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2025 AI Governance in Korea: Strategic Investments and Regulatory Reforms

2025.07.21

Introduction 
 
The Lee Jae-myung administration announced a national strategy to position South Korea among the world's top three artificial intelligence (AI) economies.1)  Central to this initiative is a five-year investment plan totaling KRW 100 trillion, comprising KRW 30 trillion in national government expenditure, KRW 5 trillion in local government funding, and KRW 65 trillion from private sector sources.  This comprehensive approach reflects the government's commitment to establishing a stable ecosystem for AI development under a unified national agenda.2) 
 
 
1. Governance Reform and Strategic Planning 
 
The administration has implemented significant restructuring of AI governance to accelerate innovation and foster strategic growth at the highest levels of government.  Notably, seasoned AI experts have been appointed to key positions, including the Chief Presidential Secretary for AI Future Planning and the Minister and 2nd Vice Minister of Science and ICT.  These appointments reflect a deliberate strategy to integrate AI policy into public administration and to leverage internationally recognized expertise, as evidenced by Korea's inclusion in prominent global assessments such as Stanford University's '2025 AI Index'. 
 
 
2. The Framework Act on the Promotion and Regulation of Artificial Intelligence Act 
 
In December 2024, Korea enacted the Framework Act on the Promotion and Regulation of Artificial Intelligence (the "AI Basic Act"), which will be fully enforced beginning January 2026.  The AI Basic Act establishes a statutory foundation for AI governance and introduces a risk-based regulatory model that distinguishes between "high-impact AI" and "generative AI" systems.  The Act imposes specific transparency obligations, safety protocols, and oversight requirements on developers and operators of AI systems.  For example, developers of high-impact AI-defined to include systems used in medical diagnostics, public resource allocation, and biometric surveillance-are required to conduct risk assessments and implement user safeguards.  The Ministry of Science and ICT, together with the National AI Committee, is expected to issue detailed enforcement ordinances in 2025 to clarify the AI Basic Act's scope and technical requirements.3)  
 
 
3. Public Finance Instruments for AI Commercialization 
 
A key component of the new AI strategy is the targeted mobilization of financial resources to accelerate commercialization and global integration of AI technologies.  In July 2024, the government launched a KRW 3.5 trillion AI policy finance initiative to support companies operating in strategic technology sectors, including AI model development, autonomous systems, and cloud platforms.4)  This program offers preferential interest rates-reportedly up to 1.2% lower than average-and is closely aligned with the broader "Super Gap Industries Program," which provides multi-year financial and operational support to high-potential firms to drive technological advancement.5) 
 
 
4. Visa Reforms to Facilitate Foreign Participation 
 
To encourage foreign participation in Korea's AI and startup sectors, the government introduced the "Startup Korea" Visa in November 2024, following the opening of the Global Startup Center in Seoul.  Unlike previous startup visas, which emphasized academic qualifications or intellectual property ownership, the new visa streamlines the process into two stages: recommendation by the Ministry of SMEs and Startups, followed by final approval from the Ministry of Justice.  This reform simplifies prior pathways, such as the D-8-4 visa, which previously required participation in government-backed programs or top-tier placement in the K-Startup Grand Challenge.6)  
 
In addition to the new visa, the following D-8 visa categories remain relevant for foreign investors and technology entrepreneurs:7)  
 
<table cellpadding="8px" style="width:100%; text-align:center; border:1px solid #bbb; border-collapse:collapse;" width="100%">
	<tbody>
		<tr>
			<td style="border: 1px solid rgb(187, 187, 187); background-color: rgb(242, 242, 242);border-top: 2px solid #cc0000; ;padding-right: 12px; padding-left: 12px;" valign="middle" width="13%">Visa Type</td>
			<td style="border: 1px solid rgb(187, 187, 187); background-color: rgb(242, 242, 242);border-top: 2px solid #cc0000; ;padding-right: 12px; padding-left: 12px;" valign="middle" width="30%">Description</td>
			<td style="border: 1px solid rgb(187, 187, 187); background-color: rgb(242, 242, 242);border-top: 2px solid #cc0000; ;padding-right: 12px; padding-left: 12px;" valign="middle" width="57%">Key Requirements</td>
		</tr>
		<tr>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; font-size: 16px; line-height: 25px;">D-8-1</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; font-size: 16px; line-height: 25px; text-align: left;">General Investor Visa</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: middle;font-size:16px; line-height: 25px">Requires investment in a Korean corporation of at least KRW 100 million and a minimum 10% equity stake</td>
		</tr>
		<tr>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; font-size: 16px; line-height: 25px;">D-8-2</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: center;font-size:16px;line-height: 25px">Venture Company Founder</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: middle;font-size:16px; line-height: 25px">Available to founders of certified Korean venture or pre-venture companies</td>
		</tr>
		<tr>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; font-size: 16px; line-height: 25px;">D-8-3</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: center;font-size:16px;line-height: 25px">Foreign Investor in a Korean-Run Company</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: middle;font-size:16px; line-height: 25px">For investors in Korean-run business with joint representation</td>
		</tr>
		<tr>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; font-size: 16px; line-height: 25px;">D-8-4</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; vertical-align: center;font-size:16px;line-height: 25px">Tech-Based Entrepreneur</td>
			<td style="border: 1px solid rgb(187, 187, 187); padding-right: 12px; padding-left: 12px; text-align: left; ; vertical-align: middle;font-size:16px; line-height: 25px">Requires a relevant academic degree and a recommendation letter from the head of the educational institution</td>
		</tr>
	</tbody>
</table>
 
 
Conclusion 
 
Korea's AI policy framework today builds on several years of planning and investment, which are now being backed by formal legislation and clearer implementation.  The government has introduced structured support for AI commercialization, infrastructure, and international cooperation under the AI Basic Act.  Earlier visa and investment reforms-such as the Startup Korea Special Visa and expanded investor visa options-are now fully in effect, lowering entry barriers for foreign professionals and startups in the tech sector.  As regulations and support systems continue to evolve, it is important for foreign businesses and investors to seek legal advice when entering Korea's growing AI market.

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<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">1) “Lee Jae-myung Prioritizes Economic Recovery and AI Investment for ‘Better Future for Everyone,’” The Chosun Ilbo (June 4, 2025), available at  <a href="https://biz.chosun.com/en/en-policy/2025/06/04/2WNGIZPYCFC3BHVZCBZZKPFNHU/">https://biz.chosun.com/en/en-policy/2025/06/04/2WNGIZPYCFC3BHVZCBZZKPFNHU/</a></div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">2) “President Lee Jae myung Sets Ambitious AI Agenda, Pledges Free …,” Meta Journal News (June 2025), available at  <a href="https://www.metajournal.news/news/articleView.html?idxno=26676">https://www.metajournal.news/news/articleView.html?idxno=26676</a></div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">3) Jipyong LLC, A Blueprint for AI Governance: Understanding Korea’s AI Framework Act, Jipyong.com (March 4, 2025), available at  <a href="https://www.jipyong.com/en/board/jipyongNews_post.php?seq=6816">https://www.jipyong.com/en/board/jipyongNews_post.php?seq=6816</a></div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">4) Financial Services Commission, Establishment of KRW 3.5 Trillion AI Policy Finance Program and Strengthened Support for AI Sectors Including Cloud, Robotics, and Autonomous Driving (July 2024)</div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">5) Na-eun Park, Government to Provide ₩3.5 Trillion in Funding for AI Development, Including ₩3 Trillion in Low Interest Loans, Maeil Business Korea (July 4, 2024), available at  <a href="https://www.mk.co.kr/en/economy/11058818">https://www.mk.co.kr/en/economy/11058818</a></div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">6) Ministry of SMEs and Startups, Introduction of the “Startup Korea Special Visa” to Attract Promising Foreign Startups (Nov. 6, 2024), available at  <a href="https://www.mss.go.kr/site/smba/ex/bbs/View.do?cbIdx=86&bcIdx=1054402">https://www.mss.go.kr/site/smba/ex/bbs/View.do?cbIdx=86&bcIdx=1054402</a></div>

<div style="margin-bottom: 8px; font-size: 16px; line-height: normal;">7) Consulate General of the Republic of Korea in Kobe, Japan, Visa Issuance Guidelines for Enterprise Investment (D‑8 Visa) (Aug. 25, 2022), available at  <a href="https://overseas.mofa.go.kr/jp-kobe-ko/brd/m_44/view.do?seq=1025258">https://overseas.mofa.go.kr/jp-kobe-ko/brd/m_44/view.do?seq=1025258</a></div>

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