Korea's strategy for capital market development centers on two interrelated policy initiatives, namely market liberalization and market augmentation. Capital market liberalization will directly increase Korea's access to foreign capital and technology, while market augmentation will improve the operational efficiency of the capital market.

Significant progress has already been realized in the implementation of measures to further open the Korean capital market and reduce barriers to portfolio and direct investment. Foreign investment is now liberalized for all industries, except for those involving national security concerns and cultural considerations such as the mass media.

Foreigners are treated equally with Korean nationals when purchasing land for business purposes as well as non-business purposes. All limits on foreign investment in the local bond and money market have already been eliminated, as has the ceiling on foreign investment in the stock market. Foreign banks and securities companies are also allowed to establish local subsidiaries.

As of May 25, 1998, foreign investors have been able to buy shares of any Korean firm without consent of the board of directors or governmental approval, except for defense industry companies and public corporations. Foreigners can now purchase up to 50 percent of the outstanding shares of some public corporations.

All types of takeovers, including hostile acquisitions of Korean corporations, are permitted by both domestic and foreign investors. Furthermore, foreign exchange transactions will be authorized for all financial institutions meeting certain requirements.

In May 1998, the aggregate ceiling on foreign investment in Korean equities was abolished.

As of 2006, Korean treasury bonds carried 3-, 5-, 10- and 20-year maturities. The Government will make further efforts to enlarge the depth and width of the treasury bond market by promoting the long-term TB market.

Korea has also developed an institutional framework for mutual funds so that these funds can function as a key instrument for long-term financing. Private investors, both domestic and foreign, are now allowed to easily establish mutual funds in Korea. No qualification requirements are being imposed on investors who are sponsoring new mutual funds, with only minor standard exceptions. In essence, equal treatment has been guaranteed.