Korea
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Business practicalities in <strong>Korea</strong><br />
Restrictions and prohibitions on foreign investment:<br />
Foreigners are restricted from foreign investment in<br />
the following cases: where it threatens the maintenance<br />
of national safety and public order; where it has<br />
harmful effects on public hygiene or the environmental<br />
preservation or is against <strong>Korea</strong>n morals and customs;<br />
and where it violates the Acts and subordinate statutes<br />
of the Republic of <strong>Korea</strong>. Furthermore, out of a total of<br />
1,145 categories of business under the <strong>Korea</strong>n Standard<br />
Industrial Classification (KSIC), foreign investment<br />
is not permitted in 60 categories, including public<br />
administration, diplomacy, national defence, nuclear<br />
power generation, radio broadcasting, and terrestrial<br />
television broadcasting. Although foreigners can invest in<br />
all of the remaining 1,085 investment categories, 29 of<br />
them are subject to foreign ownership ceilings. Foreign<br />
ownership ceilings and additional criteria are updated by<br />
the Ministry of Trade, Industry and Energy through its<br />
Integrated Public Notice of Foreign Investment.<br />
Foreign Investment Restricted Categories (issued on April 26, 2012):<br />
Business Categories (KSIC) Restrictions Competent authority<br />
Satellite and other broadcasting<br />
(60229)<br />
Cable communications<br />
(61210)<br />
Mobile communications<br />
(61220)<br />
Satellite communications<br />
(61230)<br />
Domestic commercial bank<br />
(64121)<br />
Permitted when foreign investment ratio is<br />
below 49% (below 20% for Internet multimedia<br />
broadcasting contents operation in general<br />
programming)<br />
Permitted when the sum of shares held by foreign<br />
governments of foreigners is less than 49% of the<br />
total issued shares<br />
Permitted when foreign investment ratio is<br />
below 49% (below 20% for Internet multimedia<br />
broadcasting contents operation in general<br />
programming)<br />
Permitted when the sum of shares held by foreign<br />
governments of foreigners is less than 49% of<br />
the total issued shares. However, there are no<br />
restrictions on value added communications<br />
businesses.<br />
Permitted when foreign investment ration is<br />
below 25%. Permitted only for commercial banks<br />
and regional banks<br />
Ministry of Culture, Sports<br />
and Tourism<br />
Ministry of Culture, Sports<br />
and Tourism<br />
Ministry of Culture, Sports<br />
and Tourism<br />
Ministry of Culture, Sports<br />
and Tourism<br />
Financial Services Commission<br />
Government policies for investment promotion:<br />
With an eye towards global market trends, the <strong>Korea</strong>n<br />
Government has selected 17 industries across three<br />
sectors that are expected to serve as future drivers of<br />
economic growth – and in which foreign investment<br />
is being promoted. The designated “growth-engine”<br />
industries include: renewable energy, low-carbon<br />
energy technologies, green transportation systems, IT<br />
convergence citywide, LEDs in the green technology<br />
sector, broadcasting and communications media,<br />
intelligent robots, bio-pharmaceutical and medical<br />
devices, information technology, food industry and<br />
nano-convergence in the high-tech convergence<br />
sector, healthcare, green financing, cultural content and<br />
software, education, MICE (conventions and exhibitions),<br />
and tourism-related industries in the value added service<br />
sector.<br />
Value added strategy in core industries: <strong>Korea</strong>’s high<br />
competency in core industries such as ship building,<br />
automobiles, and steel making has been obtained<br />
through high technological development supported by<br />
the Government. Although these industries have shown<br />
significant growth, competition in the global market has<br />
intensified. In response, <strong>Korea</strong>n companies are focusing<br />
on the development of high value-added products and<br />
services, such as hybrid and fuel cell-powered vehicles,<br />
and specialised ships that require core advanced<br />
technology and advanced materials. Opportunities exist<br />
for foreign companies to add knowledge and technology<br />
to these areas of industry.