Overview

Foreign Direct Investment ("FDI") is a form of business activity conducted with the aim of directly participating in the management of the companies to be invested in ("subsidiaries") by transferring tangible assets such as capital and manpower, as well as intangible assets such as knowledge, experience, know-how and technologies to these companies overseas.

Investment Procedure

step1 : Feasibillity Study

• Select the specific business and country to invest in.
• Conduct a feasibility study
  • NPV, IRR
  • Sensitivity analysis
  • Project risk analysis

step2 : Investment Plan FDI Registration

• Establish a business plan
  • Source of fund
  • Machinery and equipments to purchase
  • Employees to recruit
  • Plans for getting return on the investment and repayment of loans
• Draft a joint venture agreement, an article of association of the subsidiary and a loan agreement

step3 : Consulting Related Institution

• Consult related institutions with regards to "FDI Registrations"
• Consult related banks about Overseas Investment Credit, Local Financing or Off -Shore Financing, etc

step4 : Agreement on Related Contracts

• Reach an agreement on the joint venture agreement (in case of a joint venture) or other related contracts
• Get preliminary approval on FDI from the authorities of the country where the subsidiary is to be located
• Apply for Overseas Investment Credit or other loans to related banks
• Apply for FDI insurance to KEIC (if necessary)

step5 : FDI Registration

• Execute all related contracts
• Register for FDI with the primary creditor bank (registered bank)
• Get loan approval form banks
• Get FDI insurance approval form KEIC (if necessary)

step6 : Overseas Subsidiary Establishment

• Remit the amount of investment to the overseas subsidiary
• Establish an overseas subsidiary (either through capital injection of loan extension)
• Start running business

step7 : Business Operation and Return on Investment(ROI)

• Run business
• Get ROI either through dividend of loan repayments
• Post management of F (send all materials required by the registered bank)

step8 : Liquidation of Subsidiaries

• Liquidate the subsidiary
• Transfer proceeds accruing from the sale of liquidation of investments to one’s home country
• Report the liquidation to the registered bank