KOREAN NET

Nam Myung-woo, acting director general of the Ministry of Trade, Industry and Resources' Cross-border Investment Policy Bureau, on Jan. 7 holds a briefing on foreign direct investment last year at Government Complex-Sejong. (Ministry of Trade, Industry and Energy)

By Charles Audouin

Foreign direct investment (FDI) last year set a record with USD 36.05 billion, up 4.3% from that in 2024.

The Ministry of Trade, Industry and Resources on Jan. 7 released a report on 2025 FDI trends showing that inflows rose for the fifth consecutive year since 2021. The investment amount executed or arriving jumped 16.3% year on year to USD 17.95 billion, the third highest in history and punctuating rising trust in the Korean market by global capital.

By source, investment from the U.S. surged 86.6% to USD 9.77 billion led by metals, distribution, and information and communications technology. The European Union invested USD 6.92 billion, a 35.7% jump, led by chemicals and distribution.

Manufacturing and services saw the largest investment among sectors, with the former getting 15.77 billion, marking an 8.8% increase. Chemicals received USD 5.81 billion, up 99.5%, and metals USD 2.74 billion, a staggering jump of 272.2%.

The ministry said this resulted from "an effort to strengthen supply chains in response to external uncertainty."

FDI in the service industry rose 6.8% to USD 19.05 billion. Driven by higher investment in areas such as artificial intelligence (AI) data centers and online platforms, such growth was primarily driven by sectors such as distribution (up 71%), information and communications technology, which rose 9.2% to USD 2.34 billion, and research and development, professional services, and science and technology, which grew 43.6% to USD 1.97 billion.

Greenfield investment, or the building of new operations, facilities or subsidiary from the ground up in a foreign country, reached a record-high USD 28.59 billion, up 7.1%.

"Since the launch of the new administration, higher trust and alleviation of uncertainty in the Korean economy and industry overall have led to the positive result of improved investment sentiment," the ministry said. "The verdict is that the government's drive toward AI policy and aggressive investment attraction on the occasion of the country's hosting of the Asia-Pacific Economic Cooperation forum last year was effective."

caudouin@korea.kr