According to the “2025 Q3 Foreign Direct Investment (FDI) Trends” report released by the Ministry of Trade, Industry and Energy (MOTIE), Korea’s FDI inflows showed a moderated trend through the third quarter of the year. While reported FDI declined compared to the previous year, actual inflows decreased only slightly, indicating relatively stable real investment. This performance reflects the combined impact of last year’s record-high base effect and ongoing global uncertainties.
Key Indicators
- FDI reported: USD 20.65 billion (–18.0%)
- FDI arrived: USD 11.29 billion (–2.0%)
- Greenfield arrivals: +23.0% (driven by AI and ICT)
- M&A: Significant decline in both reported and arrived amounts due to the global slowdown in deal activity
- By investor country:
- U.S. ↑ (Reported +58.9%, Arrived +99.7%)
- EU, Japan, China ↓
- By industry:
- Manufacturing ↓ (notably electronics and chemicals)
- Services ↑ (particularly distribution, ICT, and AI-related sectors)
Despite global uncertainty, this quarter’s results suggest that fundamental confidence in the Korean market remains intact. Reported investments adjusted downward, but arrivals remained solid, with U.S. investments showing particularly strong growth. As investment continues to flow into AI, data centers, robotics, and autonomous driving software, Korea’s strategic value in advanced technology sectors is becoming more pronounced. This reflects a broader trend in which global technology companies increasingly view Korea as a key AI infrastructure hub in Northeast Asia.
Core Trends
- Stable real investment despite global volatility
- Sharp increase in U.S.-based tech investment (AI & data centers)
- Growth in greenfield investment → Strengthening of Korea’s industrial ecosystem
- Accelerated structural shift → Decline in some manufacturing vs expansion in ICT and AI-driven services
Globally, the FDI environment remains constrained by high interest rates and geopolitical risks. Nevertheless, investment in AI infrastructure, data centers, cloud services, and automation continues to expand. Within this landscape, Korea is re-emerging as a core destination for technology-focused FDI in Asia, supported by its advanced technology capabilities, stability, and infrastructure competitiveness.
- Decline in large-scale M&A → Shift toward technology-focused and greenfield investments
- Rising investment in AI and data centers → Strong alignment with Korea’s infrastructure strengths
- Corporate entry strategies evolving → From manufacturing-oriented to technology- and data-driven expansion
At HYESUNG, we support foreign companies entering and investing in Korea by providing end-to-end FDI advisory services, including investment strategy, tax and accounting structuring, entity establishment, and market entry support.
Contact
Chris Song, Partner — E. cwsong@hscpa.co.kr
Eunjung Lee, Director — E. ejlee@hscpa.co.kr
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