1. Foreign Investment in Korea
1.1. Background
- According to the “Foreign Investment Promotion Act (FIPA)’, 100% FDI (Foreign Direct Investment) allowed business
- It is possible to do more than 2 businesses within one corporate.
- Minimum investment capital is US $ 50,000 (KRW 50,000,000)
1.2. Investment Procedures
1.2.1. Foreigner Investment Report => Foreign Exchange Transaction Bank (Local Bank such as Woori bank, Kookmin bank, Korea exchange bank, etc.)
1.2.2. Filling up an investment application form
1.2.3. FDI capital remittance from overseas
1.2.4. Business registration => Tax office
1.2.5. Foreign investment registration => Bank or KOTRA (Korea Trade and Investment Promotion Agency)
1.3. Field of Thai Investment in Korea
As of 2009
Type of Business No. of Companies
Manufacture/Trading 18
Wholesale/Retail/Mart 32
Restaurant/Service 10(Source: Ministry of Knowledge and Economy of Korea)
2. Reasons and advantages to invest in the fields of Thai invested industries
2.1. Manufacture/Trading
- Low capital & low manpower: It is not necessary to hiring skillful worker or
2.2. Service Business
- No special benefits to the entrepreneurs in this field
- Most of companies in this type of business are mainly doing business as wholesale, retail, mini supermarket, mart with small scale by importing Thai commodities or consumer products to Asean community as well as operating restaurant business.
2.2.1. Restaurant Business
- In December 2006, the number of Korean tourists to Thailand had over 1 million people next to China and Japan. And its record showed that Koreans are getting familiar with Thai cuisine and its culture continuously. (Korea tourists visited Thailand 841,621 in 2007 and 607,071 in 2008 according to the Tourism authority of Thailand)
- Required to hiring qualified Thai chefs (Certificate of qualification is compulsory) in accordance with the local regulations (The number of foreign chefs are up to the size/scale of the restaurant site and foreign waiter/waitress is not allowed to work in this field only chefs are allowed to work at restaurant as a foreign labor.)
3. Value and growth of Investment
3.1. Current status of Thai investment in Korea
(Unit: 1,000 USD)
Type of Business/Year Value of Investment
Manufacture Service
2006 53 1,047
2007 56 1,970
2008 0 2,110
2009 234 46,224
Total 343 51,351(Source: Ministry of Knowledge and Economy of Korea)
4. Business alliance between Thai and Korea
4.1. Thai Corporations
4.1.1. CPK Foods System Co., Ltd.: A Korea subsidiary of Charon Pokphand Food PCL (Thailand)
4.1.2. Double A Korea: A Korea subsidiary of Advance Agro Public Co.,Ltd. (Thailand)
4.1.3. Thai Orchid: Thai restaurants invested and corporate by Baiyoke Group (Thailand) Two branches are being operating at downtown at the moment. One branch (Thai Orchid, Itaewon Branch) has been awarded as Thai Select restaurant in 2007.
4.2. Thai — Korea Joint Venture: 4 Thai Restaurants
(Meanwhile the number of Thai restaurants in Korea has been increased continuously from 30 places in 2005 to be 60 places in the end of 2009.)
5. Competitors of Thai Investor in Korea
5.1 Korea is locked in a fierce competition with other countries promote foreign investment.
5.2 Major rivals include China, Hong Kong, Malaysia, Singapore, and Taiwan.
5.3 According to the 2009 IMD World Competitiveness Index, Hong Kong ranked second among 57 countries, making it the most competitive country of the six Asian countries. Singapore ranked third, Malaysia 18th, China 20th, Taiwan 23rd, and Korea 27th.
5.4 Competitiveness crucial point for selection
- Business environment encompasses location conditions, labor-management relations, taxation conditions, the protection of intellectual property rights, logistics environment, public services, and the establishment of corporations and the acquisition of realty.
- Living environment encompasses residential conditions, medical service systems, the convenience of transportation, education facilities for foreigners, and the development of communication systems.
- Investment system concerns the investment laws, investment promotion agencies and major investment incentive
5.5 Overlapped in business with Thai investors
- Major investment fields are manufacturer and service industry
- Both industries are related with Food and Restaurant
- Foods, sauce and restaurants industries are overlapped with Vietnam
6. Development of Thai Investors for capacity building
6.1. Invest amounts are increased for last three years and more foods are restaurants are opened due to interests of Thailand to Korean people
6.2. Number of visited Thailand peoples are increased and it makes try more Thai environment and Thai foods.
6.3. Numbers of overseas tourists are increased and it makes attractive international foods in downtown areas in Seoul
6.4. Fields of investment area is limited but it is increasing
7. Obstacles and regulation for investment in Korea
7.1 Comparison of business starting requirements with other countries
Country Number of business Business creation costs
creation procedures (Ratio (%) of per capita GNP)
Korea 8 14.7
Taiwan 6 3.9
Malaysia 9 11.9
Singapore 3 0.7
China 14 4.9
Hong Kong 3 1.8
7.2 Hong Kong and Singapore needs 3 procedures for Business Starting Requirement but Korea needs relatively higher and needs 8 procedures.
7.3 Business creation costs are 1.8% in Hong Kong and 0.7% in Singapore for ration of per capita GNP but Korea reaches at 14.7% 7.4 Korea boasts technological maturity and excellent infrastructures as its competitive advantages, and offers superior human resources as an additional strength
7.5 Market size and market growth potential are estimated as attractive factors of Korea
7.6 Proficiency in foreign languages is its weak factor.
7.7 High technological maturity, innovative environment, and excellent human resources are widely recognized as attractive points by foreign investors
7.8 Comprehensive Comparison for investment levels are as follows
8. Strategies and recommendation for investors
Investment fields are limited for Thai investors and investment should be more diversity to use high technologies and R&D centers which can use the country’s major strengths, such as its excellent human resources and its technological superiority.
Office of Commercial Affairs, Seoul
Source : http://www.depthai.go.th