| Bird’s-eye view of island of Gogunsan in the Saemangeum Gunsan Free Economic Zone | ||
The Saemangeum Gunsan Free Economic Zone (SGFEZ) attempts to attract a wide variety of cutting-edge industries in the field of aerospace, alternative energy, automotive, research & development (R&D) and aviation.
Thanks to the diverse industries and highly developed transportation infrastructure, the SGFEZ is expected to become a key trade hub in the Northeast Asia, one of the most densely populated areas of the world.
The Korean government plans to finish this project by 2020 funding to 5.317 trillion won (about 4.2 billion dollars). When the plan is completed, the Saemangeum area will be one of the most desirable places in the world to live.
In the past, the Saemangeum area was somewhat underestimated. The importance of a role the exportation plays in the economy of Korea in lack of the natural resources cannot be questioned.
This is the true value of the Saemangeum project and the purpose of what the SGFEZ has been designated for.
The North Jeolla Province has been considered poor in terms of economic prosperity.
But, the Saemangeum project will make the region one of the highly developed provinces in Korea and lead it to a surge of foreign currency and capital.
Despite facing some obstructions by environmentalists in these days, the province will develop into a prosperous land of hope and opportunity with the potential of the Saemangeum project.
◆Free Economic Zones in Korea
A free economic zone (FEZ) is a special area where the application of domestic laws is alleviated through the enactment of laws on designation and operation of free trade zones.
The FEZ aims to make it possible to provide various supports towards equipping infrastructures such as high-tech industrial complexes and hinterlands to make it possible to conduct manufacturing, logistics, and tourism, and by furnishing pleasant living conditions that will attract high quality human resources from home and abroad.
In the free trade zone, various regulations are alleviated to provide various benefits such as establishment and operation of foreign education institutions, hospitals, foreign language service, permission on foreign currency, broadcasting, tax reductions and fund support.
Korea joined a long list of countries in 2003, including China, India, Malaysia and the United Arab Emirates (UAE), in designating FEZs with light taxes for two specifi c reasons.
A FEZ in Korea first serves to create more friendly business conditions for foreign investors and secondly, to seek a balanced growth of all provinces.
A key national agenda item of the previous Roh Moo-hyun administration was seeking balanced regional development. It paid particular attention to placing formerly underdeveloped provinces such as North Jeolla or Chungcheong Provinces on the industrial map of the country through new
development ventures.
◆Taxes Exemption for Foreign Investors in SGFEZ
Lee Choon-hee, Commissioner of the SGFEZ Authority, served as vice minister of the construction and transportation ministry under the Roh administration and is a staunch supporter of the FEZ initiative currently underway six across the nation ― Incheon, Busan & Jinhae, Gwangyang Bay, Yellow Sea, Daegu & North Gyungsang Province and Saemangeum & Gunsan.
The SGFEZ project is part of the country’s efforts to develop sustainable growth engines for all parts of Korea. Such efforts must be maintained in the future.
Ultimately, the SGFEZ is aimed at building a world-class city with an optimal business environment based on policies of global standards and catering to multinational and multicultural communities.
It will additionally be equipped with quality schools, hospitals and tourist facilities.
The SGFEZ project could also lead to changes in North Jeolla Province’s relative hesitance to embrace foreigners.
Foreign investment companies will be given tax breaks on income and corporate tax for 5 years, cash back up to 5 percent of their investment expenses, and 500,000 won per employee once the number of employees reaches 20.
Ways of support in detail are as follows: Business land use, easing of labor regulations, permission to open non-Korean educational organization, various financial and management aids, and improved living conditions.
The biggest advantage of the SGFEZ is its spacious and affordable land, providing a long-term lease up to 100 years to domestic and foreign companies. There are no other free economic zones in Korea to offer such extensive and generous lease terms.
The province will hopefully become more open toward foreigners and global businesses through more international exchanges, an integral element of the SGFEZ project.
Some reports of the international media attacked Korea for creating too many FEZs. However, the government contends that each of the six FEZs have their own geographical and industrial merits that will lure foreign investors, transforming Saemangeum into an international business hub for Northeast Asia in the long run.
By Kim, Shinhoe
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(아주경제=ajnews.co.kr) 무단전재 배포금지
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