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On March 11, the Ministry of Knowledge Economy (MKE) reported that it will reform the local investment promotion subsidy system to increase corporate investments in local areas.
According to the ministry, large companies will be provided with an equipment investment subsidy amounting to 3~7 percent of their equipment investment, when they make a new investment in local areas.
Large firms have thus far been given subsidies only when transferring their operations to local areas.
Under the revised system, companies invested in local areas will be given subsidies, up to 30 percent of the cost of labor environment-related facilities in order to encourage them to improve employee welfare and working conditions.
In addition to a subsidy provided to a group of enterprises and partner firms engaging in similar businesses, there will be subsidies for the establishment of jointly used infrastructures (e.g., electricity, gas, and wastewater equipment) and the construction of expressway access roads.
Subsidy details will be discussed by local government authorities.
Companies will be provided with additional subsidies, up to 10 percentage points, if they move into innovation and business cities, such as Sejong City.
Additionally, regulations inconvenient for companies will be eased or improved, with changes partially involving shortening the post-management period for companies granted with subsidies and approving newly-invested companies to relocate their facilities.
Based on government expenditures, KRW 101.7 billion was appropriated last year, and KRW 141.3 billion will be earmarked this year.
Source: Yonhap News (Mar. 11, 2013)
** This article was translated from the Korean.