Gov`t to ease land, housing rules in free economic zones

By Lee Joon-seung
SEOUL, Feb. 1 (Yonhap) -- The government said Sunday that it will greatly ease
land development and planning permission rules in the country's free economic
zones (FEZs) to attract more overseas investment.
The changes, outlined in a special law that goes into effect on July 31, give
foreign investors greater leeway to build rental homes and sidestep various
administrative red tape restricting use of land, the Ministry of Knowledge
Economy said.
"In effect, the new measures will truly make these regions 'restriction-free'
which can help them grow," a ministry official said.
South Korea has set aside 10 FEZs with Incheon, Busan-Jinhae and Gwangyang being
first designated in 2003. These regions offer investors various tax breaks,
waivers on import duties and state support for the building of plants and
logistics bases, but there have been calls for more deregulation.
Under the new law, all FEZs must set aside up to 10 percent of all residential
land for use by foreigners with rental rates and eligibility to live in such
homes to be determined independently of local housing rules that can be deemed as
restrictive.
In addition, local FEZ authorities can provide land to foreign investors below
actual market prices as a form of incentive, while giving preferential deduction
in special charges or quasi-taxes that are levied to compensate for lost farmland
and cost-sharing of development.
The ministry in charge of the country's industrial and trade promotion policy
said direct cash support could be given to foreign research and development
laboratories, and schools that want to set up operations in the FEZs.
Other changes that are to be made include the transfer of administrative and
oversight control of numerous permits and restrictions -- currently held by local
wards and counties -- to the FEZ authorities. This handing over of authority
covers such fields as setting permissible noise and vibration levels, and
overseeing prices of newly built homes.
The ministry, meanwhile, said the heads of the FEZs will be granted autonomy to
implement policies that best suit the region by being assured a minimum three
years in office and being allowed to run for a single second term.
FDI is a critical component of growth since it can create more jobs and allow
local industries and service sectors to acquire knowhow in the latest global
trends.
In 2008 the total inflow of investment funds topped US$11.7 billion, up from
$10.5 billion in the previous year. For this year, Seoul is aiming to attract
$12.5 billion.
yonngong@yna.co.kr
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