It isn’t difficult to find why Incheon International Free Economic Zone is rising as the next hotspot for global business.
It has good air, sea and land access and people with great potential to lead the city to become an internationally hailed business district over the next two decades.
Designated as Korea’s first FEZ in 2003, the Incheon FEZ is situated at the heart of Korea’s logistics, information and technology industries. It is also a hub for Northeast Asian countries, including China, Japan and Korea, with the region having a combined population of 1.7 billion.
The 169.5 square-kilometer area with 850,000 expected residents perfectly fits the concept of a self-sufficient business district.
Incheon International Airport, about 15 minutes drive from the IFEZ, is ranked second for aerial distribution and twelfth passenger carrier in the world. Its flight service has been selected No.1 by noted global magazines.
The Incheon Port, the nation’s second largest facility of its kind, has sustained a 20 percent annual increase in container distribution to China. The New Songdo Port inside the IFEZ and its 260 logistics complex is expected to cover 4 million twenty-foot-equivalent units (TEUs) a year once it is completed in 2020. Operators predict that the IFEZ will then be on par with Shanghai and Dubai, covering the areas of leisure, tourism, education as well as medical industries.
With such environment, the IFEZ is within three hours’ flight of anywhere in Northeast Asia, which has a total of 1.7 billion people and generates a quarter of worldly gross domestic product.
Moreover, what makes the zone more appealing to businesses is the fact that 58.8 percent of university or higher degree holders in the nation reside in Seoul, Incheon and Gyeonggi Province, operators say.
The IFEZ has already signed MOUs with Boeing, Samsung TESCO, Orix, McCaffery Interests and other international firms. Boeing is to build a training center for their pilots and McCaffery will invest into building top-tier hotels and shopping districts. By 2014, the district is expected to house more than 300 Northeast Asian business headquarters and 30 international organizations, becoming Northeast Asia’s center of business and education.
Songdo, a district of the Incheon free economic zone. (Incheon Metropolitan Government)
In November last year, Samsung signed a memorandum of understanding with Incheon Metropolitan Government to establish a 2.1 trillion won manufacturing plant in the IFEZ.
The construction of the Samsung Biologics plant kicked off in May at the 274,000 square-meter plot, where biosimilars and new drugs will be produced from 2013. A separate building for research and development will be established, too.
Incheon Mayor Song Young-gil told the reporters that what had attracted the business giant was the area’s potential.
“There was a blueprint that Songdo will become the mecca of biotechnology. It already is set to house bio institutes by CJ Group and a joint venture between the University of Utah and Inha University. Establishment of a brain institute by Gachon University is also under way. The Seoul National University and Johns Hopkins University have reportedly showed interest in building their branches here, too,” he said.
Song said that easy access to highly educated people had propelled the deal: Rumor has it that North Carolina State University and Stony Brook University have their eyes on the district for their overseas branches. Chadwick International School which is already in operation entices the wealthy, young and passionate demographic to the zone.
In order to take the lead in the bio-pharmaceutical industry, the latest focus of Samsung group, the most important thing is attracting such talents, Song said.
The municipal government said a total of 2.1 trillion won will be invested into making Incheon a global bio industrial hub by 2019.
And on Aug. 12, Dong-a Pharmaceutical, the nation’s No.1 drug maker, said it will also place its state-of-the-art R&D center in the district, painting even rosier picture to the future of the IFEZ.Incentives for investors
There are perks for market pioneers who pick the IFEZ as their destination. A five-year-income tax exemption is given to those who invest more than $10 million in tourism; $5 million in logistics or medical and $1 million in research and development sectors. They will also be exempt from acquisition and property taxes for 15 years and 13 years, respectively.
For foreign investors who put more than $30 million in manufacturing; $20 million in tourism; $10 million in logistics; and $2 million in R&D sectors with the approval from the IFEZ committee, the exemption will expand to seven years in income tax, 15 years in acquisition tax and 13 years in property tax. Home from home
The IFEZ operators are also vying to create home away from home for foreign investors and workers at Songdo and other parts of IFEZ.
The IFEZ Global Service Center, which opened on April 28, has reportedly provided consultation and assistance to a total of 500 foreigners.
The visitors were given a promotional tour of the district, access to community associations and newsletters in the Meet You All Tower. The opening of the website, www.global.ifez.go.kr, has enhanced accessibility, the operators said.
An “Afternoon Teatime,” service allows foreigners who have day jobs to drop by at the center for a cup of tea and talk over problems.
“Foreign residents expressed their satisfaction that a community of their own could be formed with the help from the global service center. However, they have also given us good advice that the district needs more restaurants, shopping malls, sports centers and other leisure facilities to meet their demand,” an official at the center said.
The IFEZ global service center is planning to induce foreigners to participate in various charity and volunteer programs hosted by the center. A guidebook for foreigners sojourning in the city will be released in September.
By Bae Ji-sook (firstname.lastname@example.org