President Yoon Suk Yeol on Wednesday expressed his intention to ease regulations and extend more incentives to further foster an investor-friendly environment.
The government will "offer policies and regulatory environments favoring (foreign-invested enterprises) to the extent of the global standard, or even more favorable than the global standard," Yoon told participants comprising foreign-invested company representatives at a luncheon meeting held Wednesday.
"We should spare no efforts to provide various tax reliefs and other forms of financial support to you," he added.
Yoon pledged to cooperate with the National Assembly to create such an environment, without elaborating further on details.
The new incentives would "offset" foreign-invested enterprises' contribution to South Korea's economic growth, Yoon also said, at the event held at the Korea Chamber of Commerce and Industry headquarters in Seoul.
South Korea has over 17,900 foreign-invested enterprises, whose exports account for 21 percent of the national figure, and who hire 6 percent of all employees here, according to the Ministry of Trade, Industry and Energy.
"South Korea's economy is export-driven," Yoon said. "Jobs that you create are often highly admired by South Korea's young generations thanks to their high-income level and decent quality. Now it's the government's turn (to pay back)."
Yoon's remarks were followed by Industry Minister Ahn Duk-geun's briefing over plans to boost foreign direct investments at the lunch event.
Attending the lunch session were James Kim, chair of the American Chamber of Commerce in Korea; Philippe Van Hoof, chairman of the European Chamber of Commerce in Korea; David-Pierre Jalicon, chair of the French Korean Chamber of Commerce and Industry; Martin Henkelmann, president of Korean-German Chamber of Commerce and Industry; and Kazuhiro Iguchi, head of Seoul Japan Club.
Also, a dozen of entrepreneurs who represent foreign-invested enterprises, such as Boeing Korea's Eric John; GM Korea's Hector Villarreal; Applied Materials Korea's Park Gwang-sun; and S-Oil's Anwar Al-Hejazi came to the event.
In 2023, the annual inbound foreign direct investment commitment came to an all-time high at $32.72 billion, according to an estimate by the Industry Ministry. The foreign investment disbursed also hit a new height at $18.79 billion through 2023.
The significant rise in inbound investment commitments from China, Hong Kong and Taiwan -- by 65 percent on-year -- drove the uptrend.
Such commitments from the United States, European Union member countries and Japan all fell in 2023 compared with the previous year.
By industries, investments in the field of manufacturing sector decreased slightly by 4.5 percent in 2023. The finance and insurance sectors, as well as the utility and environmental sectors, both saw increases in the foreign investment volume by over twofold.
The uptrend in inbound FDI appeared to have reversed the trend worldwide. The world's FDI inflow in the first nine months of 2023 was estimated at $901 billion, down 26 percent from the previous year, according to an estimate by the Organization for Economic Cooperation and Development.
Under the Korean rules, a company with which a foreigner has over 10 percent of voting rights as a result of a 100 million won ($74,800) investment can, for example, be registered as a foreign-invested company. FDIs can also be made similarly by extending loans, contributing to nonprofit corporations, and using an unappropriated earned surplus, among other methods. Such companies have enjoyed a range of tax incentives and exemptions.
