[JIPYONG LLC] Korea Legal Insight (October 20, 2025)

KOREA LEGAL INSIGHT
From Liberalization to Security: Korea’s FIPA Discussions and Their Impact on Foreign Investment
October 20, 2025

On May 2, 2025, an amendment to the Foreign Investment Promotion Act (FIPA) was introduced before the National Assembly. The bill was referred to the Standing Committee on Industry, Trade and Energy for review on September 2, 2025 and seeks to establish a clear legal foundation for screening foreign investments for national security purposes, aligning Korea with comparable regulatory frameworks in the United States (CFIUS), the European Union (FDI Screening Regulation), and Japan (Foreign Exchange and Foreign Trade Act).

The proposed amendment marks a notable shift from Korea’s traditionally open investment regime toward a more security-focused framework. While intended to safeguard national interests, the provisions are expected to have substantial implications for foreign private equity funds (PEFs) and cross-border M&A transactions involving Korean entities.

Transitioning to a National-Security-Focused Investment Regime
A.	Explicit Statutory Basis for Security Review
B.	Expansion of “Foreign Investment” to Indirect Control
C.	Creation of a Specialized Security Review Sub-Committee

KLI Editors

Jinhee KIM

Andrew J. PARK

Sanghee LEE

Seung Min LEE

26F, Grand Central A, 14 Sejong-daero, Jung-gu, Seoul T. +82-2-6200-1600 E. master@jipyong.com

Subscribe | Unsubscribe

This message was prepared for our clients for the purpose of providing real-time updates on general legal information only, and should not be relied on as legal advice or the opinion of the firm. Please contact the relevant authors for further information regarding an article's contents.

View Web