Minster of Trade, Industry and Energy Yoon Sang-jick (Photo:MOTIE)

Free economic zones (FEZs) will see the cap on the hiring of foreigners increase in order to make them more desirable to attract foreign direct investment (FDI).

The Ministry of Trade, Industry and Energy announced on Aug. 26 ways of boosting FDI by capitalizing on the effectuation of free trade agreements (FTAs) Korea has signed with foreign countries. 

The latest measures flesh out steps to revamp incentives for attracting FDIs, announced in March, and measures to ease regulations on such businesses as food and cosmetics with higher potential for attracting FDIs, announced in May. The MOTIE have worked out the latest steps to boost exports by cashing in on FTAs in promising areas through regulatory reform, said Director Kim Yong-chae of the Investment Policy Division at MOTIE.

One of the key steps is the exempting of the repetitive environment impact evaluations in the case of the establishment of factories at the FEZ areas. The industrial sites of the FEZ areas, which initially underwent an environment impact evaluation, are no longer required to do so for factories more than 150,000 sq. meters in size, but the obscure definition of industrial sites has failed to benefit from the exemption. 

The definition of industrial sites, which are not subject to additional environment impact evaluations, will be clarified. The exemption will shorten more than one year and save more than 300 million won. 

Tenant companies will have reports on importing and exporting goods from bonded factories handled automatically. The requirement to submit each of the reports has delayed the time and production, but from now on, the automatic handling of the reports will likely minimize unnecessary red tape and expenses, the ministry said. 

An environment for importing gifted manpower is to be improved. The limit for hiring foreign expertise will go up from the current 20 percent to 30 percent. Foreigners working for medical research institutes will have their staying period rise from the current three years to five years for one time. Temporary facilities related to cultural performances will be dismantled more swiftly with a shift from a permit system to a reporting system. 

Global business infrastructure will be expanded. The ports in which truck ferries are allowed to make a port entry will be expanded from seven ports to include Tianjin Port, starting July, as Korea and China have agreed to do so during their maritime talks. The loading items of truck ferries and the districts of operating between Korea and Japan will be expanded. Truck ferries will be allowed to carry such items as semiconductors on top of automotive parts and the area of operation will be expanded to include Osaka in addition to Busan-Hakata and Busan-Simonoseki routes. 

Regarding permits on imports and exports, companies found to be faithful in abiding to regulations will be given an exception in the confirmation process by customs office heads, and the submission of import and export reports will be done electronically in addition to document reporting. 

The ministry plans to carry out strategies to attract FDI by taking advantage of FTAs. It plans to explore promising areas with the potential of attracting FDI by capitalizing on the FTA with China and the effects of hallyu (Korean Wave), designating top ten “star projects” with the goal of attracting more than $100 million. The government will ramp up activities to attract investments by capitalizing on such infrastructure as the national food cluster, Foodpolis and China Valley in Saemageum. 

The government plans to establish a Korean-Saudi cooperation task force charged with exploring promising investment areas to attract the national fund of the Middle East country.

It plans to explore promising global top-50 companies headquartered in Korea, while teaming up with national pension and fund institutions to attract quality M&A-type investments.