ANNOUNCEMENT 05 Aug 2020

In August 2020, the Korean Ministry of Trade, Industry, and Energy (MOTIE) implemented revisions to the Enforcement Decree of the Foreign Investment Promotion Act, citing national security concerns, leading to changes in the country's FDI regime. 

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Korean Law Information Center (국가법령정보보센터). "Enforcement Decree of the Foreign Investment Promotion Act" ("외국인투자 촉진법 시행령") of 1 April 2021. Available at:
https://www.law.go.kr/%EB%B2%95%EB%A0%B9/%EC%99%B8%EA%B5%AD%EC%9D%B8%ED%88%AC%EC%9E%90%EC%B4%89%EC%A7%84%EB%B2%95%EC%8B%9C%ED%96%89%EB%A0%B9

United Nations UNCTAD. Investment Policy Monitor. Korea, Republic of - Amending the Enforcement Decree of the Foreign Investment Promotion Act. "Amending the Enforcement Decree of the Foreign Investment Promotion Act" of 5 August 2020. Available at:
https://investmentpolicy.unctad.org/investment-policy-monitor/measures/3584/korea-republic-of-amending-the-enforcement-decree-of-the-foreign-investment-promotion-act

United Nations UNCTAD. Investment Policy Hub Home. Investment Laws Navigator. Korea, Republic of - Enforcement Decree of the Foreign Investment Promotion Act. "Enforcement Decree of the Foreign Investment Promotion Act" of 30 August 2017. Available at:
https://investmentpolicy.unctad.org/investment-laws/laws/311/korea-republic-of-enforcement-decree-of-the-foreign-investment-promotion-act

Inception date: 05 Aug 2020 | Removal date: open ended

FDI: Entry and ownership rule

On 5 August 2020, the Korean Ministry of Trade, Industry, and Energy (MOTIE) implemented amendments to the Enforcement Decree of the Foreign Investment Promotion Act, citing national security concerns, leading to changes in the country's FDI regime. 

According to the new FDI framework, MOTIE can now request that the Minister of National Defense or other heads of relevant agencies submit a review request to the Foreign Investment Committee on the grounds that "there is a 'high' possibility of leakage of core national technologies and where a foreigner’s acquisition of de facto control over the management of an existing domestic company by acquiring its stocks, etc. may threaten national security." Once the review is conducted and the results are returned to MOTIE, the Ministry has 90 days to make a decision regarding the national security concern. 

Notably, relevant amendments to the Foreign Investment Promotion Act were announced in the past (please, see related state acts). 

 

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A