Hailey Hye-In Jin, Senior Attorney at Dentons Lee, contributed a column to Dealbook News in April 2025, offering insights into the legal structures and investment viability of international schools in Korea.

The article examines three distinct types of international schools under Korean law—foreign educational institutions, foreigners’ schools, and Jeju international schools—and outlines how each model differs in terms of permitted regions, domestic student admission policies, leasing flexibility, and whether for-profit entities are allowed.

What makes this column particularly insightful is that Jin approaches the issue from both legal and investor perspectives. Drawing from her experience advising on education-driven real estate projects, she presents a clear-eyed analysis of why, despite theoretical allowances—especially in the Jeju model—capital recovery remains structurally difficult in practice.

This contribution offers valuable takeaways for developers, investors, and education operators exploring international school investments in Korea, especially those evaluating long-term infrastructure strategies over short-term returns.

Source in Korean: Are International Schools a Viable Investment Opportunity?

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Are International Schools a Viable Investment Opportunity?

– The Legal Framework and Reality of Investment Recovery in Foreign Educational Institutions, Foreign Schools, and Jeju International Schools –

The term “international school” frequently appears in media and real estate development plans. However, its legal substance is distinctly defined under Korean law. In Korea, international schools are legally categorized into three main types: foreign educational institutions, foreign schools, and Jeju international schools under the Special Act on Jeju. Each type operates under different legal grounds and organizational structures.

These three models differ significantly in terms of permissible establishment regions, admission restrictions for domestic students, asset lease allowances, and whether for-profit entities are permitted. Anyone considering investment or operation must carefully account for these structural differences.

1. Foreign Educational Institutions: Regionally Limited, Conditionally Flexible

Foreign educational institutions are governed by the Special Act on the Establishment and Operation of Foreign Educational Institutions in Free Economic Zones and Jeju Global Education City, and can only be established in designated areas such as free economic zones, Jeju Island, and specific high-tech zones in Gwangju and Daegu. These institutions must be established by non-profit entities.

Leasing of school land and buildings is explicitly permitted by law, which enables the design of a Prop Co–Op Co structure. Admission of domestic (Korean) students is in principle limited to 30% of total enrollment, but can be increased to 40% with the approval of the local superintendent of education, and up to 50% in Jeju, making this model relatively more flexible in structure.

However, the institution must fundamentally operate as a non-profit entity, and profit distribution or investment recovery is generally not allowed in most regions. Therefore, regulatory barriers remain high for investors seeking returns.

2. Foreigners’ Schools: Nationwide Availability, But Restrictive on Admission and Founders

Foreigners’ schools may be established anywhere in Korea under the Elementary and Secondary Education Act and its enforcement decree. However, eligible founding bodies are limited to foreign governments, states, local governments, or school corporations, and the schools are primarily intended for children of foreign nationals.

Domestic (Korean) students are generally not permitted to enroll, except in special cases such as students with extended overseas residency or those with at least one parent of foreign nationality.

Following an April 2024 revision to the enforcement decree, the scope of allowable leaseholders has expanded from solely properties owned by governments and foreign states to now include assets owned by investment/affiliated institutions, public agencies, school corporations, and public interest corporations. The revised decree also allows local education regulations to set minimum lease terms, providing greater institutional stability.

However, these changes are limited to leasing flexibility and do not substantially affect the investment return potential or allow for a structured profit model.

3. International Schools Under the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City: For-Profit Entities Allowed, No Restrictions on Domestic Students

International schools under the Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International City are a distinct legal entity that can only be established within Jeju Global Education City, as defined in Articles 223–226 of the Special Act. Under this framework, for-profit entities are allowed to establish international schools, and there are no restrictions on the enrollment of domestic (Korean) students. Additionally, distribution of surplus funds from the school’s accounts is conditionally allowed with the approval of the Jeju provincial superintendent of education.

While this structure may appear to offer the greatest investment flexibility in theory, in practice, school accounts and corporate accounts are strictly separated, making the actual transfer or distribution of profits to the parent corporation difficult. From an investor’s standpoint, there is virtually no clear pathway to capital recovery, and despite nominal allowances for profit-making, the model has clear limitations as a profit-oriented venture.

Summary Table: Legal Structures by School Type

Conclusion:

International Schools Remain Unviable as Profit-Oriented Investments

In conclusion, international schools under the current Korean legislative framework are not structured to function as profit-generating real estate or investment vehicles.

Although there have been some regulatory relaxations, and Jeju international schools allow some level of dividend and capital return, the practical hurdles in moving surplus from the school to the corporate level remain formidable.

Therefore, even if legally permitted, in practice, international schools are difficult to be viewed as profit-driven investments in actual practice.

A more viable approach is to view them as long-term educational infrastructure, built in partnership with local communities, rather than as short-term revenue-generating ventures.