nonetheless, we would say the Korean government methods foreign investments coming into Korea and overseas investments going exterior of Korea in a different way. Typically talking, foreign investments coming into Korea are freely permitted, as lengthy as they are correctly documented. On the other hand, international investments bounding exterior of Korea are additional controlled and generally involve prior approval from the Korean regulators these kinds of as the Lender of Korea.
How has the 2017 Foreign Expenditure Marketing Act (FIPA) altered the regulation of foreign investment in the region?
The Foreign Investment decision Advertising Act (“FIPA”) was 1st enacted in 1998. Considering that the enactment of the FIPA, the Korean government has carried out policies to provide many incentives to overseas investors in get to bring in far more international investments into Korea. These incentives consist of tax incentives, subsidies, and international trader visas.
In the past, the Korean government’s fascination was the quantity of investment designed by the foreign buyers. Even so, in my look at, much more lately, the Korean government’s fascination has shifted to the high-quality of the investment by attracting overseas investments in higher benefit-additional industries.
Are there other substantial legislation governing how foreign investment is managed?
FIPA applies only to sure international investments. The primary form of international investments initial coming into Korea is equity expense (e.g. company development). FIPA applies to a foreign investment decision whereby the foreign trader purchases shares of a Korean business in the sum of at the very least KRW 100 million (about USD 88,370) and the foreign investor will possess at minimum 10% of shares in the Korean firm as a final result of the expense. In other phrases, if the overseas investor’s financial investment is considerably less than KRW 100 million, we will have to search if any other regulation or polices use. For instance, in these a circumstance, the Overseas Trade Transactions Act (as effectively as regulations promulgated thereunder) could apply.
In my watch, much more just lately, the Korean government’s interest has shifted to the top quality of the expenditure by attracting overseas investments in large benefit-extra industries.
What regulatory problems are typically encountered by foreign men and women or organisations attempting to make investments in South Korea?
As we stated higher than, as prolonged as the overseas investor will make the appropriate report for the foreign expenditure into Korea and is substantiated with the supporting files, then the foreign investor should be in superior form.
Producing the appropriate report is fairly crucial because it could hold off and complicate the course of action when the foreign investor attempts to later on repatriate its investment back again to its property condition.
How would you advise that international investors avoid or defeat these hurdles?
We would say the foreign buyers talk to with a attorney or an skilled beforehand so that any needed report is effectively organized and produced.
About Rieu Kim and Hyuk Jun Jung
Rieu Kim: I have been with Barun Law because 2010 and prior to that I labored as an lawyer at a boutique company regulation organization in California and at a significant Korean electronics enterprise.
Hyuk Jun Jung: I have been with Barun Legislation given that 2014 and just before that I labored as a Choose Advocate with the Korean Army.
Rieu Kim: With each other, we have intensive encounter advising Korean and international businesses in relation to equally contentious and non-contentious issues in Korea and exterior of Korea. Extra especially, we often recommend customers in relation to their corporate functions in and exterior of Korea, these as international investments, corporate development, company reorganisations, contract assessments, M&A, joint ventures and work.
Hyuk Jun Jung: We also represent clients in arbitration conditions ahead of the arbitral bodies, this kind of as KCAB, the ICC and the HKIAC. I also stand for shoppers in sophisticated civil and commercial domestic litigation conditions in advance of the Korean courts. Our well balanced encounter in both of those advisory and contentious matters allow us to comprehensively have an understanding of the legal issues the customers are at the moment going through and might facial area, thereby enabling me to far better aid them and to make far more values to them.
Rieu Kim, Senior International Lawyer (Spouse)
Hyung Jun Jung, Partner
Barun Law LLC
Address: Barun Regulation Making, 92 Gil 7 Teheran-Ro Gangnam-Gu, Seoul 135-846
Tel: +82 2 3476 5599
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Web page: barunlaw.com
Barun Legislation was founded in 1998 and quickly took its position amid Korea’s top entire-support law corporations. It is now comprised of above 220 lawyers who, with each other with extremely qualified guidance personnel, provide a whole assortment of authorized products and services.
