Busan is good

FEZs aim to be global business, logistics hubs

Contents

Republic of Korea​'s three free economic zones (FEZs) are within sight of becoming financial, logistical and business hubs for Northeast Asia through the development of business-friendly environments, highly-educated personnel and advanced high-tech infrastructure. 

For the past three years, the FEZs have been transforming themselves into ideal international business and residential centers where foreign business people and their families can enjoy a comfortable life with state-of-the-art educational, medical and cultural infrastructures.

The government has led the transformation of the FEZs into premier cosmopolitan cities where people of all nationalities can interact, rivaling centers such as Hong Kong and Dubai through constructing infrastructure and attracting the regional headquarters of the world's top 500 corporations.

The government has decreed that three FEZs -- Incheon, Busan/Jinhae, and Gwangyang -- be equipped with business-friendly environments, advanced financial institutions, attractive tourist destinations, and state-of-the art logistical and industrial facilities, to more effectively attract overseas investments.

The FEZs are special areas where, compared to the rest of Korea, foreign companies and their workers are able to benefit from various incentives such as tax breaks, foreign language services, labor flexibility, and the establishment of foreign schools and hospitals.

Income and corporate tax incentives along with reduced land costs have been provided to foreign companies that invest in the three FEZs.

Foreign investors, who invest $10 million or set up manufacturing operations in the zones, are exempted from corporate or income taxes for the first three years and enjoy a 50 percent reduction in these taxes for the following two years.

Those who invest more than $50 million pay no taxes for the first seven years and receive a 50 percent tax reduction for the following three years, while foreign corporate executives pay only a flat rate of 17 percent in income tax.

International companies that plan to set up business operations in the FEZs are exempted from acquisition, registration, property, and aggregate land taxes for the first three years, with a 50 percent reduction in the following two years.

Financial assistance is also available for the construction of facilities such as hospitals and schools to make life more convenient for foreigners. Administrative red tape wil be minimized.

The hinterlands of the FEZs can greatly assist in development. For example, Incheon International Airport is the world's fourth-largest in cargo processing. Busan is the world's third-largest container seaport and the newly rising Gwangyang port has great potential.

The Incheon FEZ (IFEZ) is focusing on becoming a logistical center for international business, finance and tourism, while the Busan/Jinhae FEZ (BJFEZ) aims to become a center for telecommunications and high technology industries and maritime logistics.

The Gwangyang FEZ (GFEZ) is expected to emerge as an international maritime logistics center and an industrial cluster for petrochemicals and steel.


Incheon FEZ

Of Korea's three Free Economic Zones, Incheon has taken the lead because of its location adjacent to the Yellow Sea and close to China, Japan and North Korea.

A 209-square-kilometer section of land in the port city was tapped to become a free economic zone in August 2003, the first of its kind.

Incheon's strengths in logistics, international business, information technology, biotechnology and tourism and leisure, with superior human resources, are creating a model for Korea and the Northeast Asian region. Incheon has many qualities ideal for establishing a free economic zone.

I t is a coastal city equipped with an internationally competitive airport and a seaport that is the main entry point to Korea.

The IFEZ, comprises three designated areas Songdo, Cheongna, and Yeongjong with a total area of 51,756 acres.

Songdo has attracted the most attention from investors as the area is being developed as an international business district with knowledge-based information technology complexes, including the Techno Park, a digital entertainment cluster and bio-industry complexes.

The New Songdo City, the world's largest privately-run development project, will be home to international businesses and knowledge-based information technology industrial complexes.

The U.S.-based Gale Company, a developer and marketing agent, and POSCO Engineering & Construction are working in a joint venture to develop the Songdo Intelligent City by 2020 inside the IFEZ. New Songdo City is being built based on the innovative concept of a “ubiquitous city.”

A ubiquitous city is one where all major systems, such as residential, medical, business and governmental, share information through interlinked computers imbedded in the houses, streets and office buildings.

This adventurous idea will likely prove a milestone test for using IT technology for a fully digital life.

State-of-the-art living conditions will also be provided in New Songdo City with diverse installations to back its residents and meet the requirements needed to attract investment and companies.

A knowledge-based Industrial Complex and a Bio Complex will be built by 2008.

An International Convention Center, a 65-story landmark building, office buildings, deluxe hotels, shopping malls and a golf course will also be built by 2008.

In addition, Gale International Korea has decided to construct an international school in Songdo by the end of 2008.

The New Songdo City International School (NSCIS) will be a private, independent, internationally accredited, English-language non-profit day school for the children of expatriates and Koreans and anticipates serving families from over fifty countries.

NSCIS will offer highly motivated students an enriched curriculum with internationally recognized standards from pre-kindergarten to grade 12 and college preparatory levels.

Also, next year the British International School in Shanghai plans to open a school on about 10,000 pyong of land on Yeongjongdo, with an enrollment of 1,000 elementary, middle and high school students.

New York-Presbyterian Hospital, the first foreign-based hospital in Korea, will open in Songdo International City in 2008.

The Yeongjong area includes 13,888 acres of international airport, 4,900 acres of airport support area, 1,740 acres for the Yongyu and Muui Tourist Complex, and 703 acres for the Unbok Leisure Complex.

The IFEZ is planning to develop a world-class leisure and recreation tourist complex on 1,740 acres in the Yeongyu-Muui area of Yeongjong. It will consist of a 319-acre marine world, 188-acre Dragon City on Yongyu-do and 947-acre Alice Land on Muui-do.

In the Yongyu-Muui Tourist Complex, the native ecology will be preserved in a natural tourist center, a new concept for a leisure tourist complex.

The IFEZ has signed a $2 billion memorandum of understanding (MOU) with AMEC, a U.K.-based civil engineering company to build an international business zone near Incheon International Airport.

AMEC will also build a bridge to link the Incheon International Airport and Songdo New City, which will reduce transportation time to under 20 minutes from the current one hour.

The Cheongna Area will accommodate an international sports & leisure complex, and a floral complex on 4,420 acres.

It will include a beautiful floral complex, a spacious golf course and a sports and leisure complex, to be followed by a theme park and other recreational facilities.

GM Daewoo will establish a test track and research center in the Cheongna area. In June 2005, Incheon City signed a contract of investment with GM Daewoo to establish the Cheongna Technical Center (CTC). These facilities will serve as a cornerstone to make Incheon a base for the Northeast Asian automobile industry.

The government forecast that by 2020, when the development plan for the IFEZ is successfully finished, around 4.84 million new jobs will be created to help lower the unemployment rate by 0.2-0.3 percent and raise gross domestic product per year by one percent.

It also said the IFEZ is aiming to attract about $27.6 billion in foreign direct investment by 2020.


Busan/Jinhae FEZ

Busan and its neighboring Jinhae areas were designated by the central government as a free economic zone in 2003 as Republic of Korea​ was looking to play a stronger role in the Northeast Asian regional economy. 

Second in size only to Seoul, Busan and the BJFEZ are located on the southeastern coast of the peninsula. That location, close to China and Japan by sea and air, gives access to about 1.4 billion people within a 3-hour flight radius.

Thanks to the BJFEZ's 30-berth container port which opened its first three berths in January, logistical capabilities have dramatically increased.

The new port, 25 kilometers west of the old port, is expected to serve as a key engine of development of the BJFEZ. It is equipped with 172 cargo-handling cranes, including nine giant container cranes.

Expected to be operational with 30 berths by 2011, this mammoth project will cost over 9 trillion won in government and private funds. The port will ultimately handle 10 million Twenty-foot Equivalent Units (TEUs) annually when all berths are operating.

When the South-North Korean railroad is constructed, the port will become both the starting and ending point of the “Iron Silk Road,” crossing the Eurasian continent via the Trans-Siberian, Trans-Manchurian and Trans-China railways.

The port is expected to generate 740 billion won in operational revenue and 3.5 trillion won in extra revenue, adding vibrancy to the regional economy of Gyeongsangnam-do.

The BJFEZ also sits in the center of Republic of Korea​'s strong industrial belt, which includes shipbuilding, automobile, aerospace, machinery, mechatronics, tourism and logistics industries. 

Already, big international companies call this region home, including Hyundai shipbuilding and Renault Samsung Motors, which has a plant in the zone.

The existing industrial belt has made the BJFEZ's Busan Science & Industrial Park a popular foreign investment site.

The low lease rates for land and generous financial incentives have attracted investments from all over the U.S. and Europe.

The Namyang Technology Industrial Park is beginning to gain attention from interested investors looking to establish businesses in the zone.

To complement the activities of the New Port and Science & Industrial Park, Myeongji New International City is being developed.

Myeongji New International City will primarily serve residential, commercial and business functions as well as providing public park space for recreation.

Plans include the establishment of international schools and hospitals, shopping centers, recreational and leisure facilities as well as comfortable, modern housing.

A spectacular tourism and leisure area is also being developed, making the BJFEZ an ideal place to work, and a comfortable area to live.

The Namsan Amusement Park in the zone is to be turned into a mega sea resort composed of artificial lakes with islands, a vineyard and green tea garden.


Gwangyang FEZ

The GFEZ is emerging as an international maritime logistics center and an industrial cluster for petrochemicals and steel in the Northeast Asian region.

Its proximity to the huge markets of Northeast Asia is not only about physical connectivity but about shorter time frames to adapt and adjust quickly to the demands of international investors.

The vision of GFEZ is to offer a one-stop service 24 hours a day, 7 days a week to provide a bridge between Korea and the rest of the world.

The area provides an ideal business environment based on a highly developed infrastructure with controlled development and an unprecedented costumer service attitude.

It offers a combination of logistics, manufacturing, and services with world class international investments, a high living standard and a great environment for investment.

The GFEZ has attracted many international companies. It has signed numerous MOUs with the world's leading companies and officials expect businesses will be queuing up to settle in the zone.

The companies include the Hong Kong conglomerate Hutchison Whampoa, which is willing to participate in port operations through a $40 million investment scheme.

With a $35 million investment plan, the Dutch logistics firm Steinweg is also expected to set up cargo terminals soon to handle international containers heading to China and Japan from Europe.

By the end of 2008, Gwangyang port will be capable of handling close to five million containers per year and will stretch for more than 6.2 kilometers.

When the expansion project is completed in late 2011, it will have 33 berths with a total length of 13 kilometers. Currently, the port has 12 berths that can handle 2.83 million TEUs.

The port keeps growing in all directions. Within the next few months, the port's Seaman's Club will be finished and the impressive Marine Towers Complex is well on its way.

Also, more than 100 petrochemical domestic and international companies in the Yeosu Petrochemical Complex produce some 5.4 million tons of products a year.

With its POSCO steel plant and Hyundai Steel Corp., the Gwangyang area also churns out more than 17 million tons of steel per year.

 

The source of news : Korea.net  July 07, 2006