South Korea Strengthens Investment Immigration Visa Program 2023

Growing Controversy Sparks Changes to South Korea’s Investment Immigration Visa Program

The South Korean government is taking steps to address the increasing controversy surrounding foreigners who abuse their residency status in order to access the country’s social benefits, particularly its universal health insurance program. In response, the Ministry of Justice has announced significant changes to the minimum requirements for the country’s investment immigration visa program.

Stricter Korea Immigrant Investor Scheme Criteria

To prevent further exploitation of the system, the required investment for obtaining the residence visa F-2 and permanent residence visa F-5 will be significantly increased. The minimum investment for the F-2 visa will be tripled to 1.5 billion won ($1.1 million), while the F-5 visa will require a doubled investment of 3.0 billion won. These changes aim to ensure that only genuine investors are granted long-term residency in South Korea.

Retirement Visa Program Eliminated

Additionally, the government has made the decision to entirely abolish the foreign retiree’s immigrant investor visa program. Under the current system, retiree investors aged 55 or above can obtain Korean residency status through an investment of 300 million won for the F-2 visa, and maintaining the initial investment for five or more years to be eligible for the F-5 visa. However, this program will be discontinued, signaling a shift in the government’s approach to immigration and residency.

Addressing Concerns

This marks the first time that the Korean government has amended the requirements for the country’s public business investment immigration visa program since its launch in 2013. The aim of the Immigrant Investor Scheme for Public Business (IISPB) was to attract investments that would contribute to the country’s economy. However, the program has faced criticism due to its comparatively low investment requirements for obtaining Korean residency, which has resulted in unintended consequences.

Comparative Analysis

When compared to other countries, South Korea’s investment requirements for residency are significantly lower. In the United States, for example, foreigners are required to invest approximately 1.3 billion won in a commercial enterprise and create a minimum of 10 permanent full-time jobs for qualified US workers to be eligible for lawful permanent residence. Similarly, countries like Australia, Portugal, and New Zealand require investments of approximately 1.2 billion won, 2.0 billion won, and 4.0 billion won, respectively, for resident visas. In contrast, South Korea currently only requires a 500 million won investment for a resident visa and 1.5 billion won for a permanent resident visa.

Preventing Exploitation

The lower investment barriers in South Korea’s investment immigrant visa program have been accused of enabling certain foreigners to take advantage of the program and access the country’s generous social benefits, particularly the universal health insurance system, without actually residing in Korea. Recent data from Korea’s National Health Insurance Service (NHIS) reveals that in 2022, the national health insurance coverage balance for Chinese nationals recorded a deficit of 22.9 billion won, while the total healthcare coverage balance for all foreign subscribers reached a surplus of 556 billion won during the same period.

Visa Benefits

Both the F-2 and F-5 visas not only grant status to investors but also extend the same privileges to their spouses, unmarried children, and even parents living outside of Korea. This has raised concerns about the potential misuse of the visa system and access to Korea’s state health insurance program.

Strengthening Regulations

The Ministry of Justice has taken steps to address these concerns. Last month, it doubled the minimum investment requirement for the country’s resident visa under the real estate investment immigration scheme to 1 billion won or more.

This change was made with the aim of preventing foreigners from exploiting the program to gain easy access to the country’s social benefits without actually residing in South Korea. The real estate investment immigration system, introduced in 2010, initially allowed foreigners to obtain Korea’s F-2 resident visa with an investment of 500 million won or more in the country’s condominiums or other resort facilities in designated areas nationwide.

After maintaining the investment for five years or more, they would become eligible to apply for the F-5 permanent resident visa. The goal of this system was to encourage foreign investment and stimulate the local economy.

Focus on Economic Growth

The investment immigration fund for public business under the IISPB program is currently managed by the Korea Development Bank. It provides loans to the country’s small and medium-sized enterprises and smart factories at low interest rates. This strategic approach aims to bolster South Korea’s Fourth Industrial Revolution, promote job creation, and drive economic growth.

By implementing stricter requirements for the investment immigration visa program, South Korea aims to ensure that the program serves its intended purpose while preventing exploitation and misuse. These changes will contribute to maintaining the integrity of the immigration system and safeguarding the country’s social benefits for those who genuinely contribute to its economy.

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