- Registration date2026-01-07
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Korea’s annual foreign direct investment (FDI) on a notification basis reached USD 36.1 billion in 2025, up 4.3 percent year-on-year and marking an all-time high. Actual inflows also increased 16.3 percent year-on-year to $18.0 billion, the third-highest figure on record.
Despite a steep decline in investment during the first half of 2025 (down 14.6 percent), overall investor sentiment recovered following the launch of the new administration, which helped restore confidence in Korea’s economy and industries and reduce uncertainty. In particular, the government’s strong policy drive in artificial intelligence (AI), combined with proactive investment promotion efforts surrounding the Gyeongju APEC Summit, proved effective.
In addition to quantitative growth, the quality of investment also improved. Greenfield investment, which has a strong impact on regional economic revitalization and job creation, reached its highest level to date. High-quality investments linked to advanced industries such as AI, semiconductors, and biotechnology also expanded, supporting expectations that these inflows will contribute significantly to the development of Korea’s economy and industries.
By type, greenfield investment notifications rose 7.1 percent year-on-year to $28.6 billion, the highest level on record. M&A investment totaled $7.5 billion, down 5.1 percent from the previous year; however, the pace of decline narrowed significantly after a sharp drop of 54.0 percent in the third quarter.
By industry, manufacturing investment increased 8.8 percent year-on-year to $15.8 billion, led by notable investment in key materials for advanced industries, reflecting efforts to strengthen supply chains amid external uncertainty. Investment rose sharply in chemicals (up 99.5 percent to $5.8 billion) and metals (up 272.2 percent to $2.7 billion), while declines were recorded in electrical and electronics (down 31.6 percent to $3.6 billion), as well as machinery and medical precision equipment (down 63.7 percent to $0.9 billion).
Services investment also expanded, rising 6.8 percent year-on-year to $19.1 billion, supported by increased investment in AI data centers and online platforms. Growth was concentrated in distribution (up 71.0 percent to $2.9 billion), information and communications (up 9.2 percent to $2.3 billion), and research and development, professional, and scientific services (up 43.6 percent to $2.0 billion), while finance and insurance recorded a decline (down 10.6 percent to $7.5 billion).
By source country, investment from the United States expanded mainly in metals, distribution, and information and communications, reaching $9.8 billion, up 86.6 percent year-on-year. Investment from the European Union increased to $6.9 billion (up 35.7 percent), driven largely by chemicals and distribution. In contrast, investment from Japan declined 28.1 percent to $4.4 billion, while investment from China fell 38.0 percent to $3.6 billion.
Building on the momentum from last year’s strong performance, MOTIR will expand incentives for foreign investment linked to regional development in 2026, actively identify and improve unreasonable regulations affecting foreign-invested companies, and continue efforts to create a more predictable and stable investment environment.