Bilans d’évènement • Secteurs & marchés • Evènements • Evènement VIP • Networking • Rencontre & Echange Finance - Assurance - Banque
FKCCI discusses FDI policy and regulations in the Roundtable Meeting with the Ministry of Trade, Industry and Energy (MOTIE)
On February 23rd, FKCCI participated in the Roundtable Meeting with the Korean Minister for Trade of MOTIE, Mr. Dukgeun Ahn, the Foreign Investment Ombudsman, Dr. Kim Sung Jin, and other official representatives of Korean governmental agencies, along with other foreign Chambers of Commerce and foreign invested companies in Korea.
The meeting aimed to facilitate communication between Korean authorities and the foreign business communities to enhance cooperation in economy and investment. It was the occasion to discuss Korea’s foreign direct investment policy for 2023, regulations and grievance resolution, as well as to share policy suggestions for the future.
Represented by its chairman, David-Pierre Jalicon, it was the opportunity for FKCCI to advocate for the interest of the French business community in Korea and engage in a meaningful dialogue.
FDI Policy
Although global FDI conditions are taking a toll due to worldwide worsening economic conditions, South Korea is attracting more and more foreign investment as it is offering favorable conditions: a strong manufacturing base, highly skilled workforce, advanced technology (6th in global innovation index), an extensive trade network including FTAs with 59 countries, high national credit rating, and policy efforts.
As a result, FDIs hit a record high in 2022 at 30.5 billion USD, compared with 29.5 bn USD in 2021, and 20.8 bn in 2020. Sector-wise FDIs in manufacturing recorded a whooping performance of 12.5 bn in 2022 (+149.4% YoY).
In 2023, the Ministry of Trade, Industry and Energy (MOTIE) ensured that it will strengthen support for high-tech industries, pursue a business-friendly investment environment and target strategic sectors through cash grant programs, tax benefits, support to FDI zones, and support to companies’ HR and R&D.
Trade Minister Ahn emphasized that “full measure will be given to improving the support system and investment environment so as to assist not just the domestic management affairs of foreign-invested companies but also to stimulate foreign investment that contributes to Korea’s economic growth.”
FIND MORE INFORMATION ON KOREA’S FDI POLICY
Regulations
As foreign investors still face several regulatory challenges, the office of the Foreign Investment Ombudsman presented several cases for regulation improvements.
Those include mitigating issues such as predictability in cash grand program, overlapping permission for importing prohibited substances, burden from administrative procedures for R&D chemicals, process for plug-in hybrid vehicles and EVs, or else domestic automobile safety standards.
Investor Visas
Among the highlights, FKCCI was informed on regulation improvement for corporate investor D-8 visa.
The validity period of D-8 visas is usually 1 year in consideration of investment amount, business performance, tax payment record, etc. In response, in 2023, the authorities extended the valid period of stay from 1 year to 2 years for venture start-ups D-8-4, with some exceptions in case of poor business performance.
Tax Exemption
Korea amended its Income Tax Act on December 23, 2022, to expand the special application period for the flat tax rate (19%) for foreign workers, from 5 years to 20 years from the start date of work in Korea. It is expected that it will have a significant economic impact, particularly on foreign executives dispatched by the parent company.
FIND MORE INFORMATION ON REGULATION IMPROVEMENT
The FKCCI will remain active in helping market access issues for its members and French companies and has regularly meeting with Korean officials. Should you have any inquiry, please contact membership(@)fkcci.com
Please see the official press release distributed by the MOTIE
