The Ministry of Trade, Industry and Energy announced last week that revisions have been made to the Special Act on Designation and Management of Free Economic Zones.

The revised act aims to alleviate regulations that inhibit free economic zone development and investment promotion.

Required investment for project developers, including central / local government and public agencies, of free economic zones when establishing a special purpose company (SPC) was reduced from 100 percent to more than 50 percent.

The revised act is expected to make the establishment of SPCs and participation of private capital easier, leading to facilitated development.

In addition, once both the implementation and development plans for free economic zones are changed, the Minister of Trade, Industry and Energy can approve them at the same time.

Previously, it took eight months to obtain approval from both city or provincial governors and the minister when implementation and development plans were changed. However the time required to receive approval is expected to be shortened to about five months.

Another revision addressed a condition in the Tourism Promotion Act that required condominium rooms, which are part of an immigrant investor scheme, to be big enough for five people. Considering foreigners’ 1-person-per-room preference, this condition will no longer apply to condominiums.

Kim Sung-jin, a MOTIE official in charge of free economic zone planning, noted that the revised act will lay the foundation for Korean free economic zones to become global business hubs.

MOTIE plans to submit the revised act to a regular session of the National Assembly in September.


Source Text

Source: Newsis (July 31, 2013)

** This article was translated from the Korean.