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March 20, 2010
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| A revision in the foreign investment promotion act aimed at enticing overseas firms to pump more money into Korea has passed the National Assembly, the Ministry of Knowledge Economy said yesterday. The move essentially clears the way for the government to provide more financial and administrative support to foreign companies and individuals investing in Korea, pending final approval by the cabinet. According to the ministry, the revision lengthens the maximum period that foreign companies can lease state and public land to 50 years from 20 years. The minimum annual commission rate on land leases will drop from 5 percent to 1 percent, which is expected to make doing business here cheaper for international firms. The government will also provide more cash support for foreign firms operating or expanding in Korea. Currently, if a foreign firm makes what is deemed a large or important investment in local property, the government returns about 10 percent of the sum in the form of a cash grant. The foreign direct investment must total at least $10 million to get the rebate. Under the revision, there is no monetary threshold, meaning even a relatively small foreign investment can qualify as long as the government considers it important. Foreign investors will also be able to get financial support for building labs in Korea when they hire at least five local researchers. Currently, they have to bring aboard a minimum of 10. The ministry said the revision will likely be approved by the cabinet next month and take effect beginning in October. By Moon Gwang-lip [joe@joongang.co.kr] |
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