South Korea is working towards creating a more business-friendly environment, the country’s trade minister has said. Yoon Sang-Jick plans to ease regulations that are seen to complicate procedures for foreign companies when it comes to investing into the country. The government is also working on a law encouraging corporate restructuring via mergers and acquisitions.
Dave Kim, assistant manager at the Wealth Management Concierge Service Group, said that South Korea’s trade minister will support foreign investors through a variety of deregulation. “For example, the current regulation is limiting the amount of foreign worker visas allowed to 20% of the foreign company’s personnel,” he said. Mr Kim also said that the trade minister is planning to increase FDI inflows this year to more than $200bn.
“By mitigating these regulations, it will allow foreign companies to invest in South Korea aggressively,” Mr Kim said.
Greenfield investment monitor fDi Markets shows that a total of 1186 FDI projects were recorded in South Korea between January 2003 and January 2015. These projects represent total capital investment of $63.39bn.
Mr Kim noted that the trade minister’s pledges during this period came as a result of the China–South Korea Free Trade Agreement (FTA). This agreement seeks to eliminate or decrease trade and investment barriers between China and South Korea. “Last year, investment from China almost doubled, compared with 2013. Also, the two countries initialled the FTA on February 25, 2014. So, the trade minister decided that this would be a good moment for South Korea to get the chance to increase foreign investment,” said Mr Kim. He added that overall foreign investment in 2014 increased more than 30% compared to 2013.
fDi Markets also reveals that in terms of project type, 88.6% of projects are new investments with an average capital investment of $310.30m. “Many regulations will be mitigated. This is going to turn into a good environment for investment and business,” Mr Kim said.