Newly established subsidiaries, joint ventures now eligible for regional investment subsidies
Firms sourcing 70% or more domestic equipment to receive 2-percentage-point bonus subsidy rate
Step-by-step support to cover investment review, subsidy application, settlement and post-management
Korea Industrial Complex Corp. has launched a dedicated support program — dubbed the "Regional Investment Running Mate" — to guide companies through every stage of relocating to or expanding in regional areas, from initial investment review to subsidy applications and post-investment management.
The state-run industrial complex operator announced Tuesday that it would provide comprehensive support for companies pursuing regional investment, in line with revisions to the Ministry of Trade, Industry and Energy's standards for national fiscal support for local government efforts to attract regional investors. The revised standards took effect July 20.
The regional investment promotion subsidy is a program under which the central government and local governments jointly cover a portion of investment costs when companies based in the Greater Seoul area relocate to regional areas or build new factories or scale up existing ones outside the capital region.
Under the revised rules, newly established subsidiaries and joint ventures less than one year old are now eligible for subsidies if they meet certain requirements. Companies that lease part of an existing facility to another business may also apply for subsidies covering the portion of the space they retain for their own use.
The scope of recognized equipment investment has also been broadened. Companies that source 70 percent or more of their machinery from domestic manufacturers will receive a 2-percentage-point bonus on their subsidy rate, and the cost of purchasing used equipment — previously difficult to count as eligible investment — is now included as well.
Post-subsidy compliance obligations have been adjusted, too. Previously, companies were required to maintain employment levels and floor space across all their facilities nationwide. Going forward, only facilities in the same industry as the new investment will be subject to those requirements.
Korea Industrial Complex Corp. said it decided to operate a step-by-step support system after finding that many companies still struggle with application procedures and business planning even after the regulatory revisions.
In the early stages of investment, the organization will identify prospective investors and provide one-on-one consultations and assistance with drafting business plans. For legal, financial and funding challenges that arise during the investment process, it will connect companies with specialists and relevant agencies.
After subsidies are disbursed, the organization plans to support investment compliance checks, settlement verification and post-investment management to help companies establish themselves in their new regions and encourage follow-on investment.
Companies interested in regional investment can apply for subsidies through the local government with jurisdiction over their intended investment site, which will then submit the application to the Ministry of Trade, Industry and Energy. Korea Industrial Complex Corp. said it will work with local governments to provide support from feasibility review through project implementation.
"We expect the revised subsidy standards to ease the burden on companies considering regional investment," Korea Industrial Complex Corp. Chairman Lee Sang-hoon said. "We will use our nationwide industrial complex network to ensure that corporate investment translates into revitalization of regional economies."
hong@heraldcorp.com
