Executive summary
Korea attracted the highest notified foreign direct investment in its history in 2025, and in January 2026 the National Assembly passed a dedicated semiconductor support act. For a foreign operator, the question is no longer whether Korea is open to inbound investment, but where a mid-sized company can realistically fit inside a market shaped by a few very large programmes. This guide uses only official Korean and Indian sources and states plainly where the evidence stops.
Policy support is now legislated, not just announced
The Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry passed the National Assembly plenary on 29 January 2026, establishing a semiconductor special account with a ten-year duration, a basic competitiveness plan prepared every five years, and a presidential semiconductor competitiveness committee. Parliamentary passage is not the same as implementation on that date.
The implementing decree, approved at the State Council on 4 August 2026 and effective 11 August 2026, allows national and local governments to bear 50% to 100% of total project costs for specified cluster industrial infrastructure. That concerns qualifying infrastructure, not an across-the-board subsidy on the investment of a company.
The 2027 budget request from the trade ministry, published 1 September 2026, proposes a semiconductor special account of 2.6 trillion won overall, including 2.1 trillion won under the industry ministry. This is a proposal, and parliamentary review determines the final appropriation.
Inbound investment is a record, with two caveats
The trade ministry reported on 7 January 2026 that notified FDI in 2025 reached USD 36.05 billion, up 4.3% on 2024, an all-time record. Arrivals, the money that actually came in, were USD 17.95 billion, up 16.3%, the third highest on record. Greenfield notifications were USD 28.59 billion (up 7.1%) and mergers and acquisitions USD 7.46 billion (down 5.1%). Manufacturing notifications were USD 15.77 billion and services USD 19.05 billion.
Keep two distinctions in mind. Notification is a commitment, not a receipt. And the ministry names representative projects without publishing individual amounts: an AWS AI data centre, Amkor Technology semiconductor back-end processing, Air Liquide semiconductor process gases, and Sartorius biopharmaceutical raw materials. Those examples show what is being attracted, not that any facility was operational.
For direction of travel, the Issue Note 2026-15 from the Bank of Korea (18 June 2026) records Korean overseas direct investment falling to USD 41.2 billion in 2025 from USD 49.7 billion in 2024. That is the measure used by the central bank, on a different statistical basis from the notification series of the ministry, so the two should not be placed side by side as one number.
Labour and demographics
The demographics are the least ambiguous part of the picture: the workforce is shrinking and ageing, and the government has made foreign talent retention an explicit policy lever.
Talent and testing routes
The Ministry of Justice introduced a K-STAR visa track from February 2026, expanding the number of outstanding foreign researchers and graduates eligible for F-2 residence from about 100 a year to 500 to 600. It targets masters and doctoral level talent, not general staff.
The Ministry of SMEs and Startups announced on 29 June 2026 seven newly designated regulatory-free zones and thirteen regulatory exceptions, allowing demonstrations of new technologies from hydrogen power to recycled carbon fuel. Participation conditions sit in the notice of each zone.
The Invest KOREA programme from KOTRA describes location support through foreign investment zones, free trade zones and free economic zones. The 2025 incentive brochure from KOTRA raised cash grant ceilings permanently by 5 to 20 percentage points and, for 2025 only, temporarily up to 75%, against a 200 billion won cash grant budget. The 75% headline was a 2025 measure, and we did not verify an extension, so it should not be quoted as a 2026 entitlement.
The Korea-India corridor
The state visit of President Lee Jae Myung to India ran 19 to 21 April 2026, with the meeting between the leaders on 20 April in New Delhi. The two governments issued a Joint Strategic Vision for the India-ROK Special Strategic Partnership covering the next five years, 2026 to 2030.
In the joint press statement of 20 April 2026, bilateral trade was described as having reached twenty-seven billion dollars, with an ambition to take it to fifty billion dollars by 2030. The trade figure is a statement by the leaders, not a dated customs observation, and the fifty billion dollars is a target. Two institutional outputs matter more operationally: an India-Korea Financial Forum and an Industrial Cooperation Committee.
We did not verify the status of a CEPA upgrade timetable, and we found no official agreement called ESAPA, so neither is described here as an existing arrangement.
What we would do first
What remains uncertain
We did not clear the widely cited semiconductor tax credit rates or the 33 trillion won support package against an allowed official source in this pass, so they are left out rather than approximated. The 2027 special account is a budget proposal. We did not find a verified nationwide count of foreign-invested firms, and a tenant count for a free economic zone should not be used as a substitute. The 2026 cash-grant notice was not obtained, and manufacturing employment was not extracted from the survey tables.
The bottom line
The official data for Korea shows an economy actively buying inbound capital and technology while it manages a shrinking workforce. For a mid-sized operator, the realistic path is supplier qualification into a named anchor programme, not a general market entry. If you are evaluating a Korea base, or serving Korean anchors from India or elsewhere in Asia Pacific, tell us what you are working on and the capabilities you bring. This guide is general analysis, not legal, tax or investment advice.