BUSAN < invest Korea

(BUSAN = Newsis) European and Japanese investors are appeared to regard Busan as a city with attractive investment opportunities.

Together with its international offices in Frankfurt and Tokyo, the Bank of Korea (BoK) Busan office conducted a survey on business leaders of 348 foreign-invested companies in Busan about the investment attractiveness of the city and announced on February 2 that investors find the city an attractive investment destination as it offers convenience in supply of components and resources.

Also, European investors considered the potential of the Korean market, while Japanese investors put more stress on labor costs.

Between 2003 and 2012, the city attracted a total of USD 2.4457 billion of foreign direct investment, and 69.8 percent of which was from European and Japanese investors.

The FDI between 2003 and 2007 was USD 1.063 billion with an annual average of USD 200 million. The figure soared to USD 1.4394 billion between 2008 and 2012 with an annual average investment of USD 460 million.

During the same period, European investors invested a total of USD 1.2289 billion (50.2 percent), and Japanese investors increased their investment from USD 96.7 million to USD 383.3 million, posted a total of USD 480 million investments in the city.

European investors on general invested in transportation and warehouse service (USD 290 million), automobile (USD 220 million) and metal process (USD 130 million). Japanese investors, on the other hand, mainly invested in food and accommodation (USD 130 million), metal process (USD 110 million) and machine equipment (USD 50 million).

The foreign-invested companies from Europe said the biggest advantage of Busan was its port and large conglomerates in surrounding areas, and Japanese companies said low labor costs and land prices are the main factors for their investments in the city.

In particular, European investors praised for the city’s excellent freight handling capacities and competitive prices derived from the city’s ideal location. The city hosts a number of large conglomerates and is near to Busan Port.

However, investors from Europe also pointed out that the city lacks accessibility to mother companies and financial district, and incentives for investors including tax support. Investors also found that the city’s living and educational environments still need to be improved.

Japanese investors, on the other hand, listed competitive labor costs, land prices, tax support and fine living environment as the city’s advantages, and concluded that Busan offers an ideal investment environment for Japanese investors.

“Recently, Busan concentrates its efforts to attract more FDI to develop value-added service industry and strengthen competitiveness of the manufacturing industry,” said a city official. “The city needs to prepare more policies to further improve its investment environment if it wants to draw more investment from Europe and Japan.”