NEW YORK, June 15 (Reuters) - Index compiler MSCI announced on Monday it will upgrade the status of Israel to developed from emerging market, and that it is studying to do the same for South Korea and Taiwan.

The United Arab Emirates and Qatar, currently considered frontier markets, will remain under review for a possible upgrade to emerging markets, MSCI said in a statement.

Israel's upgrade will take place in May, 2010, when the MSCI Israel Index will be included in the MSCI World Index .MIWD00000PUS and in the MSCI EAFE Index.

The reclassification of Israel, which was already expected by analysts, will likely draw more investors into the country's equity markets, since many are only allowed to invest in developed markets.

The other potential upgrades will be decided in June, 2010, after a one-year review process.

South Korea, which many analysts expected to be raised to developed markets along with Israel, will need to make "significant process" before an upgrade, MSCI said.

The main problems facing the South Korean market is the lack of full convertibility of the won, the rigidity of the identification system, and anti-competitive practices, MSCI said.

(Reporting by Walter Brandimarte; Editing by Diane Craft)