English I

Inward Foreign Direct Investment in Korea


 The foundation of inward foreign direct investment (FDI) in Korea was established early in the 1980s. It has become effective after various governmental stimulation policies were introduced in the late 1990s. The Korean Congress passed the Foreign Investment Promotion Act in 1998 that improved upon the former Foreign Investment and Foreign Capital Inducement Act. According to the new act, the inward foreign direct investment system became more favorable to investors, and the Korean government was then able to provide multiple incentives to foreign investors. Furthermore, the revision of the Foreign Investment Promotion Act in 2010 allowed local governments in Korea to invite foreign direct investments. As a result, the inward FDI has increased dramatically from 0.8 billion USD (based on investment report amounts) in 1990 to 14.55 billion USD in 2013. The number of countries investing in Korea has increased from 26 countries in 1990 to 78 countries in 2013. According to Ministry of Trade, Industry, and Energy the ranking of Korea on the “doing business” index developed by World Bank improved from the 23rd in 2008 to the 8th in 2012, and the ranking of the trust index of FDI developed by AT Kearney was also improved from the 24th in 2007 to the 19th in 2011.