Hello,

I am attorney Kyusung Lee from Weon Law.

After graduating from The Hotchkiss School in Connecticut and majoring in Economics at Ivy League's Brown University, I spent most of my early career abroad, including working at Bank of America Merrill Lynch.

Subsequently, I obtained my attorney's license in Korea and built various credentials, such as being registered as a startup specialist with the Korean Bar Association and becoming a Certified Anti-Money Laundering Specialist (CAMS).

Currently, as an attorney at Weon Law, I handle diverse matters, including foreign-invested companies, English contracts, and corporate legal affairs and advisory services.

In particular, I provide legal services for foreign investors looking to establish and operate businesses in Korea, offering assistance in setting up foreign-invested companies, visas, and guidance on incentive systems.

If you need assistance in this area, feel free to contact me anytime.

Recently, I’ve received numerous inquiries from foreign business representatives about establishing foreign-invested companies in Korea. Many of them also ask whether there are any benefits available when setting up and running such companies.

Indeed, as there is a strong drive to promote foreign investment in Korea, there are corresponding benefits. However, from a foreign investor’s perspective, it can be challenging to understand these benefits without proper guidance.

In today’s post, I will focus on the **Cash Grant System** available to foreign-invested companies for establishing and operating their businesses.

What is the Cash Grant System for Foreign-Invested Companies?

This is a system where, to encourage foreign investments that significantly contribute to the national economy, cash grants are provided for a portion of business expenses. This occurs after a thorough review and negotiation process for investments meeting specific criteria.

< Cash Grant Process >

Application ▶ Review ▶ Budget Assessment ▶ Proposal Preparation ▶ Deliberation and Approval ▶ Contract Execution ▶ Post-Management

< Required Documents for Application >

- Application form (1 copy)

- Investment plan and summary

- Applicant’s financial statements (including those of the foreign-invested company for additional investments)

- Breakdown and confirmation of investment funds by source / Copy of the foreign investment notification form (if applicable)

- Opinion from PM on foreign investment, if obtained

Who is Eligible for the Cash Grant System?

Eligibility is limited to foreign investors acquiring new shares (including investments through retained earnings) with a foreign investment ratio of at least 30%. Investments through long-term loans are excluded.

< Eligible Areas and Fields >

① New Growth Engines

Technologies classified as new growth drivers and core technologies, or directly related process technologies.

② High-tech Industries

Establishment or expansion of factories for high-tech products or technologies.

③ Materials and Components

Sectors like textiles, chemicals, pharmaceuticals, electronics, automotive, and more.

④ Large-scale Job Creation

- Manufacturing, construction, or transport: 300+ employees

- Retail, lodging, finance, science/technology services: 200+ employees

- Education or other personal services: 100+ employees

- Real estate and leasing: 50+ employees

⑤ R&D Centers

Establishment or expansion of research facilities employing at least five specialized researchers in fields related to new growth drivers, high-tech industries, or materials and components.

⑥ Regional Headquarters

Establishment of hubs by global companies to support and coordinate core functions like production, sales, and logistics for at least two overseas subsidiaries, meeting specific criteria (e.g., parent company revenue exceeding KRW 3 trillion).

⑦ Other Eligible Areas

Industries contributing to local job creation, regional industrial competitiveness, and economic development.

If you qualify for the Cash Grant System, various supports are available:

Support may include funding for the purchase or lease of land and buildings for factories or research facilities, construction costs, and procurement of capital goods or research equipment.

The funds are jointly provided by the central and local governments, with the allocation ratio varying depending on whether the location is in the Seoul metropolitan area or other regions.

As shown, establishing a foreign-invested company in Korea can provide diverse benefits. Notably, the Cash Grant System addresses significant financial burdens, making it essential to utilize it whenever possible.

However, as mentioned earlier, the required documentation and procedures can be quite complex, making it challenging for foreign investors to navigate alone.

In such cases, feel free to contact me, Attorney Kyu-Sung Lee at WEON Law Firm, and I will assist in identifying the most suitable programs for your industry and ensuring you receive the benefits.

Thank you!

Contact

Tel: +82 2 6264 7604

Email: kslee@weonlaw.co.kr