FDI Totals US$11.086bn on Notification Basis in H1
The Ministry of Trade, Industry and Energy announced on Aug. 16 that foreign direct investments (FDI) in South Korea reached US$11.086 billion on notification basis in the first half of this year.
The investments include US$2.946 billion from the United States, followed by the Cayman Islands (US$1.546 billion), Singapore (US$1.39 billion), Japan (US$893 million), China (US$888 million), the Netherlands (US$731 million), Guatemala (US$571 million), Malta (US$264 million), the United Kingdom (US$244 million) and the Virgin Islands (US$221 million).
Of those regions, the Cayman Islands, Guatemala, Malta and the Virgin Islands are classified as tax havens with little trade with South Korea. For example, exports from South Korea to the Cayman Islands were US$2.84 million in the first half of this year, when the latter was the 184th-largest export destination for the former.
Money flow into South Korea through tax havens is continuing to increase. For instance, investment in South Korea from the Cayman Islands increased 25-fold as compared with 10 years ago. “In many cases, such money flow has to do with M&A,” the ministry explained, adding, “It is also true that the flow is more likely to be related to tax evasion and money laundering.”