South Korea Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in South Korea, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Defense Procurement

Defense procurement is an active part of CS Korea’s portfolio. U.S. companies which sell both to the U.S. government and foreign governments should be cognizant of the importance given to military procurement in the Republic of Korea (ROK).

The Defense Acquisition Program Administration (DAPA) is the primary agency responsible for the ROK’s defense procurement and was established to ensure transparency in the overall acquisition process. Defense products and equipment are acquired through a sophisticated procurement system which may involve direct purchases, sales agents, and importer channels. U.S. manufacturers or suppliers of defense equipment should vet and utilize a qualified local Korean company or agent that is familiar with the ROK’s defense procurement system, well-connected with the key members of the military service, and has ample knowledge about the operations of the ROK Army, ROK Navy and ROK Air Force.

Through a Gold Key Service or an International Partner Search, CS Korea is able to help U.S. defense companies identify a well-qualified potential representative. In general, former (or retired) ROK Air Force, ROK Navy, and ROK Army officials have good potential to serve as a commissioned representative in Korea. To supply defense products and services to the ROK’s military end-users, local representatives must first register themselves and be certified by DAPA.

A well-selected agent or representative should be able to provide the U.S. supplier or manufacturer with information about procurement plans as well as the status of their defense bids. Since the state of ROK’s defense community is highly mature, U.S. defense suppliers should only consider this market if they have a proven track record in the U.S. and/or in other Tier I countries.

U.S. companies seeking to supply their products or systems to the ROK military are required to register with DAPA. For more information on the registration and bidding process, please refer to DAPA’s website.

Financing of Projects

Project financing (PF) is designed to facilitate the funding of large-scale projects. The concept was first introduced in Korea to finance a highway construction project between Seoul and the Incheon International Airport. The government’s decision to introduce this financing technique was prompted by the need to boost domestic demand by stimulating investments in large-scale projects including housing construction and social infrastructure facilities.

Most of Korea’s social overhead capital (SOC) projects are funded through PF. PF is also used to finance private sector projects including real estate development and buy-outs of financially troubled companies. Several Korean and foreign banks provide PF and offer venture capital investment programs for social infrastructure projects, private projects, and SMEs in Korea. These banks support companies through direct equity investments although domestic companies generally have access to local funding and to informal and secondary financial markets charging higher interest rates. Debentures are also used as a financing alternative and often provide a competitive edge over traditional bank financing for highly rated firms.

Financing in the form of long-term debt is available from the Korea Development Bank (KDB) which is a state-owned policy bank founded in 1954. KDB plays a pivotal role in corporate banking and restructuring, investment banking, project financing and financial consultation in Korean markets. The Korean government fully owns KDB and is legally obliged to replenish capital should KDB’s reserves be insufficient.

The state-run Export-Import Bank of Korea (KEXIM) serves as Korea’s official export credit agency providing export credits, guarantees, insurance, and structured financing to support Korean companies participating in overseas projects often as part of international consortia. In 2026 KEXIM announced a five-year financing commitment of approximately KRW 100 trillion (approximately USD 70 billion) through 2030 to support strategic export sectors such as nuclear power, defense, and major infrastructure. KEXIM has also expanded its policy focus to strengthen supply chain resilience and industrial security including financing support for critical minerals, energy infrastructure, and renewable energy projects abroad. Recent international projects include:

  • $300 million co-financing agreement with the Inter-American Development Bank to support infrastructure projects across Latin America and the Caribbean via Korea’s Economic Development Promotion Facility (2024)
  • $241 million project financing agreement for the construction of a solar power plant and battery energy storage system in Guam led by a Korean consortium (2025)
  • $1.5 billion global bond issuance by KEXIM to raise funding for its overall export and project finance activities (2025)

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