Despite the impact of COVID-19, South Korea retained all-time high FDI inflows in 2021. In January 2022, the Ministry of Trade, Industry, and Energy of Korea announced that the country’s export and FDI inflow figures recorded an all-time high in 2021.
The amount of foreign direct investment attracted into Korea in 2021 stood at USD 29.5 billion, reaching an all-time high. In 2020, Korea’s FDI decreased by just 11 percent even as global FDI decreased by 42 percent, and then it bounced back with a 43 percent increase in 2021. Korea’s FDI inflows have surpassed 20 billion dollars annually for 7 consecutive years.
The service sector made up 79.9 percent of all investment, followed by the manufacturing sector with 17.0 percent. FDI in the service sector increased remarkably due to the increase of FDI in ICT(317.2%↑) and distribution (139.1%↑). Continued investment in platform services such as O2O (Offline to Online) and e-commerce leaded FDI growth in the ICT industry. Due to the movement restrictions around the world stemming from the COVID-19 pandemic, investment in the manufacturing sector slightly decreased. But the increase in FDI in the semiconductor (81.8%↑) and steel (77.2%↑) manufacturing industries are notable.
Regional Analysis of 2021 FDI inflows:
In 2021, among Korea’s total FDI inflows, FDI from Europe took up the largest proportion, followed by Asia and the Americas. The amount of investment coming from the Americas in 2021 decreased a little year-on-year, whereas the investment amounts from Europe and Asia have increased remarkably.
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*This article is extracted from Invest KOREA Magazine, February 2022.
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