ΆΓ  Foreigners to be allowed to swap IPRs for stakes

KoreaHerald 2000.10.07  

     The government will allow foreigners to acquire stakes in Korean firms by making non-cash investments such as intellectual property rights, local real estate and stocks from next year, the Ministry of Commerce, Industry and Energy said yesterday.

    The intellectual property rights include Internet contents, e-commerce skills, and business models (BM), the ministry said.

    Foreign direct investment has so far involved mainly capital goods such as cash and machines, and industrial property rights including patents, utility models and design rights.

    The ministry plans to revise the foreigners' investment promotion law by incorporating the measure.

    The revision, which should go into effect next year after approval by the National Assembly, paves the way for foreigners to invest directly through stock swaps with domestic startups.

    If foreigners swap their convertible bonds, depositary receipts, exchangeable bonds and bonds with warrants for domestic company shares, the swap will be recognized as a foreign direct investment eligible for such benefits as tax breaks and remittance guarantees.