Korean Gov’t wants FDI to hit $15 billion Targets services, green industries

The government yesterday laid out plans to attract $15 billion worth of direct foreign investment into Korea this year by improving the country’s high-value services and green industries. Last year, the country attracted $13.7 billion, which was a 13.8 percent increase from $11.4 billion the previous year. “Last year, Korea was able to reach a turning point in attracting foreign investment as the FDI volume marked the highest in a decade’s time, reaching over $13 billion,” Byun Jong-rip, head of the Knowledge Economy Ministry’s foreign investment policy department, said yesterday. “Foreign investment expanded last year especially in sectors such as manufacturing and so-called greenfields, while an increasing amount of cash flowed in from emerging nations such as China.” Based on various external factors, such as Korea’s free trade deals with the United States and the European Union as well as its economic growth rate set at 5 percent, the ministry plans to increase FDI this year by enhancing an incentive system that provides foreign firms with cash grants and assistance to purchase necessary land. It also wants to expand investment relations efforts with developed nations and emerging nations. Foreign businesses will be allowed to receive tax and other support when investing in Korea if their investment in the manufacturing sector exceeds $10 million. Firms engaged in the service sector will be given similar benefits if their investments exceed $5 million. The ministry has been given 14 billion won worth of funds to provide foreign firms with direct cash grants this year, which is an increase from 3.1 billion won in 2010. “To achieve our FDI goal, we plan to utilize the bilateral deals Korea is expected to have with countries like the U.S. and try to attract Korea as an investment hub for nearby nations. “We will attract firms engaged in industries like automobile, electronics, wireless telecommunications, chemical and medical machines that are impacted by tax reduction,” Byun said, noting that the central government will also work with regional governments, overseas investment centers as well as large conglomerates and private investment firms. Meanwhile, last year, FDI in the manufacturing sector increased from 32.4 percent in 2009 to 50.9 percent in 2010. FDI promoted by developed countries including the U.S., Europe, and Japan, decreased from 75.9 percent in 2009 to 54.9 percent last year while emerging nations increased. Source :  http://joongangdaily.joins.com/article/view.asp?aid=2931729