Protection of Foreign Investment

Protection of Foreign Investment

Foreign direct investment is protected stronger than indirect investment such as investment in securities and bonds, as prescribed by the Foreign Investment Promotion Act.

 

(1) Guarantee of Remittance to Foreign Countries

With regard to the proceeds from stocks, etc. acquired by a foreign investor, proceeds from the sale of stocks, etc., the principal, interest and service charges paid in accordance with the loan contract as prescribed by the Foreign Investment Promotion Act, and the compensation paid in accordance with a license agreement, their remittance to foreign countries shall be guaranteed in accordance with the details of the permission or report under the foreign investment contract or the license agreement at the time when the said remittance is made.

(2) Exceptions to the Safeguard Clause on Foreign Exchange Transactions

The Minister of Strategy and Finance may temporarily suspend or restrict foreign exchange transactions, if such measures are deemed inevitable on account of the outbreak of a natural calamity, war, conflicts of arms, grave and sudden changes in domestic and foreign economic conditions, or other situations equivalent thereto (Article 6 (1) to (3) of the Foreign Exchange Transactions Act). However, such measures shall not apply to foreign investment as provided for in the Foreign Investment Promotion Act (Article 6 (4) of the Foreign Exchange Transactions Act).

(3) National Treatment

Except as otherwise prescribed by the Acts of the Republic of Korea, foreign investors and foreign-invested companies shall be treated in the same way as the nationals of the Republic of Korea and Korean corporations in respect of their business operations.

(4) Equal Application of Tax Abatement Regulations, etc.

Except as otherwise prescribed by the Acts of the Republic of Korea, the provisions concerning the abatement or exemption of taxes from the tax laws applied to the nationals of the Republic of Korea or Korean corporations shall also apply to foreign investors, foreign-invested corporations, persons who have extended loans as prescribed by the Foreign Investment Promotion Act, and persons who have provided technology thereto.