Gov`t eases corporate sector rules to fuel economic growth

(ATTN: UPDATES in paras 5, 12; ADDS with new information in paras 10-11)
By Lee Joon-seung
SEOUL, May 27 (Yonhap) -- South Korea said Wednesday it will ease
business-related restrictions that have been cited as hindering economic growth.
The prime minister's office said it will suspend or scrap 280 regulations on
setting up new businesses, sales activities and small- and medium-sized
enterprises (SME).
The measures comes as Seoul and foreign analysts predicted the country will post
negative growth this year, translating into fewer investments and a loss of jobs.
Export-driven South Korea has been hard-hit by the global economic slump,
triggered by the U.S. financial crisis last year.
The plan formalized at a meeting chaired by Prime Minister Han Seung-soo aims to
ease building rules for factories, potentially allowing up to 50,000 companies to
expand existing facilities, and will lower rents for SMEs using state-owned
assets.
The measures will, in addition, reduce infrastructure charges levied on companies
that build new plants and lower basic utility costs.
It also calls for the extension of corporate and income tax benefits to smaller
companies until 2011. Under the new scheme, the country's construction laws will
be readjusted to help builders grow. Construction accounts for roughly 18 percent
of South Korea's gross domestic product.
"Of the 280 rules that will be eased, 140 will be only on a temporary basis,
hopefully pushing companies to take quick action," a government spokesman said.
He stressed that the latest move could help steer a large amount of liquidity
into the market by reducing costs associated with business activities.
Related to the changes, the Ministry of Knowledge Economy said Seoul will waive
power infrastructure charges on new manufacturing plants up to 2013 and allow
so-called apartment factories to operate small theatres that can help defray
operational costs.
The farm ministry also said that it will suspend slapping agricultural land
preservation fees for new industrial complexes near the capital city that are
built from 2010 to 2012. The move could help cut costs by up to 25 billion won,
funds that could help spur new investments.
The government, meanwhile, said that a related enforcement ordinance will go into
effect in July so as to have an immediate impact, with those requiring
legislative approval soon to be submitted to the National Assembly.
yonngong@yna.co.kr
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