Foreign companies establishing a Korean entity often discover the foreign investment notification only after they have already committed to a structure and a timeline. That ordering is expensive, because the notification is not a formality at the end of the process — it is the step that determines whether your Korean presence qualifies as foreign direct investment at all, and with it, whether the incentive framework, the D-8 visa route, and the protections of the Foreign Investment Promotion Act apply to you.
This guide covers what the notification is, who must file it, how the filing works in practice, and what changes once it is complete.
What the foreign investment notification is
The Korea foreign investment notification is a formal declaration, filed before or concurrent with the remittance of investment funds, that a foreign investor intends to acquire equity in a Korean company and that the investment meets the threshold qualifying it as foreign direct investment under the Foreign Investment Promotion Act (FIPA).
The governing threshold, set out in Article 2(3) of the FIPA Enforcement Decree, requires:
- An investment of not less than KRW 100 million per foreign investor, and
- Acquisition of 10 percent or more of the voting shares of the Korean company
Where two or more foreign investors invest jointly and the combined total reaches KRW 100 million, the investment can still be recognised as FDI provided each investor’s holding, when combined, meets the 10 percent threshold.
Investments below this threshold are not blocked, but they fall under the stock acquisition notification rules of the Foreign Exchange Transactions Act rather than FIPA, and the consequences differ significantly.
Why the notification matters beyond paperwork
Completing the FIPA notification and having it accepted transforms the Korean entity into a foreign-invested company (외국인투자기업). That status is not merely a label. It determines:
- Incentive eligibility. Cash grants, site and facility support, and tax reductions administered through national and municipal programmes are generally available only to foreign-invested companies. A Korean entity without the notification, or one where the investment fell below the threshold, typically falls outside this framework entirely.
- D-8 visa access. The corporate investment visa requires the investor to hold a qualifying investment in a foreign-invested company. The notification and the resulting foreign-invested company registration are the evidentiary basis for the visa application.
- FIPA protections. Foreign-invested companies benefit from a set of statutory guarantees covering repatriation of investment and returns, equal treatment with domestic companies, and protection against expropriation without fair compensation.
- Reporting obligations. Foreign-invested companies are subject to post-establishment reporting requirements that do not apply to ordinary Korean entities.
The notification is therefore less a compliance step and more a threshold that separates two materially different regulatory positions.
Who files and where
The notification is filed by the foreign investor, not by the Korean company being established. It is submitted to one of two authorities:
- A designated foreign exchange bank in Korea — any bank authorised to handle foreign exchange transactions can accept the filing, and most major commercial banks have dedicated teams for this
- KOTRA (Korea Trade-Investment Promotion Agency) or its investment arm Invest KOREA, which handles filings directly and can advise on documentation
In practice, most foreign investors file through the bank they will use for the capital remittance, since the notification and the remittance happen in close sequence and the bank needs to see both. KOTRA is the better route where English-language support is the priority or where the investor wants advisory alongside the administrative filing.
The notification sequence in practice
- Prepare the notification form. The standard form (양식) is available from KOTRA and designated banks. It records the investor’s identity, the Korean company details, the investment amount, and the intended shareholding.
- Attach supporting documents from the foreign parent. At minimum: proof of the investor’s identity or corporate existence, evidence of the source of funds, and in many cases a board resolution or equivalent authorisation.
- Submit to the designated bank or KOTRA. The bank reviews the documentation and, where satisfied, issues the foreign investment notification certificate (외국인투자신고서).
- Remit the investment funds. The capital is wired to a temporary Korean account. The bank records the inward remittance against the notification.
- Proceed to corporate registration. The notification certificate and remittance confirmation become part of the corporate registry filing. Without them, the entity cannot be registered as a foreign-invested company.
- Register as a foreign-invested company. After corporate registration is complete, the foreign-invested company status is formally recorded, completing the FIPA process.
Timing: when to file
The notification must be filed before or at the time of the capital remittance. It cannot be backdated, and a remittance made without a prior notification does not retrospectively qualify as a FIPA investment. This is the sequencing error that most often forces companies to restructure: the money arrives in Korea before the notification is in place, and the investment falls outside the FIPA framework as a result.
There is no prescribed lead time beyond that requirement. In practice, banks typically process straightforward notifications within a few business days of receiving complete documentation, so the filing can sit close to the remittance date without risk, as long as the documents are ready.
What can go wrong
Document certification gaps
Foreign corporate documents — certificates of incorporation, articles of association, board resolutions — must typically be notarised and apostilled in the home jurisdiction before they are accepted in Korea. Where the home country is not party to the Apostille Convention, consular legalisation applies. These steps take time, and they are consistently the part that delays otherwise complete filings. Starting them early, before any Korean steps begin, is the single most effective timeline management tool available.
Investment below threshold
Remitting less than KRW 100 million, or structuring the shareholding below 10 percent, means the investment does not qualify as FDI regardless of intent. The notification is still filed, but it is processed under the Foreign Exchange Transactions Act, not FIPA, and the foreign-invested company status and its associated benefits do not follow. This is a structuring decision, not a documentation problem, and it cannot be corrected after the fact without unwinding and re-doing the investment.
Post-establishment reporting failures
Once registered as a foreign-invested company, the entity has ongoing reporting obligations, including annual reports to the relevant authority. These are often the obligations that companies managing their Korean presence remotely miss first. Failures accumulate penalties and can complicate D-8 visa renewals, since immigration reads the company’s compliance record as part of the renewal assessment. Our post-registration compliance calendar covers the full first-year deadline set: Korea post-registration deadlines.
Additional notifications: changes after establishment
The initial notification is not the only filing the foreign investment framework requires. Changes to the investment — additional capital injections, share transfers between foreign investors, or changes in the investor’s identity — trigger their own notification requirements. The threshold for what constitutes a material change requiring notification is set by regulation and worth confirming before any post-establishment transaction, since unreported changes can affect foreign-invested company status.
Frequently asked questions
What is the minimum investment required for the Korea foreign investment notification?
Under Article 2(3) of the FIPA Enforcement Decree, the minimum is KRW 100 million per foreign investor, combined with acquisition of 10 percent or more of the voting shares. Below this threshold, the investment is handled under the Foreign Exchange Transactions Act rather than FIPA, and foreign-invested company status is not available.
Can the foreign investment notification be filed after the money is sent to Korea?
No. The notification must be filed before or at the time of the capital remittance. A remittance made without a prior notification does not retrospectively qualify as a FIPA investment, which means the foreign-invested company status and its associated incentives and visa route are not available.
Where is the foreign investment notification filed?
At a designated foreign exchange bank in Korea, or directly with KOTRA or Invest KOREA. Most investors file through the bank handling the capital remittance, since the two steps happen in close sequence.
How long does the notification process take?
The bank review of a straightforward, complete filing typically takes a few business days. The element that most often extends the timeline is preparation of certified and apostilled documents from the foreign parent company, which can take several weeks depending on the home jurisdiction.
Does a branch office require a foreign investment notification?
A branch registration follows a different procedure from a subsidiary incorporation and does not use the FIPA notification process in the same way. Branches generally cannot hold foreign-invested company status, which is why they typically fall outside the incentive and D-8 visa frameworks.
Work with Pearson & Partners Korea
Pearson & Partners Korea manages the foreign investment notification process for clients alongside the full Korea business registration sequence — handling the bank filing, document preparation, capital remittance coordination, and foreign-invested company registration as a single managed process rather than a series of separate steps.
If you are planning a Korean entity and want to understand how the notification fits your timeline and structure, we are happy to talk it through. Reach us at pearsonkorea.com/contactus or on 02 6952 7579. Our offices are at WTC Trade Tower, 30F, 511 Yeongdong-daero, Gangnam-gu, Seoul.
For the full registration sequence from structure choice through to business registration certificate, see our complete guide to Korea business registration.
This article is provided for general information only and does not constitute legal, tax, or investment advice. FIPA thresholds, procedures, and programme terms change; confirm current details with a qualified adviser or the relevant authority before acting.
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