Korea plans to launch a fund to help foreign investors bring in skilled labor and technology from overseas in target sectors.
The Global Win-Win Fund will be created in August or September with 100 billion won ($92.6 million) and expanded to 300 billion won ($278 million) over the next two years, the Ministry of Knowledge Economy said Sunday.
Of the total, the state-run Korea Finance Corporation plans to back 70 percent. The government will raise the remainder through a private fund, for which the financier is taking applications.
“The Korea Trade-Investment Promotion Agency will scout for potential investors utilizing its global network with more than 100 offices in 70 countries and screen the candidates in cooperation with the KoFC and the fund house to provide financing,” a ministry official said.
The plan came after months-long discussions between the ministry and the two public agencies over how to boost foreign investment, saying it would “help foreign investors hedge and diversify risks.”
At home, the fund will shore up nascent industries by bringing in international experts and technologies, while creating high-quality jobs and facilitating small and mid-sized local firms’ overseas expansion, the FoKC said in a statement.
The government has been actively sponsoring 17 key areas as promising economic drivers. The list includes green businesses such as renewable energy, water treatment and light-emitting diodes; future technologies such as information technology, robots and nanoscience; and other services such as food, health care and biopharmaceuticals.
According to the ministry, foreign direct investment into Korea jumped 30 percent to more than $2 billion in the first quarter of the year compared to a year earlier amid a U.S. investment rush.
Though European investments shrank by nearly half year-on-year to $434 million for the three-month period, the ministry said, capital flows from the U.S. spiked more than tenfold to $467 million. Japanese investment came in third with $367 million, up about 40 percent.
Some foreign investors have pointed to South Korea’s vague policies and clan-dominated business environment, plus unresolved tensions with North Korea, as reasons not to invest.
To address such issues, the government has been striving to reform regulations, offer tax-breaks and ease visa requirements, and has set up six free economic zones in cities including Incheon, Busan and Daegu, where foreign investors get financial and legal incentives.
By Shin Hyon-hee (firstname.lastname@example.org)