South Korean financial companies’ overseas direct investment topped US$10 billion in less than three quarters this year. This year’s total is estimated at US$15 billion or more.
According to the Export-Import Bank of Korea, the overseas direct investment totaled US$3.85 billion in the third quarter alone and US$10.963 billion for the first nine months of this year with a year-on-year growth of 14%. The investment topped US$10 billion in 12 months last year, but the period has been shortened to nine months this year.
The investment has continued to increase since 2015 with South Korean financial companies increasing their investment in foreign funds and the like and entering more and more overseas markets. Specifically, the value, which was US$7.062 billion in 2015, rose to US$9.372 billion in 2016 and US$13.635 billion in 2017. In addition, they set up 156 corporations abroad this year alone.
By destination, their investment in the United States added up to US$3.468 billion at the end of the third quarter. It was followed by the Cayman Islands (US$2.017 billion) and Luxembourg (US$437 million). That in Luxembourg skyrocketed 866.4% from a year ago.
“The investment in offshore financial centers such as the Cayman Islands and Luxembourg is increasing at a rapid pace based on tax incentives and so on,” said an industry source, adding, “For example, the investment in the United States via the Cayman Islands increased a lot as in the case of that in China via Hong Kong and that in Europe via Luxembourg and the Virgin Islands.”