(Background)

Chungcheongnam-do Province is active in attracting investors in its foreign investment zone and has a strong will to provide cash grant to the businesses with high technology that the province is competing for against other countries. However, the related regulation is an obstacle for that aim.

(Major issues)

- As for the businesses that moved into the leased land including foreign investment zone, the site cost is included in the limit for cash grant. In reality where the land’s site cost is more expensive than the limit for cash grant, the support system cannot be used as an investment attraction measure.

- It is necessary that the system is improved to provide cash grants to the businesses that moved into foreign investment zone. In order to do so, the government’s land purchase cost for the leased land need to be excluded from the calculation of the limit for support in cash.

The Office of Foreign Investment Ombudsman (OFIO) received the grievance and contacted the Ministry of Trade, Industry and Energy (MOTIE). OFIO requested that the ministry considers the system improvement by excluding the government’s land purchase cost for leased land when calculating the limit for cash grant and instead reducing the rent for foreign businesses that moved into foreign investment zones. As a result, the related regulation was amended for improvement. (Notification of the Ministry of Trade, Industry and Energy No. 2014-614)