Organising an investment

摘要

The Foreign Investment Promotion Act (FIPA) of 1998 provides the legal basis for foreign direct investment (FDD in South Korea. The law was designed to create a more transparent investment system and expand the range and scope of FDI incentives by abolishing the cumbersome regulations that had characterised its predecessor, the Foreign Investment and Foreign Capital Inducement Act of 1966. Foreign companies are subject to the same laws and regulations that apply to domestic companies, whenever applicable, including the procedures for obtaining permits and licences under different laws. The FIPA considers various types of investment to be FDI. It outlines benefits applicable to foreign investments meeting a minimum of W100m and resulting in the acquisition of at least 10 of voting shares in a domestic company. (The 10 requirement may be waived if an investor provides proof of selecting executives, purchasing raw materials or delivering products for at least one year; the requirement may also be waived for a research-and-development contract.) If there are two or more foreign investors, each investor must meet both conditions. FDI can take the form of cash and capital goods, shares of foreign-listed companies, dividends from shares, proceeds from sales of securities or real property owned by foreign investors, intellectual-property rights and equivalent rights concerning technologies, and long-term loans with terms of five years or more to foreign-invested companies by overseas affiliates.