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Korea to remove red tapes to promote free economic zones

According to Pulse by Maeil Business News Korea,

Art and fashion schools and specialized colleges and short-term learning courses will be available in free economic zones (FEZs) across South Korea in latest deregulation action to vitalize the free economic zones and liberalize the service sector. 

To draw investment in the eight free economic zones around the country, foreign medical institutions would be able to open business under management control by Korean entity by lowering the bottom on foreign stake-holding ratio to 49 percent from 50 percent. The measures were announced by the Ministry of Trade, Industry and Energy (MOTIE) after the seventh cabinet meeting on deregulation and liberalization.

The minimum space acquisition for foreign direct investment would ease to 160,000 square meters from 330,000 square meters.

Various incentives currently available for foreign corporate tenants would be bestowed to any local companies entering the free zone. Korean startups would be invited into special public space reserved for contribution to local economies and local members also would be allowed in the 50-year lease land exclusive for foreign companies.

Colleges in specialized fields like art and fashion would be allowed to open in the free zones. Schools in joint venture with local counterparts running a range of short-term courses such as in IT will also be welcome. Currently only universities offering full undergraduate programs are allowed in Korean free economic zones.

The nation’s free economic zones attracted about $1.5 billion in foreign direct investment (FDI), making up less than 10 percent of last year’s total FDI of $20 billion.

Industries in the zones were largely limited to traditional fields like shipbuilding and steel-making. Latest changes in current local law are expected to promote new industries and draw local members in the free economic zones.

The regulation regarding bonded manufacturing warehouse also will be overhauled. A bonded manufacturing warehouse is a building or other secured area managed by the state or by private enterprise in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. The new rule will cover more materials used in semiconductor and bio industries to be exempt from tax duty.

By Ko Jae-man and Lee Sang-duk

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (Sep. 1, 2016)

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