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Following is the answer to your inquiry from Customized Practical Law Information.

Report on Foreign Investment

□ Advance notification

○ Where a foreigner [if he/she acquires stocks or shares which have been already been issued by a company run by a Korean national or Korean corporation (hereinafter referred to as “existing stocks, etc.”), including specially related persons] intends to make an investment, the foreigner shall report thereon to the Minister of Trade, Industry and Energy in advance (Article 5(1) of the Foreign Investment Promotion Act and Article 6(1) of the Enforcement Decree of the Foreign Investment Promotion Act).

1. Spouse and lineal ascendants and descendants of the relevant foreigner (including lineal ascendants and descendants of the spouse of the relevant foreigner);

2. A foreign corporation where the relevant foreigner and persons in such relationship as prescribed in subparagraph 1 or 3 together hold at least 50 percent of the total number of issued stocks or the total equity investment, or a foreign corporation which is virtually being controlled by the relevant foreigner and said persons;

3. Employees of the relevant foreigner and persons prescribed in subparagraph 2 or 4 (referring to executives in the case of a corporation, and referring to trade employees, other employed persons through an employment contract, or persons who maintain their livelihood by means of money or property of an individual in the case of an individual);

4. A foreign corporation where such a corporation prescribed in subparagraph 2, the relevant foreigner, and such persons prescribed in subparagraphs 1 and 3 together hold at least 50 percent of the total number of issued stocks or the total equity investment.

□ Follow-up report

○ Where a foreigner, in spite of the above, intends to make an investment in one of the following ways, the foreigner shall report within 60 days after the acquisition of stocks, etc. (Article 5(2) of the Foreign Investment Promotion Act).

1.Where a foreign investor has acquired existing stocks, etc. issued by a stock-listed corporation (excluding public corporations referred to in Article 152(3) of the Financial Investment Services and Capital Markets Act and corporations which are restricted to acquire stocks under separate Acts) in accordance with the Financial Investment Services and Capital Markets Act;

2.Where a foreign investor has acquired stocks or shares generated while reserves, revaluation reserves or other reserves of a foreign-capital invested company prescribed by other acts;

3.Where a foreign investor has acquired stocks, etc. of a surviving corporation or a newly incorporated corporation after a merger, the all-inclusive stock swap or transfer, and spinoff by means of stocks he/she is holding at the time of the relevant foreign-invested company's merger, all-inclusive stock swap or transfer with another company, or spinoff;

4. Where a foreigner has acquired stocks, etc. of a foreign-capital invested company registered pursuant to Article 21 of the Foreign Investment Promotion Act by means of purchase, inheritance, testamentary gift, or gift from a foreign investor;

5. Where a foreign investor has acquired stocks, etc. by investing the proceeds from the stocks, etc. which were acquired under the Acts of Korea;

6. Where a foreigner has acquired stocks, etc. using convertible bonds, exchangeable bonds, stock depositary receipts, and such similar ones as may be converted into, acquired as, or exchanged for stocks, etc.

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