Corea del Sud: Invertir a Corea del Sud
Global foreign direct investment (FDI) flows in the first half of 2021 reached an estimated USD 852 billion, showing stronger than expected rebound momentum, with an increase of 78% of the partial-year growth rate on the previous year according to UNCTAD’s Investment Trends Monitor released on October 2021. The global FDI outlook for the full year 2021 has also improved from earlier projections. The current momentum and the growth of international project finance are likely to bring FDI flows back beyond pre-pandemic levels. Nevertheless, the duration of the health crisis and the pace of vaccinations, especially in developing countries, as well as the speed of implementation of infrastructure investment stimulus, remain important factors of uncertainty. Other important risk factors, including labour and supply chain bottlenecks, energy prices and inflationary pressures, will also affect final year results. (UNCTAD, October 2021). Covid’s impact on developing markets and shifting investment from China are major trends that will impact foreign investment in 2022.
According to UNCTAD's 2021 World Investment Report, FDI to the Republic of Korea declined by 4% to USD 9.2 billion in 2020 from USD 9.6 billion in 2019. FDI stocks increased to USD 265 billion, up from USD 135 billion in 2010. Although the country was among the first to contain the pandemic and economic growth remained strong, a sharp decline in cross-border M&As caused the drop in FDI.In 2020, M&A fell from USD 3.8 billion in 2019 to - USD 1.9 billion, driven by large disinvestments. Despite the overall decline, FDI inflows continued to be robust in some sectors, particularly in sectors related to artificial intelligence (AI), big data, cloud computing, as well as electric cars and biotechnology. Inflows of FDI pledged to these industries grew by 9.3% to USD 8.4 billion. According to data from OECD, Japan, the US, the Netherlands and the UK hold most of FDI stock. Investments have been mainly oriented towards manufacturing, finance and insurance, trade, hospitality, real estate, information and communication, and transportation.
South Korea's appeal in terms of foreign direct investment is the result of the country's rapid economic development and the country’s specialisation in new information and communication technologies. However, the lack of general transparency in regulations remains a major concern for foreign investors. The World Bank esteems that the Republic of Korea is a country with a highly developed business environment as testified by its 5th position in ranking of the last 2020 Doing Business report.
The latest United Nation Asia-Pacific Trade and Investment Trends Report provides additional information on FDI in South Korea in Asia-Pacific in 2021 and 2022.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 9,634 | 8,765 | 16,820 |
FDI Stock (million USD) | 241,657 | 264,920 | 263,253 |
Number of Greenfield Investments* | 117 | 83 | 103 |
Value of Greenfield Investments (million USD) | 3,608 | 3,966 | 4,597 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | South Korea | OECD | United States | Germany |
Index of Transaction Transparency* | 8.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 6.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
South Korea's strong points include:
South Korea's weak points include:
Nevertheless, some restrictions and interdictions exist in public administration, education, national defence, energy, media sectors.
For more information, visit the Invest Korea website.
The South Korean government significantly increased cash incentives for foreign companies to encourage more investment at home. In 2021, FDI flows to South Korea recorded a historical high of USD 29.51 billion.
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Actualitzacions: January 2023