Korea Attracts Record High Foreign Direct Investment

Korea is experiencing a significant surge in foreign direct investment (FDI) pledges, reaching an all-time high during the first nine months of this year. The Ministry of Trade, Industry, and Energy revealed that FDI commitments in Korea increased by 11.3 percent year-on-year, reaching a staggering $23.95 billion for the January-September period, compared to $21.52 billion the previous year.

This record-breaking figure represents the highest FDI amount ever recorded for any nine-month period, signifying the growing appeal of Korea as an investment destination. What’s more, the data also reveals that a substantial portion of the pledged investment has materialised, with $13.92 billion of actual investment arriving in South Korea, marking a remarkable 20.2 percent year-on-year increase.

The industry ministry attributes this remarkable FDI growth to increased investments in advanced sectors, particularly semiconductors and secondary batteries. Despite ongoing global uncertainties, these investments are expected to fortify domestic supply chains and stimulate job creation.

In terms of industries, the manufacturing sector saw FDI pledges surge by 15.7 percent year-on-year, reaching $9.02 billion. Notably, the electronics and electric fields recorded a substantial 27 percent increase in foreign investment, totalling $3.32 billion. The chemical engineering sector also experienced remarkable growth, with FDI commitments soaring by 61.1 percent to $3.01 billion.

The service sector, too, contributed to the overall FDI growth, with a 9.0 percent year-on-year rise in pledges, amounting to $13.8 billion for the January-September period. This growth was led by the financial and accommodation fields, showcasing a diverse range of investment opportunities within the Korean economy.

In terms of investors, while the United States and Japan experienced declines in FDI commitments, other regions displayed remarkable growth. The European Union increased its investments by 38.1 percent, reaching $4.0 billion. Investment from China, Hong Kong, and Taiwan also surged by 49.9 percent year-on-year, totalling $2.23 billion.

Despite the overall growth in FDI, investment in the form of mergers and acquisitions experienced a slight dip, falling by 5.5 percent year-on-year to $7.16 billion.

Korea’s ability to attract record-high FDI, particularly in advanced sectors critical to its economy, underscores its resilience and attractiveness to international investors. These investments not only contribute to economic growth but also help solidify Korea’s position in global supply chains. As the nation continues to foster a welcoming business environment, it remains a compelling destination for foreign investors seeking opportunities in Asia.