South Korea will lower the requirements for foreign-invested firms to receive financial incentives as it seeks to attract over $20 billion in fresh foreign direct investment for the first time, the government said Sunday.

Currently, FDI in any given company or joint venture must be at least twice the value of the land rented inside a foreign investment zone in order for the company to qualify for the special rental rate, which is 1 percent of the land value, according to the Ministry of Trade, Industry and Energy.

Those who fail to meet the requirement have to pay a rate of 5 percent.

Starting Monday, the minimum foreign investment required will be halved.

This will benefit 10 foreign-invested firms in the FIZs who are not currently eligible for the special rental rate, the ministry said.

The minimum ratio of building space to total area will also be reduced by up to 50 percent for certain industries, benefiting five more foreign-invested firms.

There are presently 185 foreign-invested firms operating at 20 FIZs throughout the country.

“The revision to the guidelines on the operation of foreign investment zones will help reduce the financial burden on some 40 existing firms while also helping to attract more foreign investment,” the ministry said.

In the first six months of the year, new FDI pledged to South Korea reached a new first-half high of $10.33 billion, up 29.2 percent from the same period last year, with the amount of new FDI arriving here also spiking 55.9 percent on-year to $7.2 billion, the ministry said earlier.

It added that the government would eliminate at least 19 of 62 regulations on trade and foreign investment over the next four years to help further boost foreign investment. (Yonhap)