Gov't to give 7-year tax break to FEZ-invested foreign company

SEOUL, April 26 (Yonhap) -- A Netherlands-based biotech company will be granted tax benefits for up to seven years as part of the ongoing effort to attract more foreign direct investment, the government said Sunday.

The free economic zone (FEZ) management committee said it passed a motion to
exempt Berna Biotech Korea from taxes for five years, with the company obliged to
pay 50 percent taxes in the following two years.
"Under existing rules, the management committee has the right to grant tax breaks
to companies operating in special economic zones by reviewing its contribution
and passing the motion by a vote," a government official said. He stressed that
the benefits could send a positive message to get more companies to invest in the
country.
Berna, a 100 percent overseas invested company, is a global player in the vaccine
market, with 90 percent of its sales going to the United Nations Children's Fund,
the Pan American Health Organization and multinationals like Quinvaxem.
It also holds a 50 percent global market share in vaccines for small children.
The committee under the Ministry of Knowledge Economy said the company has
invested $30 million to build a manufacturing center in the Songdo region of the
Incheon FEZ west of Seoul. The company said it wants to build its South Korean
operation into one of its global supply bases.
The plant being built on 21,421 square meters of land is expected to be completed
next year, with full-fledged operations to begin in 2012.
Seoul originally planned to attract $12.5 billion worth of FDI for 2009, but the
worldwide economic slump has affected overall business activities across the
board.
Reflecting this, the ministry in charge of industrial policies and trade said
first-quarter inbound investment plunged 38.2 percent to $1.67 billion from the
$2.71 billion tallied for the year before.