A NEW government initiative launched with the personal backing of President Kim Young-sam to head off a dramatic slump in overseas investment has been slammed as ''too little, too late'' by foreign analysts. Mr Kim has become the first chief executive to oversee a major change in the foreign investment laws. Earlier this week, he presided at a cabinet meeting in which plans to substantially improve the investment climate were announced. Panicked by the loss of competitiveness of many of its main exports, despite temporary succour because of the yen appreciation, the new government is desperate to upgrade its technology through overseas investment. With many foreign companies - particularly Japanese and American - leaving for richer pastures in recent years because of spiralling costs, South Korea has become a graveyard for joint ventures since the 1988 Olympics. Several foreign companies such as Proctor & Gamble, Unilever, Price Waterhouse and United Distillers are going through complicated divorce proceedings. According to the Ministry of Finance, South Korea attracted only about US$800 million in new foreign investment in 1990, far behind Singapore's $4.8 billion, the Association of Southeast Asian Nations' combined $8.6 billion, China's $3.5 billion and Taiwan's $1.3 billion. In 1992, new investment totalled $894.6 million, down 36 per cent in value and 18 per cent in number from the year before. Although any move to improve the investment climate is welcomed by South Korean and foreign businessmen, there is the usual scepticism that the latest measures will not be any more effective than several similar packages introduced by the Roh Tae-woo government. This time around Mr Kim has come up with wide-ranging promises to expand infrastructure and generally improve the investment climate. The new measures include: Approval for foreign companies to buy land for plant construction and staff housing without government permission. Foreign companies can finance hi-tech investment with offshore loans. A ban on the import of certain business equipment from Japan has been relaxed. Unlicensed traders can export up to $20,000 of goods at a time, up from the current limit of $10,000. Permission for exporters to receive advance payments of up to three per cent of total exports, up from the current two per cent. Foreign companies would have preferred a simple pledge from the Government to give them managerial independence. In short, they do not want to be told by the Government how to run their businesses. ''For every one regulation I have in China I face 150 in Korea,'' said one foreign businessman who visits both countries on a regular basis. ''I find myself spending less time in Korea these days as the China market continues to improve. I am always amazed by the irony that China, which is supposed to be the centralised Communist state, is much easier to do business in than capitalist SouthKorea.'' South Korea's unruly unions are regarded as the biggest stumbling-block to further investment in Seoul. Another major complaint is the way the Government often appears to use the tax office as a way of keeping foreign companies in line. Several foreign companies involved in disputes with South Korean rivals have suddenly found themselves audited by localtax officials. What is needed, say analysts, is a fundamental change in the attitudes of middle-ranging officials in government ministries, who still consider foreign investment as the raping and pillaging of the homeland. In hi-tech manufacturing, which is the main area where South Korea wants to attract investment, there are still fears that copyright protection is not adequate to protect foreign companies from having their technology pirated. In areas where foreign companies are interested, particularly the service sector, which is regarded as a potential gold mine in South Korea, they are kept out by paranoid local firms keen to protect their monopolies. The Government, too, has a remarkably short memory in quickly forgetting some of the debacles which have happened to foreign firms in the not so distant past. The decision by the Roh regime to rob Sunkyong and its foreign partners of the second mobile phone contract sent all the wrong signals overseas, say analysts.