The statistical data of a foreign investment shows that the foreign direct investment(FDI) is to be recently decreased while residents' outward direct investment increased. Nonetheless, the FDI's importance in our economy and industry can not be disregarded. Korea's policy for the FDI has been effective, but there is still much room for improvement, in promoting and developing a foreign investment into the country. The FDI has been facilitated by the Foreign Investment Promotion Act(FIPA) which was enacted in November 1998. The FDI under FIPA means a foreign investor’s acquisition of at least 10% of total issued shares of a domestic corporation, or a foreign investor’s acquisition of less than 10% of total issued shares of a domestic corporation accompanied by (i) a secondment of an executive to the domestic corporation or a contract granting such secondment right to the foreign investor, (ii) execution of a supply contract for raw materials or other products for a period of at least a year or more, or (iii) execution of a technology license contract or a joint development agreement. Under the FIPA, the FDI is available by a foreign investment by means of purchasing newly issued stocks, a foreign investment by means of purchasing existing stocks, acquisition of stocks by means of mergers, a foreign investment in form of long-term loan, or a foreign investment by contribution. Foreign direct investment incentives are as follows: tax holidays, special economic zones, investment financial subsidies, job training & employment subsidies, derogation from regulations, etc. In this regards, Korea invites a long term and stable foreign capital by the FDI for a national economy and employment, etc. A local government may also take similar advantages of the FDI for economic developments of local markets and industries. For this purpose, an international joint venture between Korean parties and foreign parties has become an increasingly popular means for the FDI. The definition of a joint venture is the contribution by two or more parties of tangible and intangible assets toward the mutual conduct of business activity in which the parties share in the management of the activity and the profit or loss from such activity. A joint venture becomes "international" when its target market includes a country which is a foreign market for at least one of its partners. The matters pertaining to a foreign individual or entity wishing to make the FDI in Korea and joint venture companies are primarily prescribed by the FIPA and the Commercial Law of Korea. In legal analysis, there are a few legal problems arising from an international joint venture agreement and a joint venture company. A joint venture agreement to set up a joint venture company may act as a shareholders' agreement. A shareholders' agreement may take a number of forms. In a joint venture agreement, the investors sign an agreement specifying that each of them would vote their shares as provided in the agreement. More often, the agreement can either specify the actual vote(i.e. the shareholders can agree to vote for a specific candidate for the board) or it can simply specify a procedure for determining how to vote, even other things such as operation of a joint venture company, etc. However, covenants in shareholders' agreement may not be valid under the Commercial Law of Korea because the Commercial Law governs a company independently of a joint venture agreement. These results may differ depending on cases. Additionally, there could be one more problem from dual positions of directors of a joint venture company. A director has an agent duty for shareholders who nominate him or her and a royal duty for a joint venture company. Without exceptions, A director's royal duty for the company prevails over its agent duty for his or her shareholders. In conclusion, it is essential that a series of regulations for the FDI should further ease off so that companies can invest in optimum locations and feel comfortable placing future capital within the country. Also, a local government keeps promoting foreign capital inducement by the form of a joint venture for local targeted purposes while the government as well as a joint venture company should pay attention to legal effects of the covenants from a joint venture agreement.