Seoul promises cash, tax incentives for foreign investment

SEOUL, Jan. 29 (Yonhap) -- South Korean President Lee Myung-bak Thursday promised to expand tax breaks and cash grants for foreign investors while pledging that government reform measures will soon provide an environment that will not differentiate between domestic and foreign firms.

Lee urged foreign investors to increase their investment here, especially as the
country heads toward a recession that he earlier said will be the worst of its
kind to ever hit the nation.
"Investing in Korea now will not only provide an opportunity to take a dominating
position in the Korean market, but will also provide strength to all investors to
overcome the crisis," Lee said in a meeting with foreign business representatives
and diplomats here.
The president noted the crisis will soon be followed by an opportunity, saying
his government is preparing for what he called a "new era."
To attract more direct foreign investment, the country will improve its
environment through sweeping deregulation efforts, Lee noted.
"(Korea) will do its utmost to foster a "market-friendly" business environment
that does not treat foreign businesses any different from local firms," Lee said
at the meeting, the second of its kind since he was elected president 13 months
ago.
Lee did not elaborate, but a presidential economic committee announced earlier
Thursday that some 8,000 social and economic regulations, including unspoken
rules, will be subject to eventual termination under an effort to remove red tape
from the market.
Up to 1,300 government regulations will be scrapped within the first half of the
year, while the rest will undergo a review to set their expiration dates,
according to the Presidential Committee on Economic Competitiveness.
The president said the country will work to secure more flexibility in its job
market.
"This economic crisis will be an opportunity for us to significantly change the
structure of our job market and the relationship between workers and employers,"
he said.
The president has called for wage reductions, including a cut on the minimum wage
for workers who have passed retirement age, under job-sharing efforts. Labor
organizations oppose the move, saying they should instead share jobs by
shortening work hours.
The president also offered to increase "cash grant" and tax incentives for
foreign businesses who invest in Korea.
"Korea will become the most open market in the Northeast Asian region," said Lee.
"This is the time when entrepreneurship is needed more than ever. The Korean
government will do everything it can to support all businesses that face the
challenge."
Thursday's event was attended by some 560 foreign business representatives,
including the heads of U.S. and European chambers of commerce in Korea.
bdk@yna.co.kr
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