Amendment to Foreign Investment Promotion Act

The government of Korea amended the Foreign Investment Promotion Act. Under the current Act on Monopoly Regulation and Fair Trade, a subsidiary of a holding company could not - up to now - make a joint investment with a foreigner. The amendment allows subsidiaries to establish a joint venture with a foreigner under certain conditions:

• The subsidiary holds 50 percent or more of the total stocks issued by the joint stock corporation;
• The foreigner holds 30 percent or more of the total stocks;
• The investment falls into the category of “separate” foreign investment, etc. The revised act was promulgated on 10 January 2014 and will be effective as of 11 March 2014.

• Type:

  • Entry and establishment (Ownership and control)

• Industry:

  • Not industry specific

• Sources:

  • Korea Trade-Investment Promotion Agency, Revised FIPA to be effective March 11, http://www.investkorea.org/ikwork/iko/eng/cont/contents.jsp?code=102060101&no=608300001&url_info=bbs_read.jsp&bno=401130008&sort_num=1387&l_unit=90202&m_unit=&s_unit=, 13 Jan 2014
  • National Assembly of Republic of Korea, Amendment to Foreign Investment Promotion Act, http://korea.assembly.go.kr/res/tra_read.jsp?boardid=1000000024&boarditemid=1000022308, 09 Jan 2014