Korea tightens investment visa rules for foreigners

July 13, 2010 - PRLog -- Foreign entrepreneurs and investors will now have to invest more capital in order to establish a company in the Republic of Korea under the revised investment visa rules. Foreigners who wish to set up a Korean company and relocate to the Republic to run their business must apply for an investor visa, also known as the D-8 visa.The D-8 visa that is usually issued for up to one year mandates a minimum investment of KRW50 million (USD41,239). However, Korean authorities have announced changes in the minimum investment requirement, raising the minimum limit from KRW50 million to KRW100 million (USD82,467). The revision is to ensure that this visa is made available only to those foreign entrepreneurs who are serious about starting and growing their business in the Korean Republic.

The increased investment limit has sparked concerns about Korea’s attractiveness to foreign investors. According to Korean daily Joong Ang, an official from a foreign chamber of commerce said “Raising the minimum investment amount isn’t the right message Korea should be giving foreigners when it is trying to attract foreign investment. Why should investors be penalized for the illegal entry of some foreigners?”

Although the Korean authorities reckon that the increased ceiling will not have a significant impact on foreigners, the move comes at a time when Asian economies are turning increasingly competitive and are introducing measures to woo foreign investment - be it lowering taxes, easing immigration policies, lowering entry barriers for foreign investors, or enhancing company incorporation procedures. Take Singapore for instance. Under the Singapore EntrePass (http://www.guidemesingapore.com/work-permit/c329-singapor...) visa scheme, foreign entrepreneurs are required to make a minimum investment of SGD50,000 (USD36,150). The capital requirements under the Singapore EntrePass Visa scheme is significantly lower as compared to Korea’s investment visa. Moreover, Singapore poses a more business friendly environment. Singapore company incorporation can be completed within a day’s time while it takes approximately 2-3 weeks to incorporate a company in Korea.

With Korea raising the investment ceiling, it is possible that businesses might turn towards other low-cost jurisdictions for doing business.

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