South Korea

South Korea's National Assembly passed the Special Act on Investment in the United States in March 2026, establishing the Korea-U.S. Strategic Investment Corporation to deploy USD 350 billion—funded via Bank of Korea foreign-exchange reserves and government-guaranteed international bond issuance—across U.S. strategic industries. The Ministry of Industry, Trade, and Resources (MOTIR) confirmed it would maintain the terms of the November 2025 agreement even after the IEEPA tariff ruling, signalling that the outbound capital commitment remains the operative framework for bilateral investment flows.

JURIST / Stimson Center · 2026-05-22

The government's 2026 Economic Growth Strategy designates a National Growth Fund of KRW 30 trillion (approx. USD 20.6 billion) to channel capital into strategic domestic industries, with a KRW 600 billion public-participation tranche offering tax incentives slated for Q3 2026 launch. A separate Korean-style sovereign wealth fund with initial capital of KRW 20 trillion, seeded from government-held stakes and public-sector assets, will prioritise semiconductor and high-tech investment.

The Korea Herald · 2026-05-22

According to Ministry of Trade, Industry, and Energy (MOTIE) data, inbound FDI pledges to South Korea rose 5.7% in 2024 to USD 34.5 billion, with manufacturing up 21.6% to USD 14.49 billion; materials, parts, and equipment surged 52.7% and bio-health pledges more than tripled. The European Union remained the largest foreign investor in Korea with an FDI stock of EUR 53 billion (24.4% of Korea's total), ahead of Japan (18.5%) and the United States (16.5%).

Lloyds Bank Trade Portal / EU Delegation to Korea · 2026-05-22

Following the U.S. Supreme Court's invalidation of IEEPA tariffs, the Trump administration launched a Section 301 Trade Act investigation targeting 16 jurisdictions including South Korea, preserving tariff leverage via an alternative statutory authority. Sectoral Section 232 tariffs on steel and aluminium remain at 50%, while autos, timber, and lumber are held at 15% under the November 2025 Korea-U.S. Strategic Trade and Investment Deal, with pharmaceutical and semiconductor tariff ceilings subject to ongoing negotiation.

Congressional Research Service / JURIST · 2026-05-22

The USTR's 2026 National Trade Estimate Report on Foreign Trade Barriers expanded criticism of South Korea's non-market policies, adding new issues including tariff-rate quotas (TRQs) for rice and soybeans and government procurement policies for AI infrastructure. The Korea Economic Institute of America's Q1 2026 ledger also notes that South Korea's policy permitting export of high-precision map data—a longstanding digital trade barrier—alters the investment dynamic for technology companies operating across the bilateral corridor.

Korea Economic Institute of America · 2026-05-22

A pending amendment to the Enforcement Decree of the Customs Act, effective 1 January 2026, expands South Korea's anti-circumvention framework to explicitly cover third-country circumvention—capturing goods where minor modifications are made in a third country before export to Korea, or where parts are assembled in a third country for final export. The Korea Trade Commission (KTC) has simultaneously launched a monthly Trade Remedy Brief to provide ongoing updates on significant cases and policy developments.

Chambers and Partners International Trade Guide 2026 · 2026-05-22

Consensus forecasts for South Korea's 2026 GDP growth cluster around 1.9–2.1%, with the OECD projecting 2.1%, AMRO 1.9%, and ING 2.0%, up from 1.0–1.2% in 2025; the recovery is anchored by robust AI-driven semiconductor demand and a rebound in construction investment projected at 2.4% after a 9.5% contraction in 2025. The Korea Development Institute projects facility investment growth of 3.3% in 2026, while domestic consumption is expected to expand 2.2%, supported by government subsidy policies.

AMRO Asia / Korea Economic Institute of America · 2026-05-22

The Bank of Korea's policy rate is projected to hold at 2.5% through end-2026, with ING assessing that the rate-cut cycle has concluded; inflation is forecast at approximately 1.9–2.1%, though a persistently weak Korean won—partly attributable to the USD 20 billion annual outbound investment commitment—sustains upward pressure on import prices. The 2026 budget projects a managed fiscal deficit of 4% of GDP, with national debt reaching 51.6% of GDP, materially worse than prior projections.

ING Think / East Asia Forum · 2026-05-22

Korea's total exports surpassed USD 700 billion in 2025 for the first time, driven by record demand for high-end AI semiconductors and ships, though the OECD projects export growth to decelerate from 6.8% in 2024 to 3.6% in 2026 as global trade growth slows to 0.5% under sustained tariff headwinds. The government has unveiled a road map for MSCI developed-market index inclusion, including 24-hour onshore foreign-exchange trading commencing July 2026 and streamlined investor entry procedures.

EU Delegation to Korea / The Korea Herald · 2026-05-22

Effective 1 May 2026, the Financial Services Commission (FSC) expanded mandatory English disclosure obligations to all Korea Stock Price Index (KOSPI)-listed companies with assets of KRW 2 trillion or more (265 companies), extending the requirement from 26 key items to all 55 KRX-mandated disclosure items including fair disclosure and inquired disclosure; a third phase covering all KOSPI-listed companies is scheduled for 2028. This reform directly reduces information asymmetry for foreign portfolio investors and lowers due-diligence friction for market-entry transactions.

Financial Services Commission of Korea · 2026-05-22

On 10 March 2026, South Korea promulgated a comprehensive rewrite of the Personal Information Protection Act (PIPA), effective 11 September 2026, introducing a penalty ceiling of 10% of total annual turnover and placing personal supervisory liability on the Chief Executive Officer. The Ministry of Science and ICT (MSIT) and the Personal Information Protection Commission (PIPC) have designated 2026 enforcement priorities as large-volume data controllers, biometric and video data handlers, and major online platforms engaged in manipulative 'dark pattern' practices.

IAPP / Hogan Lovells · 2026-05-22

Korea's National Assembly passed legislation in August 2025 mandating cumulative voting for large listed companies with assets exceeding KRW 2 trillion and expanding audit committee members subject to separate shareholder election from one to two; these amendments are anticipated to take effect September 2026. Concurrently, the Korea Fair Trade Commission (KFTC) is set to gain expanded investigative powers—including higher fine caps and potential compulsory investigative authority—as the government advances targeted platform regulation, raising compliance exposure for digital-market entrants.

Asian Corporate Governance Association / MLex · 2026-05-22