Korea's $350 Billion US Investment Act: 2026 Update

Quick answer

The Special Act on the Operation and Management of Strategic Investment between Korea and the United States passed the National Assembly on March 12, 2026 (Asia Economy) and took effect on June 18, 2026, when the Korea-U.S. Strategic Investment Corporation was launched (Herald Business). It implements the November 2025 MOU under which Korea committed $350 billion: $200 billion for strategic-sector projects (capped at $20 billion a year) and $150 billion for shipbuilding cooperation. On September 30, 2026 the two governments named the first project — a $22.3 billion gas-fired power plant in Texas (Korea Times). For foreign investors in Korea, it changes outbound capital flows and partnership opportunities, not Korean incorporation rules.

This post was first published on March 3, 2026, before the vote, and was updated on October 5, 2026 to reflect what happened.

Table of Contents

Timeline: How the Deal and the Act Came Together

What the Act Does

• Korea-U.S. Strategic Investment Corporation: a new public corporation, with government capital of about KRW 2 trillion, to carry out the government’s US investments (Asia Economy)
• Korea-U.S. Strategic Investment Fund: held within the corporation and financed by capital contributions, entrusted assets and special bonds
• Commercial reasonableness test: a project should go ahead only if expected distributions to Korea over its life cover principal and interest, with interest based on the 20-year US Treasury yield plus an agreed spread (Herald Business)
• Process and oversight: projects pass through a project management committee and an operating committee, are reported to the National Assembly and are consulted with the US side

Where the Money Is Going

First projects named on September 30, 2026 (Korea Times):

• Project Star — a $22.3 billion, 6,472 MW gas-fired combined-cycle plant in Encinal, Texas, supplying AI data centers and chip plants; first phase targeted for 2029, full operation 2032
• Project Power — a framework of up to $120 billion for eight nuclear reactors, including two APR1400 units
• Project North — an Alaska LNG pipeline and terminal, still subject to commercial review

The US side committed to keep tariffs on Korean goods at about 15% under the arrangement.

What Does This Mean for Foreign Investors in Korea?

1. Outbound Capital and Partnership Opportunities

The program channels Korean public capital into US energy, infrastructure and strategic industries, often alongside Korean companies. Foreign companies with US project experience or complementary technology may find partnership, supply or co-investment opportunities with Korean groups participating in these projects.

2. Korea Remains Focused on Inbound FDI

Outbound commitments have not reduced Korea’s push for inbound investment. FDI pledges to Korea hit a record $36.05 billion in 2025 and rose 9.1% in the first half of 2026 (see our FDI analysis), and incentives such as cash grants and Free Economic Zones remain available.

3. Regulatory and Tax Considerations

• Transfer pricing: transactions between Korean parents and US subsidiaries remain a scrutiny area
• Outbound investment reporting: Korean companies’ overseas direct investment must be reported under the Foreign Exchange Transactions Act
• US review: Korean investments in sensitive US sectors may face CFIUS review

Key Sectors to Watch

• Energy for AI: power generation for data centers is the first focus of the strategic program
• Nuclear: the Project Power framework could involve Korean nuclear suppliers and their supply chains
• Shipbuilding: the separate $150 billion cooperation track
• Semiconductors, critical minerals, AI and bio: listed among the strategic sectors for the $200 billion track

How to Position Your Business

For Foreign Investors Already in Korea

1. Identify Korean partners in energy, nuclear, shipbuilding and strategic industries that are participating in US projects
2. Offer US-side expertise: permitting, project development, distribution or compliance
3. Structure carefully: joint ventures and licensing need to work under both Korean and US rules, including export controls and investment screening

For Foreign Investors Considering Korea

1. Focus on sectors with Korea-US linkage: energy equipment, nuclear, shipbuilding, semiconductors, AI infrastructure
2. Use Korea’s inbound incentives: see our tax incentives guide

Risks and Considerations

• Project-by-project uncertainty: each project must pass the commercial reasonableness test and committee review; announced frameworks (such as Project Power) are not final investment decisions
• Trade policy shifts: tariff arrangements can change with US policy
• Political oversight: National Assembly reporting means projects can face public and political scrutiny

Conclusion

What was a pending bill in March 2026 is now law. The Special Act passed on March 12, took effect on June 18 with the launch of the Korea-U.S. Strategic Investment Corporation, and the first project — a Texas power plant — was named on September 30, 2026. For foreign investors, the practical opportunities lie in partnering with Korean groups on US projects while continuing to use Korea’s inbound investment incentives.

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Disclaimer: This article is for informational purposes only and does not constitute legal or investment advice. Consult with qualified professionals before making investment decisions.

Official Sources

For authoritative reference, consult the following Korean government portals:

• Invest Korea (KOTRA)
• KOTRA — Korea Trade-Investment Promotion Agency