South Korea is set to establish a special strategic investment corporation to manage its $350 billion investment pledge to the United States, formalizing an essential component of a bilateral trade deal finalized in late 2025. This corporation, provisionally named the Korea-U.S. Strategic Investment Corp., will operate a special fund dedicated to investing in advanced industries across the U.S., with government backing and oversight designed to ensure orderly deployment and adherence to agreed safeguards.
The $350 billion investment is divided into two main components: $200 billion in cash installments capped at $20 billion per year, and a separate $150 billion earmarked for bilateral cooperation in the shipbuilding industry. This agreement was finalized during a summit in Gyeongju between South Korean President Lee Jae Myung and U.S. President Donald Trump on October 29, 2025. The investment fund will be managed for up to 20 years under a special bill submitted by South Korea’s ruling Democratic Party to support these strategic plans.
The sources of financing for the fund include earnings from foreign exchange reserves held by the government and the Bank of Korea, as well as overseas issuance of government-guaranteed bonds. The special bill mandates compliance with safeguard measures such as the $20 billion annual cap and provisions allowing adjustments to the timing and amount of investments to prevent instability in South Korea’s foreign exchange markets.
A memorandum of understanding (MoU) signed electronically by South Korea’s Industry Minister Kim Jung-kwan and U.S. Commerce Secretary Howard Lutnick sets out the framework for oversight. It establishes two committees: a Consultation Committee headed by South Korea’s industry minister and an Investment Committee led by the U.S. commerce secretary.
These committees will oversee a Special Purpose Vehicle (SPV) formed by the U.S. side to manage joint projects, with smaller SPVs created for individual projects. Each project is encouraged to have a South Korean manager if feasible. The projects chosen for investment will be “commercially reasonable” and focus on advanced industries such as energy, semiconductors, pharmaceuticals, critical minerals, artificial intelligence, and quantum computing.
According to Minister Kim, U.S. authorities will prioritize South Korean firms when selecting vendors or suppliers for projects under the investment pledge. Additionally, the U.S. will present investment projects periodically for review by South Korea, which will then have 45 business days to commit funding decisions.
Source: Economymiddleeast
