Foreign Ownership Limits on Korean Stocks: Which Companies Are Capped

Foreign investors can buy most Korean stocks without limit, but a few dozen carry a legal cap on how much foreigners may own in total. Once a cap fills up, foreigners cannot buy more. As of January 2023, the Financial Services Commission (FSC), Korea's financial regulator, counted such limits on 33 stocks in key industries among 2,500 listed companies.

The capped group includes Korea's three telecom companies, SK Telecom, KT and LG Uplus, along with Korea Electric Power Corp. (KEPCO) and a number of broadcasters. Airlines face a similar ownership test. At KT, foreigners held all 123,490,626 shares the law allows them, 49% of its 252,021,685 listed shares, "making additional purchases impossible," the Asia Business Daily reported on Dec. 26, 2025.

Korea opened its stock market to foreigners in 1992 with a 10% cap on total foreign ownership of each stock and a 3% cap per investor, the FSC said. It abolished the limits for ordinary companies in 1998. What remains are sector rules written into separate laws.

Here's what you need to know.

Which Korean Stocks Have Foreign Ownership Limits?

The table lists the main caps, the laws behind them and the companies that filings or news reports name under each one. The percentages limit the combined holdings of all foreign investors in a company.

Facilities-based telecom carriers, those that own network lines and meet criteria set by presidential decree, fall under Article 8 of the Telecommunications Business Act. Foreign governments and foreigners together may hold no more than 49% of such a carrier's shares, a count that includes depositary receipts but leaves out non-voting shares. In March 2023, KED Global counted six operators under the cap, including SK Telecom, KT and LG Uplus.

KEPCO falls under a separate rule for public corporations, described in its annual report filed with the U.S. Securities and Exchange Commission (SEC) in April 2021. Designated public corporations such as KEPCO "are subject to a 40% ceiling on acquisitions of shares by foreigners in the aggregate," the report said. KED Global reported the same 40% figure in March 2023, along with a 30% limit for Korea Gas Corp. (KOGAS).

The airline rule looks at who owns and who runs the carrier. The Aviation Business Act bars the transport minister from licensing domestic or international air services to anyone covered by Article 10 of the Aviation Safety Act.

That list includes companies in which foreigners own at least half of the shares or have substantial control. The same rules disqualify an airline that has a foreign national among its executive officers.

The rule has been applied before. In August 2018, the Ministry of Land, Infrastructure and Transport let Jin Air keep its airline license after it emerged that a U.S. citizen had served on its board from 2010 to 2016, the Korea JoongAng Daily reported. The ministry still barred the airline from adding routes or registering new aircraft until it fixed the problem.

Broadcasters face the most layers. Article 14 of the Broadcasting Act bars terrestrial broadcasters from taking any foreign investment. It caps general-programming channels and relay cable broadcasters at 20% and news channels at 10%, and allows up to 49% in cable TV operators, satellite broadcasters and other channels.

In March 2023, KED Global reported that the Broadcasting Act limits foreign ownership of 12 Korean companies, including CJ ENM, Hyundai Home Shopping Network and LG HelloVision, to 49%. It put the ceiling for YTN, a 24-hour news channel, at 10% and said SBS, KNN and TBC are off-limits to foreign ownership.

How Does the Foreign Ownership Exhaustion Rate Work?

Two figures show where a capped stock stands. The foreign ownership ratio is the share of all issued shares that foreigners hold. The exhaustion rate, the term Korean brokers use, is the share of the cap that foreigners have already filled.

KT shows the difference. With foreigners at the full 49% in December 2025, its exhaustion rate was 100%. Based on figures the Asia Business Daily reported the same month, LG Uplus, at 41.77% foreign ownership, had used about 85% of its 49% cap, and SK Telecom, at 36.11%, about 74%.

The numbers move with demand. KT's foreign stake rose from 42.5% in March 2023, as reported by KED Global, to the full 49% by December 2025. Over the same period, SK Telecom's fell from 43.1% to 36.11%.

The Korea Exchange (KRX) publishes the data in English on its KRX Data Marketplace website. The pages sit under Statistics, Basic Data, Stock and Details, labeled "Foreign ownership" and "Foreign ownership by issue," and a ranking sits under Market Activity, Ranking, Stock and "Foreign ownership."

What Happens When a Stock Hits Its Foreign Limit?

New foreign buy orders stop. For the restricted stocks, authorities "can still monitor on a real-time basis and prevent orders surpassing those limits before they take place," the FSC said in January 2023. The check runs through the Foreign Investment Management System (FIMS), which records foreign trades in real time.

Shares bought above the telecom cap lose their vote. Under Article 12 of the Telecommunications Business Act, a foreign holder cannot vote shares above the 49% limit, and the carrier may refuse to record them in its shareholder register. The Ministry of Science and ICT may also order the breach fixed within up to six months.

The carrier can be punished too. If a corrective order is not met, the ministry may revoke the carrier's license or suspend its business, SK Telecom said in its April 2021 SEC filing. Where a suspension would hurt customers or the public interest, the ministry can instead impose a penalty of up to 3% of the carrier's average annual revenue over the previous three years.

This has happened before. SK Telecom exceeded the foreign ownership limit in 1999 and was fined by the Ministry of Information and Communication, the Asia Business Daily reported.

A full cap can also tie a company's hands. For a stock already at its cap, cancelling treasury shares, stock a company has bought back, shrinks the share count and pushes the foreign ratio above the legal limit. That is why KT cannot immediately cancel its treasury shares, the Asia Business Daily reported in December 2025.

Index funds feel the cap as well. MSCI, the index provider, adjusts how much of a stock it includes as the room left for foreigners under the cap is used up, the outlet reported.

"If the foreign ownership ratio exceeds 47.29%, the stock becomes subject to exclusion," Lee Seungwoong, a researcher at Yuanta Securities, said, as translated by the Asia Business Daily. He added that LG Uplus had entered MSCI's reduction range in December 2025.

Can a Korean Company Count as a Foreign Investor?

Yes, and the telecom law spells it out most clearly. Under Article 8 of the Telecommunications Business Act, a Korean company counts as foreign if its largest shareholder is a foreign government or foreigner holding at least 15% of its shares. The law calls it a "corporation deemed a foreign person," and its stake in a carrier counts toward the 49% cap.

The law exempts companies that hold less than 1% of a carrier and some that pass a government public interest review. The Broadcasting Act has a similar rule for corporations whose foreign ownership exceeds a ratio set by presidential decree.

SK Telecom showed what the telecom rule could mean in its April 2021 filing. Its parent, SK Inc., owned 26.8% of SK Telecom as of Dec. 31, 2020. SK Telecom said that if a foreign shareholder became SK Inc.'s largest shareholder with 15% or more, its own foreign ownership of 33.4% would reach 60.2%.

SK Inc. would then lose the vote on shares above the ceiling, which "may result in a change in control of us," SK Telecom said. As of Dec. 31, 2020, the two largest foreign shareholders of SK Inc. each held 3.9% of it.

Simply put, the telecom cap looks through Korean companies to their largest shareholders, so a change in who owns a parent company could push a carrier over 49% even if no shares of the carrier change hands.

How Do Legal Caps Differ From Company Limits?

A legal cap is set by statute and applies to foreigners as a group. A company limit is written into a company's articles of incorporation and can apply to every shareholder, Korean or foreign.

KEPCO has both. On top of the 40% ceiling on foreigners, its articles "set a 3% ceiling on acquisition by a single investor (whether domestic or foreign)," KEPCO said in its 2021 filing, and shares above that ceiling carry no vote. The rule was still in Article 12 of the articles as amended on April 8, 2026, which exempts the government and KEPCO's employee stock ownership association.

The government must also own at least 51% of KEPCO, directly or indirectly, under Korean law, including the KEPCO Act, the company said in the same filing.

KT is the opposite case. The main text of its articles of incorporation, as amended on March 31, 2026, sets no ceiling on holdings by foreigners or by any single shareholder, and its 49% cap comes from the telecom law.

For most companies, there is no legal cap at all. Under the Capital Markets Act, "with certain exceptions, a foreign investor may acquire shares of a Korean company without being subject to any single or aggregate foreign investment ceiling," KEPCO's 2021 filing said.

What Should Foreign Investors Watch?

Omnibus accounts. Buying through an overseas broker's omnibus account is still foreign investment, so the same caps apply. The FSC said in February 2016 that the main purpose of foreign investor registration was to monitor foreign capital and "manage foreign investment limit in certain public-purpose companies." In January 2023, it said authorities would keep managing the maximum investment limit for foreign investors once registration was scrapped.

Reform talk. In March 2023, the government began reviewing whether to remove or relax the limits on 33 companies in telecom, aviation, broadcasting, newspaper and other key industries, according to finance ministry officials cited by KED Global. KED Global noted that MSCI had cited foreign ownership limits among its reasons for not raising Korea to developed-market status. The telecom cap still stood at 49% in December 2025, according to the Asia Business Daily.

Dated figures. The ownership numbers in this article come from filings and reports published between April 2021 and December 2025. Foreign stakes shift as shares change hands, so the KRX pages are the place to check how much room a capped stock has left.

Together, these laws put a ceiling on foreign demand for a small group of Korean stocks, so for KT, KEPCO or a broadcaster, the foreign ownership figure matters alongside the share price.