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South Korea opens doors to inbound private equity investment

7 Mar 2014

South Korea is planning to relax regulations that restrict M&A activity, making it easier for groups such as private equity firms to invest in the country, according to the latest three-year plan for economic innovation launched by the country’s Ministry of Strategy and Finance.

Regulation will be eased at the fund creation and investment, management and sale stages of the M&A cycle, according to Deputy Prime Minister Hyun Oh-seok, alongside financial and tax incentives. Taxes for the merger of listed corporations will be reduced, while other regulations will also be eased.

The measures are intended promote business restructuring “according to regular market functions”, the Deputy Prime Minister said. “Korean economic dynamism will receive a boost as SMEs and venture startup investment grows,” he added.

According to Reuters, the easing of regulation is intended to help attract investment into local distressed opportunities in areas such as shipping, logistics and finance.

Private equity firms will now be able to invest in specific divisions of a company, as opposed to having to take a stake in the entire company. Overseas investment firms will also now be able to list on the Korean stock market.

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