President Moon Jae-in (Yonhap)
President Moon Jae-in invited a number of foreign investor companies to Cheong Wa Dae on Thursday to express his gratitude for making hefty investments in the Korean market and encouraged them to invest further. Last year, South Korea attracted $29.5 billion in investments, the largest ever.
A foreign investor company -- usually a multinational company headquartered overseas -- is defined as one with more than 50 million won ($47,700) in foreign investment capital and a 10 percent stake in stocks that can exercise decision-making rights under the Foreign Investment Promotion Act.
“Even in the global pandemic, Korea has maintained an open economy that guarantees the safety of logistics and manpower movement without lockdown measures,” Moon said in his remarks at the meeting with business leaders.
“South Korea suffered the least economic damage among major countries despite the pandemic, and has shown a fast and strong recovery, solidifying its position as a stable investment destination in the high national credit ratings,” he said.
Moon stressed that Korea is a stable, sustainable and attractive investment destination by establishing a free trade agreement platform that is equivalent to 85 percent of the current world gross domestic product.
“Korea provides many incentives for foreign investment,” he said, citing examples of a certain rate of investment in cash payment support, rent reduction, capital goods tariff exemption, as well as local tax, corporate tax and income tax breaks.
Moon said the government worked with chambers of commerce and industry last year to improve 22 regulations for foreign companies with investments here. He vowed to expand FTAs to the 16 “New Northern” countries in Latin America, the Middle East and Africa, and to strengthen communication with foreign investors so any investment difficulties can be resolved in a timely manner.
At the same meeting, Industry Minister Moon Sung-wook unveiled the 2022 foreign investment policy direction. According to the plans, the government will strengthen investment support related to supply chain stabilization and carbon neutrality this year, centering on financial sectors such as cash and location.
The government will provide up to 50 percent of investment related to supply chain stabilization with a cash aid budget of 50 billion won. Subsidies will also be added to investments associated with carbon neutrality.
The number of new technology items subject to the R&D investment tax credit will increase from 45 to 65. More tax credit limits will be applied to national strategic technologies such as semiconductors, batteries and vaccines.
Efforts to create a favorable regulatory environment continue as the government vowed to strengthen communication through meetings with advisory groups for foreign investors and with business chambers. The number of experts in the foreign investment ombudsman office will be increased from 14 to 19, and the number of advisers on labor and environment will be reinforced from 19 to 50 to secure expertise.
Regarding new industries such as system semiconductors, bio health and future cars, and strategic investment areas such as carbon neutrality and hydrogen economy, the government plans to conduct promotional activities through tapping into investor relations and local government-linked investor relations.
President Moon said, “We will continue to make efforts to improve the support system and investment environment this year to expand the attraction of foreign investment and smooth domestic management activities of foreign investor companies who trust and invest in Korea.”
By Shin Ji-hye (email@example.com