Korea's direct investment in U.S. hits 35-year high thanks to incentives

Overseas direct investment by Korean companies totaled $63.4 billion in 2023, with 43.7 percent directed toward the United States.

The percentage of Korea's overseas direct investment in the United States reached a 35-year high last year on the back of Washington's incentives for foreign investors, a report showed Monday.

Overseas direct investment by Korean companies totaled $63.4 billion in 2023, with 43.7 percent directed to the U.S., according to a report published by the Korea International Trade Association (KITA).

It is the highest U.S. share since 1998.

The Cayman Islands came in next with $6.2 billion, or 9.7 percent, followed by Luxembourg with $5 billion, or 7.8 percent, and Canada with $3.6 billion, or 5.7 percent.

China, which topped the table in the early 2000s, ranked seventh with $1.9 billion, the KITA report said.

The increase in Korean investment in the United States is attributed to various incentives offered by Washington, such as the CHIPS Act and the Inflation Reduction Act.

Korean companies, including major players like Samsung Electronics and LG Energy Solution, have announced plans to build facilities in Texas and Arizona, respectively.

As a result, Korea's share of cumulative foreign direct investment in the U.S. rose to around 2.3 percent between 2020 and 2022, up from 1 percent before 2010, according to the report.

The KITA report also showed local companies were operating a total of 2,432 businesses in the U.S. as of April, with 26.8 percent in manufacturing, 21.6 percent in wholesale and 16.8 percent in services and retail.

By state, 24.7 percent of these companies were located in California, 11.1 percent in Texas and 7.9 percent in New York.

Yonhap