Visa Policy Uncertainty and Its Impact on South Korean FDI in the U.S.

The United States' 2025 visa policy overhaul, driven by a “compliance-first” immigration strategy, has created a complex web of regulatory and geopolitical risks for South Korean foreign direct investment (FDI). While some sectors, such as healthcare, have benefited from targeted visa adjustments, others, including electric vehicles (EVs) and semiconductors, face heightened uncertainty. This analysis examines how these policy shifts intersect with broader geopolitical dynamics to shape South Korea's cross-border industrial investments.

Healthcare: A Relative Bright Spot

The E-2 treaty investor visa, traditionally a cornerstone for South Korean entrepreneurs, has seen a notable uptick in approvals for healthcare ventures. According to a report by the Korea TimesE-2 visa sees increased approval rates for South Korean entrepreneurs in the U.S. healthcare industry by 2025^[1], South Korean investors in U.S. healthcare—particularly in telemedicine and wearable health technologies—have experienced streamlined processing and higher approval rates in 2025. This aligns with U.S. efforts to attract foreign capital into strategic sectors, such as aging care and digital health. However, the broader immigration environment remains fraught. For instance, the proposed “strategic sector visa” for labor-starved industries like semiconductorsThe United States Needs a Strategic Sector Visa^[3] suggests a selective approach to foreign talent, which could indirectly affect healthcare innovation by diverting skilled workers to other sectors.

EVs: Workforce Compliance and Legal Risks

South Korean investments in the U.S. EV sector, particularly in manufacturing and battery production, have encountered significant headwinds. Reuters reported in September 2025 that South Korean workers at U.S. manufacturing sites faced detentions and legal scrutiny over visa complianceWorkers say Korea Inc was warned about questionable US visas before Hyundai raid^[2]. These incidents highlight the risks of navigating a regulatory landscape where minor infractions—such as delayed extensions or misclassified work permits—can trigger severe penalties. The U.S. Department of Homeland Security's proposed shift from “Duration of Status” to fixed admission periods for F-1 and J-1 visa holdersProposed Rule: Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Visa Holders^[4] further complicates workforce planning for South Korean firms reliant on temporary technical expertise.

Semiconductors: Trade Policy and Geopolitical Tensions

The semiconductor sector, a linchpin of South Korea-U.S. economic ties, faces dual pressures from U.S. visa policies and global trade dynamics. While the 2025 bond pilot program does not directly affect South Korean investors (as they remain in the Visa Waiver ProgramTraveling To The U.S.? New 'Visa Integrity Fee' Will Cost ...^[5]), the broader geopolitical context is more volatile. Treasury Secretary Scott Bessent's warnings about reinstating reciprocal tariffsTrump tariffs live updates: Bessent warns of massive refunds if...^[6] have raised concerns about potential disruptions to South Korean semiconductor exports. Additionally, U.S.-China tensions—exacerbated by Beijing's threats against entities complying with U.S. chip restrictionsSIA News Roundup^[7]—create a cascading risk for South Korean firms operating in both markets.

Broader Geopolitical and Regulatory Risks

The U.S. is increasingly leveraging immigration policy as a tool of geopolitical strategy, as noted by the Niskanen CenterDomestic debate, global strategy: Revisiting immigration in ...^[8]. For South Korea, this means navigating a regulatory environment where visa access is not just a bureaucratic hurdle but a political variable. The Trump administration's travel bans and the strategic sector visa proposalThe United States Needs a Strategic Sector Visa^[3] reflect a prioritization of national security and economic competitiveness over open immigration. South Korean firms must now weigh not only the cost of compliance but also the political risks of being perceived as “foreign” in sectors deemed critical to U.S. interests.

Conclusion: Balancing Opportunity and Risk

South Korean FDI in the U.S. remains a strategic imperative, but the 2025 visa policy changes underscore the need for nuanced risk assessment. While healthcare investments have found a temporary niche in the E-2 visa framework, the EV and semiconductor sectors face a more precarious path. Geopolitical tensions, coupled with U.S. regulatory shifts, demand that South Korean investors adopt agile strategies—diversifying workforces, securing legal safeguards, and engaging in diplomatic dialogue to mitigate policy-driven volatility.