CAPITAL INCREASE IN FOEIGN DIRECT INVESTMENT IN KOREA

1. Understanding Foreign Direct Investment in Korea

Foreign direct investment in Korea has become increasingly attractive due to the country’s strategic location, advanced infrastructure, and transparent legal system. Investors worldwide are keen to expand their businesses by increasing capital in their Korean subsidiaries or newly established ventures. However, understanding the proper procedures and legal requirements for capital increase is crucial to ensure compliance and avoid delays.

2. Capital Increase in Foreign Direct Investment in Korea

A capital increase in foreign direct investment in Korea involves registering the capital injection with the registry division of the competent court. This process is an essential step to legally validate the investment under Korean law. One of the advantages of investing in Korea is the swift registration process, which typically does not exceed three working days.

3. Required Documents for Capital Increase Registration

To proceed with a capital increase in foreign direct investment in Korea, investors must prepare and submit specific documentation. These requirements are published by the Registry of the Supreme Court Internet Register Office. The following are the key documents needed:

• Two copies of the notification form: This includes Form 1 of the Enforcement Rules of the Foreign Investment Promotion Act. The form is titled “Notification of foreign investment by acquisition of stocks or contribution and application for its permission.”
• Certificate of nationality of the foreign investor: Depending on the investor’s status, the requirements are:
  • For foreign individuals: a valid passport;
  • For foreign corporations or organizations: a business license, certificate of incorporation, or any document proving that the company is based in the said country.

These documents support the legitimacy of the foreign direct investment in Korea and are crucial for the approval process.

4. Special Considerations for Non-Cash Investments

In cases where the foreign direct investment in Korea involves non-cash contributions, additional documents are required. These include:

• Documents certifying the object of investment: For example, paperwork that certifies the monetary value of industrial property rights, machinery, or other non-cash assets.
• Power of attorney and identification of the agent: If the application is filed by an agent on behalf of the foreign investor, a signed power of attorney and a copy of the agent’s ID card must be submitted.

Ensuring the accuracy of these documents helps streamline the capital increase process and strengthens the legitimacy of the foreign direct investment in Korea.

5. Online Registration for Capital Increase in Korea

To facilitate the capital increase process, Korea provides an online registration system through the Supreme Court’s official website. This platform allows foreign investors to submit the necessary application forms and track the status of their registration.

To access the registration portal, investors can follow these steps:

• Visit www.iros.go.kr;
• Navigate to Library;
• Click on Registration Application Form;
• Select Corporate Registration;
• Search for Registration of Incorporation.

Online submission significantly improves the convenience and efficiency of handling foreign direct investment in Korea, especially for investors located abroad.

6. Compliance with the Foreign Investment Promotion Act

All capital increases in foreign direct investment in Korea must comply with the Foreign Investment Promotion Act. This law aims to promote foreign investments by providing incentives and a transparent legal framework. It also sets forth the requirements and procedures for acquiring or increasing capital through stock purchases or contributions.

Adhering to the provisions of this act is crucial for investors to avoid legal complications and ensure the successful registration of their capital increase.

7. Why Korea Attracts Foreign Direct Investment

Korea’s proactive policies, skilled workforce, and high-tech infrastructure make it a favorable destination for foreign direct investment. The ease of capital increase registration and the short processing time further enhance its appeal. Investors benefit from robust legal protections and access to one of Asia’s most dynamic markets.

Foreign direct investment in Korea continues to grow, with various sectors such as technology, manufacturing, and services welcoming international capital. Understanding the capital increase procedure ensures that investors can fully leverage Korea’s economic opportunities.

8. Conclusion: Navigating Capital Increases in Korea Effectively

Foreign direct investment in Korea offers numerous benefits, but navigating the capital increase process requires precision and legal compliance. By preparing the correct documents, understanding the legal framework, and utilizing online tools, investors can smoothly complete their capital increase and contribute to Korea’s growing economy.

For any foreign investor considering expansion, a well-managed capital increase process is key to long-term success in Korea’s dynamic market.

9. About NYLA – Korean Legal Office 

■ NYLA – Your Trusted Legal Partner in Korea

At NYLA, we understand that the success of foreign businesses in Korea requires not only a solid business strategy but also reliable legal support. With a team of experienced Korean attorneys and legal professionals, NYLA provides tailored legal services for companies, investors, and individuals operating or planning to establish a presence in Korea.

We support our clients throughout the entire business journey with comprehensive services, including:

• Legal consultation on company establishment, taxation, and immigration;
• Advice on commercial real estate, franchising, and product distribution;
• Support in human resources, marketing, and business strategy.

In addition to legal advisory, NYLA also represents clients in civil litigation cases related to business, labor, marriage, family, and inheritance to ensure their rights and interests are fully protected.

■ Contact NYLA

If you’re a foreign business or individual looking for a reliable legal partner in Korea, NYLA is here to help. We are committed to delivering effective, practical, and personalized legal solutions for every client.

With a proven track record of assisting hundreds of international clients, our team is equipped to help you navigate complex legal challenges—whether it’s commercial disputes, contract issues, or foreign investment guidance.

Don’t let legal matters hold you back. Let NYLA be your trusted guide in the Korean market.

■ Get in touch with NYLA for expert legal support

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