DAEGU < invest Korea

Daegu plans to enhance competitiveness of local companies by supporting new and reinvestment of regional enterprises.

The city will also focus on job creation and regional economy facilitation by emphasizing promotion of promising companies. Daegu plans to attract new and reinvestment of local companies with the Korean government’s regional investment incentives.

This year the Korean government ensured regional investment incentive budget of KRW 140 billion, a 40 percent increase from last year.

As regional investment incentives became available for new and re-investment of local companies from 2011, the program is contributing substantially to create jobs and activate the economy in regions.

Daegu achieved new investment of KRW 191.4 billion and 818 new jobs between 2011 and 2012 by supporting KRW 19.9 billion to 24 local companies.

In particular five percent and ten percent of the budget in 2011 and 2012 respectively were supported to companies in Daegu which made new or re-investment, where the budget was usually supported to regions close to Seoul such as Gangwon and Chungcheong.

The local 16 companies which received incentives in 2011 completed originally planned investment.

With the new investment, the companies had a chance to grow into mid-sized companies as sales and employment increased by a large amount relative to last year.

Based on local companies’ efforts to facilitate investment, Maxrotect was awarded the President’s Award and the Minister’s Award was given to Ibche Corporation and Shinyang Precision last year.

A local company that received incentives last year noted that the company was hesitating reinvestment despite the plan to purchase a plant in the Sungseo Industrial Complex close to the headquarters and easy to recruit due to expensive price. The company received incentive of KRW 4.4 billion in cash to support the largest facility investment in the company’s history which greatly aided.

An insider of the company noted that the company will contribute to development of the regional economy by creating new jobs, increasing R&D investment, and growing together with partner companies with incentives.

With the reinforced program for innovative cities, the incentive increased by ten percent at maximum compared to other regions.

In addition, if companies that made a new or re-investment improves working environment such as childcare facilities and housing, 30 percent of the cost is provided so that employees of companies can see benefits from the program.

To qualify for the program, small- and medium-sized companies have to be in business for more than three year and have more than ten full-time employees, has made a new investment over KRW 1 billion in leading or targeted promoted industries in Daegu. A conglomerate has to make a new investment over KRW 30 billion.

The program supports ten to 20 percent of facility investment. Companies are selected by consulting with Daegu investment promotion team, reviewed for their qualification for support by the Ministry of Trade, Industry and Energy.

This year including two companies in Seoul, five companies plan to invest KRW 131.4 billion and have applied for incentives. Many other companies which have plans for new and re-investment in the second half of the year are inquiring.

Ahn Guk-joong, a Daegu official of the Economy and Trade Bureau, noted that regional new and re-investment incentives enabled supports for local companies that have been neglected relatively to foreign-invested companies and those in Seoul. The city holds high expectations as it will serve as a good opportunity to help local companies to upgrade with new and re-investment.

Source: Newsis (May 27, 2013)

** This article was translated from the Korean.