- Foreign investment under the FIPA means at least KRW 100 million per foreign investor and at least 10% of the voting shares, or equivalent management influence.
- The money arrives from abroad in foreign currency, is notified before or at the remittance, and the company is registered as a foreign-invested company.
- Cash is the usual form, but machinery, intellectual property, retained earnings and long-term parent loans can also count.
- In return the law guarantees the remittance of dividends and invested capital abroad and opens the D-8 investor visa.
- The KRW 100 million is company capital: it can be spent on the business, with a documented trail.
Korea welcomes foreign investment and protects it in law. The Foreign Investment Promotion Act — 외국인투자 촉진법, usually shortened to FIPA — sets out what counts as foreign investment, how it is reported and registered, and what the investor receives in exchange: the right to send dividends and capital home, access to the investor visa, and in some cases incentives. The price of admission is that the investment must meet a definition. Most of that definition fits in one number and one percentage.
This guide takes the definition apart, clause by clause, and then follows the money from your account abroad to the certificate an immigration officer will ask to see.
The definition, clause by clause
Under Article 2(1) of the FIPA, a foreigner (외국인) includes both foreign individuals and foreign-incorporated companies, and foreign investment (외국인투자, oegugin tuja) means, in its core form, a foreigner acquiring shares of a Korean corporation or business in order to take part in its management. Article 2 of the Enforcement Decree then sets the numbers.
| Element | What the law requires | What it means in practice |
|---|---|---|
| Who | A foreign individual or a foreign company | Korean nationals living abroad generally invest as Koreans; dual nationals need checking |
| How much | At least KRW 100 million per foreign investor | Two investors need KRW 100 million each |
| How much control | At least 10% of the voting shares, or equivalent influence | A sole founder clears it automatically |
| Purpose | Participation in management | Portfolio stakes do not count |
| Record | Notification and registration under the FIPA | An unreported investment is just money |
The building blocks of foreign investment under Article 2 of the FIPA and Article 2 of its Enforcement Decree.
KRW 100 million — per investor
The threshold is measured per foreign investor, not per company. If two foreign partners each want foreign investor status — and each wants a D-8 — each must invest at least KRW 100 million, so the company needs at least KRW 200 million from abroad. At recent exchange rates KRW 100 million is roughly USD 70,000–75,000; because the test is in won, a falling won helps and a rising won hurts, so leave a margin when you convert.
10% — or influence
The investor must hold at least 10% of the voting shares. The Enforcement Decree also accepts arrangements below 10% where the investor obtains equivalent influence — for example, by having the right to appoint a director — but for founders the 10% test is the one that matters, and it is cleared automatically by owning the company.
It is not a fee, not a deposit and not, on its own, enough.
Who counts as a foreign investor
The FIPA looks at nationality and place of incorporation. A foreign individual and a company incorporated outside Korea are foreigners. A Korean national is not — even one who has lived abroad for decades — although the Act and its Enforcement Decree make specific provision for Korean nationals permanently resident abroad, who may be treated as foreigners for the purposes of the Act in defined circumstances. Dual nationals and overseas Koreans should check their position before structuring the investment, because it affects both the notification and the visa that follows.
For a foreign company as investor, the company itself is the foreign investor: its documents go into the notification, its account sends the money and its name appears on the share register. The individual it sends to Korea benefits from the investment for visa purposes, but is not personally the investor.
What the bank will ask
A Korean foreign exchange bank processing a foreign investment is doing two jobs at once: recording the investment for the FIPA, and checking the money under anti-money-laundering rules. Expect questions about the source of funds (자금 출처) — where the money came from and how the investor accumulated it — and about the ultimate owners of a corporate investor.
Preparing a short source-of-funds note with supporting documents — salary or dividend statements, sale of a business or property, savings history — avoids a back-and-forth after the money has already left your account. For a corporate investor, an ownership chart up to the individuals at the top does the same job.
What can count as the investment
Cash is the normal route, but the FIPA recognises several objects of investment (출자목적물, chulja mokjeongmul). The main ones are:
- Foreign currency wired from abroad and converted in Korea — by far the most common for founders.
- Capital goods such as machinery and equipment contributed in kind.
- Intellectual property — patents, trademarks and similar rights — contributed in kind.
- Retained earnings of a foreign-invested company that a foreign investor reinvests.
- Shares of another company in certain restructurings.
- Long-term loans of five years or more from a foreign parent or affiliate to its Korean subsidiary, which the FIPA treats as foreign investment.
Contributions in kind need valuation and, under the Commercial Act, procedures to protect creditors and other shareholders. For a founder they are rarely worth the complexity: wire the money, and if you want the company to own your IP, have it buy or license it.
New shares or existing ones
Most founders invest by subscribing for new shares — either at incorporation or in a capital increase under Article 416 of the Commercial Act. The FIPA treats that as the standard case and requires a foreign investment notification (외국인투자신고, oegugin tuja singo) under Article 5 before or at the time of the investment.
A foreigner can also acquire existing shares of a Korean company from its current shareholders. That is equally foreign investment, reported under Article 6, and it is how foreign buyers take over Korean businesses. For a founder setting up from scratch, new shares are simpler.
Following the money
1. Notification
The investor, or the agent on the investor’s behalf, files the foreign investment notification with a foreign exchange bank (외국환은행) or with Invest KOREA (인베스트코리아), the investment promotion arm of KOTRA. It records the investor, the company, the amount and the type of investment. Without it, money arriving in Korea is just money.
2. Remittance
The investment is wired in foreign currency from the investor’s own account outside Korea to the Korean bank, which converts it under the Foreign Exchange Transactions Act and issues a certificate of foreign currency purchase (외화매입증명서). The remitter on that certificate must be the investor named in the notification and, later, on the share register.
3. Paying for the shares
At incorporation, the money is paid for the shares before registration, and the bank certifies payment under Article 318 of the Commercial Act — or, for a company with capital below KRW 1 billion, provides a balance certificate instead. In a capital increase, the new shares are issued and paid in the same way.
4. Registration of the foreign-invested company
Once the investment has been made and the company exists, it is registered as a foreign-invested company (외국인투자기업) under Article 21 of the FIPA and receives a registration certificate (외국인투자기업 등록증명서). This is the document banks, immigration officers and auditors ask for. Any later change — more capital, a share transfer, a change of name — is reported so the registration stays accurate.
What you get in return
The right to take the money home
The core protection is in Article 3 of the FIPA: remittance abroad of dividends, proceeds from the sale of shares and other amounts arising from a registered foreign investment is guaranteed in accordance with the terms of the investment notification. For a founder, that turns ‘can I get my money out?’ from a policy question into a legal right.
The investor visa
Foreign investment status is the gateway to the D-8-1 corporate investor visa. Without the registration certificate, there is no D-8-1. See the complete D-8 checklist.
Equal treatment and incentives
Foreign-invested companies are treated like Korean companies in almost every respect. The broad corporate tax reductions that used to accompany foreign investment were largely abolished from 2019; what remains are targeted incentives — cash grants, site support and reductions in designated zones — for investments in high-technology and strategic sectors that meet specific criteria. For most founders the real benefits are the remittance guarantee and the visa, not tax.
Spending the KRW 100 million
Once the investment is in, it is the company’s capital. It is not frozen and it is not a guarantee deposit. The company can pay rent, salaries, suppliers and marketing with it, like any other money in its account.
Two things follow. Spending must be documented — invoices, payroll, contracts — because immigration and auditors may follow the money at renewal. And taking it back out is not ‘spending’: a loan from the company to its shareholder, or a payment to the shareholder without a business reason, can undermine the investment and the visa that rests on it. Money leaves a Korean company properly as dividends after tax, as salary for real work, or through a formal capital reduction.
Capital that is spent on the business strengthens the file. Capital that quietly goes home destroys it.
Do you actually need it?
Foreign investment status is not compulsory. A foreigner can own a Korean company with KRW 1 million of capital, run it from abroad, take dividends after tax and never touch the FIPA. Whether the status is worth the larger capital and the extra filings depends on three questions.
| Ordinary company, foreign owner | Registered foreign-invested company | |
|---|---|---|
| Minimum capital | None | KRW 100 million per foreign investor |
| Investor visa (D-8-1) | Not available | Available |
| Statutory remittance guarantee | General foreign exchange rules | Guaranteed under FIPA Article 3 |
| Targeted incentives | Not available | Possible in qualifying sectors and zones |
| Extra filings | None | Notification, remittance certificate, registration, change reports |
If the owner will live in Korea, the answer is yes, because the visa depends on it. If the business will hold significant capital in Korea and the owner wants the legal certainty of the remittance guarantee, it is usually yes. If the company is a light trading or consulting vehicle run from abroad with little capital at risk, the ordinary route is often enough — and can be converted later if plans change.
Registration tax on a larger capital
Moving from KRW 1 million to KRW 100 million of capital changes the registration licence tax. Under Article 28 of the Local Tax Act the tax is 0.4% of paid-in capital, tripled to 1.2% inside the Seoul overcrowding control region, plus 20% local education tax. On KRW 100 million, that is about KRW 1.44 million in Seoul and KRW 480,000 elsewhere.
Topping up, converting and exiting
Converting an existing Korean company
A company formed with KRW 1 million can become a foreign-invested company later: the foreign investor subscribes for new shares worth at least KRW 100 million in a capital increase, the investment is notified, the money is wired, the increase is registered with the court within two weeks under Article 317(4) and Article 183 of the Commercial Act, and the company is registered under the FIPA. It works; it simply costs a second round of filings and registration tax.
Adding more
Additional investment is reported in the same way and strengthens the company’s position — useful for visa renewals and for the higher thresholds of permanent residence.
Selling or reducing
If the investor sells shares or the company reduces capital so that the foreign investment no longer meets the definition, the registration must be amended or may be cancelled — with consequences for the visa. Sale proceeds remitted abroad are protected by the guarantee in Article 3, provided the sale is reported.
Tax on the way out
The company pays corporate tax under the Corporate Tax Act — from 2026, 10% on the first KRW 200 million of taxable income, then 20%, 22% and 25%, plus 10% local income tax on the tax. Dividends to a foreign shareholder are subject to 22% withholding including local tax, reduced under the applicable tax treaty if the beneficial-owner forms are filed in time. Our dividend withholding guide lists treaty rates by country.
A worked example
A founder resident in Portugal wants a Seoul software company and a D-8. She decides on KRW 150 million of capital, all hers.
First, the notification is filed with the Korean bank naming her as the foreign investor and the new company as the investee. Then she wires the euro equivalent of KRW 155 million from her Portuguese account — a margin above the capital — to the bank, which converts it and issues the certificate of foreign currency purchase in her name. The KRW 150 million pays for the shares; the bank issues the balance certificate; the company is incorporated at the Seoul registry, paying about KRW 2.16 million of registration licence tax and education tax at the tripled rate. The tax office issues the business registration certificate, and the company is registered as a foreign-invested company. The registration certificate, the bank certificate and the company’s bank statement — all showing her name and the same amount — go into her D-8-1 file.
Over the first year the company spends the capital on an office, two Korean engineers and her own salary, all invoiced and on payroll. At renewal, the trail from her Portuguese account to the company’s payroll is complete.
Keeping the registration accurate
A foreign-invested company is not a one-off filing. The registration under Article 21 is meant to reflect the current state of the investment, so changes are reported: further investment, transfers of shares between foreign and Korean shareholders, a change of the company’s name or head office, and any reduction that takes the investment below the definition. Alongside, the ordinary corporate obligations continue — registry filings within two weeks of a change, annual accounts, tax returns — and the company’s annual figures may be requested for statistical and policy purposes. A tidy registration is what makes the next visa renewal, capital increase or sale straightforward.
Mistakes we see
- Money from someone else’s account. A spouse, a parent or a different company as remitter breaks the link between investor and investment.
- Five transfers from three banks. Each needs its own certificate and all must reconcile; one clean transfer is better.
- Remitting before notifying. The notification comes first or at the time of investment, not afterwards.
- Two investors sharing KRW 100 million. Each needs the full amount.
- Converting at the last moment. A falling exchange rate can leave the investment a few won short.
- Taking the capital back out as an informal loan or payment, which undermines the investment and the visa.
Korean terms you will meet
Questions readers ask
What is the minimum investment for FDI in Korea?
KRW 100 million per foreign investor, with at least 10% of the voting shares, under Article 2 of the FIPA and its Enforcement Decree.
Can two investors share KRW 100 million?
No — each foreign investor needs at least KRW 100 million for foreign investment status.
Can I spend the KRW 100 million?
Yes. It is the company’s capital and can be used for the business, with documented spending.
Can the money come from my company abroad?
Yes, if that company is the investor and shareholder. The remitter and the investor on the register must match.
Is foreign investment open in every sector?
No. Article 4 of the FIPA allows restrictions; a short list of sectors is capped or closed.
Can I take dividends and capital home?
Yes. Article 3 of the FIPA guarantees the remittance abroad of dividends and investment proceeds from a registered foreign investment.
Alexander Baranov
Founder of the BCA Group · cross-border corporate and tax adviser since 2008
Alexander advises foreign founders and groups on company formation, tax structuring and corporate law in more than 40 jurisdictions across Europe, the Gulf, Asia and Latin America. He is the author of nine books on international business and tax and writes regularly for professional finance and tax journals. He works in English, German, Spanish and Russian.
This guide is based on the Korean statutes cited in the text and on our own filings. It is reviewed when the law or official rates change.