South Korea plans to provide further incentives
to attract more foreign investment into the country's free economic zones and boost development of the regions, officials said Wednesday.
South Korea first designated Incheon, west of Seoul, and two other regions as free economic zones in 2003 in a bid to transform the country into a Northeast Asian business hub. In 2008, the country designated three more regions.
But the regions failed to attract as much foreign investment as expected, and their
development remained sluggish due to administrative regulations.
The country, which aims to complete development of the regions by 2020,has
spent a total of 85.4 trillion won on building up the six free economic zones so far.
These regions attracted a total of US$2.7 billion worth of foreign direct investment
from 2004 through the first half of 2010. But the figure is just 3.7 percent of the $73.6 billion that came into the country as a whole in the same period.
"It is true that the free economic zones are not appealing to foreign investors and local companies as there are still regulatory barriers," said an official at the commerce
ministry.
"The government will scrap remaining regulations and offer more incentives to
attract more foreign investments," he said.
In an effort to attract more foreign investment, the government plans to increase lots
for foreign invested companies and rental fees will be reduced by up to 100 percent, depending on the size of investment.
Also, the government plans to provide more services and support for foreign investors in the free economic zones.
At the same time, local companies will receive the same benefits as foreign invested companies if they set up shop in the regions.
The government also plans to readjust the size of the FEZs because of slow progress in their development and ability to attract overseas investors and make more stringent assessments, officials said.