The nation’s Foreign Economic Zones are expected to lure more private developers and real estate investment immigrants as the Ministry of Trade, Industry and Energy revised qualifications for land development and foreign real estate investment.
The revised bill on the special law for FEZs, specially designated regions to attract foreign investment, will be sent to the regular session of the National Assembly this fall, the ministry said in a press release on Wednesday.
“To step up land development of FEZs, the next step after a designation, the revised bill allows private developers to secure up to 50 percent of shareholdings from a special purpose corporation, which is set up for FEZ development,” a ministry official said. Previously, participation of private developers was very limited due to legal disputes with the land owners in the course of development. State-run developers, like LH, have led FEZ development for the past decade.
The ministry lowered the bar for private participation in developing an FEZ as it is difficult to find a developer, whether public or private, amid the protracted slump in the real estate market.
According to the ministry, a majority of the eight FEZs nationwide are having difficulty in finding a developer. Despite a decade-long development drive since the first FEZ in 2003, about half of FEZ zones failed to find a developer.
The revised bill will also make it easier for foreigners to immigrate to Korea by investing in condominium resorts in the Incheon FEZ to facilitate real estate investment immigration from China, the ministry official said. Currently, real estate investment immigration is allowed only in the Incheon FEZ.
The ministry expects investment and development will accelerate if the revised bill is passed in the National Assembly.
“The goal of FEZs for the second period is to build a world-class business environment, attract multinational companies and create jobs,” said Kim Sung-jin, director general at the ministry’s FEZ planning office.
By Seo Jee-yeon (firstname.lastname@example.org