Busan is good

Korea to support inbound foreign investors with incentives

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To boost the level of foreign direct investment (FDI) into Korea, Invest Korea (IK), an investment promotion agency, is stepping up its efforts with the government to implement a variety of deregulation projects aimed at improving overall market conditions for foreign businesses.

One of the policies adopted by Investment Korea, which is under the wing of the Korea Trade-Investment Promotion Agency (KOTRA), is to offer a beneficial incentive system that includes exempting various tax requirements and cutting red tape for foreigners seeking to advance into the Korean market, with no strings attached.

“This is in line with the government's efforts to create a business-friendly environment and living conditions for overseas companies,” said Choi Kwang-soo, deputy director of Investment Korea.

“Korea will clear tax burdens on foreign investors trying to make inroads into Korea so that their operations will go as smoothly and comfortably as possible.”

Specifically, the government will eliminate all corporation and income tariffs for the first five years and drop the tax requirement by 50 percent for two years for foreign investors of high-tech and service industries wanting to establish factories or facilities in the country. It will also grant cash incentives to foreigners for investing in new research and development centers.

Foreign companies wishing to set up regional headquarters in Korea's free economic zones will be freed from paying all local, income and corporation taxes as well as customs tariffs for the first three years after their establishment.

Besides lifting tax burdens, IK said Seoul would fully support inbound investors in building R&D centers in the country by providing labor expenses for about 100 Koreans hired by each overseas company.

Also, the government will support with living expenses up to 10 human resources officials of a foreign company dispatched to Korea.

Korea needs an average 15 percent of FDI to GDP ratio to maintain global competitiveness as well as to sustain economic growth.

 

The source of news : Korea.net  May 25, 2006