South Korea Secures $250 Million Investment from Four European Companies

South Korea has secured a total investment of 250 billion won ($250 million) from four advanced European companies during President Yoon Suk Yeol's visit to the European Union (EU) on June 10.

The visit also resulted in the official signing of a Digital Trade Agreement (DTA) between the two parties, marking significant cooperation in trade, investment, and digital sectors.

This is the first visit by a South Korean president to the EU in nearly eight years. The EU is the world's largest trading bloc and South Korea's third-largest trading partner, comprising 27 member countries and a population of 450 million, with a GDP of 18 trillion euros.

The Ministry of Trade, Industry and Energy, in collaboration with KOTRA, held an 'Investment Declaration Ceremony for Europe' and a 'European Investment Roundtable' to discuss expanding investments from European companies in South Korea and future cooperation directions.

During the investment declaration ceremony, Minister Kim Jeong-kwan announced that four European companies reported a total of $165 million in foreign direct investment.

German advanced materials company Orafol plans to expand the factory of a South Korean company it acquired last year in the reflective film sector. By combining Orafol's technology with the global network of South Korean companies exporting to over 80 countries, it aims to establish a hub for exporting reflective films to meet demand in the Asia-Pacific region.

French company Quandela, a leader in photonic-based quantum computing, intends to expand its research and development collaboration with South Korean academia and industry. This investment is expected to help develop South Korea as a research and manufacturing hub, accelerating the dissemination of quantum computing technology.

Dutch firm Prodrive Technologies plans to establish its first Korean subsidiary to import and sell equipment modules for advanced industries, including semiconductors. This move will expand its participation in South Korea's advanced industrial supply chain and may lead to the establishment of manufacturing bases and R&D centers in the future, depending on business outcomes.

Swedish company Mycronic, specializing in electronic components and display equipment, aims to use this investment to enhance technological innovation in display and semiconductor equipment from its research base in South Korea.

The European Investment Roundtable focused on exploring future investment cooperation with European investors.

Minister Kim Jeong-kwan stated, "South Korea's competitive advanced industrial supply chain and AI ecosystem will continue to provide new cooperation opportunities for European companies. We will actively support the expansion of foreign investment incentives and the improvement of the regulatory environment, ensuring that foreign companies' concerns are addressed promptly during the investment process in South Korea."

During the summit, Kim Jeong-kwan and EU Commissioner for Trade and Economic Security Valdis Dombrovskis formally signed the Korea-EU DTA in the presence of both leaders.

The Korea-EU DTA is the second bilateral digital trade agreement South Korea has signed, following Singapore, and the first with one of its top five trading partners.

This agreement expands the traditional trade relationship, established under the Korea-EU Free Trade Agreement (FTA) that took effect in 2011, into the digital realm, providing a framework to respond to the rapidly changing digital trade environment.

The DTA consists of 42 independent provisions, and negotiations began in October 2023, culminating in a declaration of conclusion in March 2025 after seven rounds of official talks.

Key provisions of the DTA prohibit the localization of computing facilities and data, allowing South Korean companies to process data collected in the EU on domestic servers without the need to establish local data centers.

Additionally, the agreement ensures that companies' source codes, considered vital assets and trade secrets, are protected by prohibiting requirements for source code transfer or access as a condition for software import, export, distribution, or sale.

The DTA also addresses consumer protection by establishing measures to prevent fraud during e-commerce activities on EU platforms and ensuring appropriate remedies for consumers.

It strengthens consumer rights by allowing individuals to refuse or consent to receiving spam messages from EU-based e-commerce companies and senders.

The agreement recognizes the legal validity of electronic signatures and certifications, encourages the use of data-based documents instead of paper in import and export processes, and aims to streamline administrative and customs procedures by electronically receiving various required documents and data through a single window.

During the Korea-EU summit, both sides agreed to broadly develop their strategic partnership in security and economic areas.

President Yoon stated during the joint press conference at the EU Council headquarters in Brussels, "We have decided to initiate negotiations for a 'Confidential Information Protection Agreement' to strengthen our security and defense cooperation. I hope this agreement is concluded swiftly so that both sides can safely share sensitive information and actively engage in industrial and research collaboration." The push for the Korea-EU Confidential Information Protection Agreement is a response to the increasing uncertainty in the international order and the need to closely link security in the Indo-Pacific region with European security.

In the economic sector, both parties reaffirmed their commitment to strengthening and reforming the World Trade Organization (WTO), the central axis of the multilateral trading system, while deepening bilateral cooperation in strategically important areas such as trade, investment, supply chains, digital technology, advanced technology, energy, and innovation.

The South Korean government expressed concerns regarding the EU's trade regulations, including steel tariff quotas (TRQ) and the Carbon Border Adjustment Mechanism (CBAM), and requested the easing of these regulations.

President Yoon remarked, "The EU is our third-largest trading partner after China and the United States and our number one investment partner. Through this agreement, we expect to establish a stable data business environment and further activate digital trade between both sides."

Regarding energy, both sides agreed to launch a high-level consultative body to coordinate cooperation in energy security, energy systems, and energy transition.