S. Korea to offer more incentives to foreign biz investors

By Lee Joon-seung
SEOUL, July 30 (Yonhap) -- South Korea will enforce a plan this week to offer
more incentives to foreign companies operating in the country that are vital for
economic growth and job creation, the government said Thursday.
The plan, which will go into effect on Friday, calls for the provision of more
cash grants and rent-free use of land to foreign companies that are able to
create large numbers of new jobs in the country, the Ministry of Knowledge
Economy said.
While cash grants were only given to companies that establish high-tech
production and research facilities in the past, the scope of the measure will
broaden such support to foreign direct investments (FDI) with a potential to
generate jobs, it said.
"Manufacturing and mining-related operations that create more than 300 jobs will
be eligible, while financial sector firms that hire more than 200 people will
also be allowed to ask for cash grants," a ministry official said.
He said the government will offer cash grants worth up to 10 percent of total
investments, with Seoul setting aside 15 billion won (US$12 million) this year
for that purpose. The extent and size of support can be adjusted depending on
requirements.
The system was first introduced in 2005, with three companies that pledged to
invest 150 billion won in the country having received support so far.
FDI is deemed important to the economy as sluggish growth has sapped the ability
of local companies to make significant investments.
As of last year, foreign companies provided work for 320,000 people and accounted
for 184 trillion won in domestic sales, with exports from these businesses
reaching $55.3 billion.
In the first half of 2009, FDI deals grew 2.1 percent on-year to $4.64 billion.
Policymakers hope the total will reach $12.5 billion if global economic
conditions improve over the remaining six months of this year.
yonngong@yna.co.kr
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