Advanced and Supply Chain Key Item Companies, Eased U-Turn Requirements

[Sejong=Asia Economy Reporter Kwon Haeyoung] Companies engaged in advanced industries or core supply chain items can receive support for U-turn (domestic return) businesses without reducing their overseas operations. Demand companies that contribute to the U-turn can also receive subsidies and other support.

The Ministry of Trade, Industry and Energy announced on the 22nd that the amendment to the "Act on Support for Domestic Return of Overseas Expansion Companies" (U-turn Act), which includes these provisions, will be enforced from the 23rd.

According to the amendment, companies engaged in advanced or core supply chain items do not have to meet the U-turn business support requirements such as reducing their overseas operations and returning. Advanced industries are defined as products utilizing 'advanced technology' under the Industrial Development Act and 'new growth and original technology' under the Restriction of Special Taxation Act.

Core supply chain items are defined as products or services utilizing technologies recognized as core strategic technologies or national core technologies related to materials, parts, and equipment (SoBuJang).

The amendment added quarantine and immunity-related industries such as disinfection, pest control, and extermination services to the existing manufacturing, information and communication, and knowledge service industries eligible for U-turn support. The purpose is to strengthen capabilities to respond to pandemic situations.

A support system was also established for 'collaborative return,' where demand companies and U-turn companies return in cooperation. When demand companies contribute to the U-turn of companies through volume guarantees, joint research and development, etc., subsidies, research and development, and workforce training can be preferentially or additionally provided to both demand and U-turn companies.

When two or more companies return collaboratively to non-capital regions, the overseas operation reduction requirement is relaxed from the existing 25% to 10%.

Foreign-invested companies (FIEs) can also be selected and supported as U-turn companies. Previously, FIEs could not receive U-turn support, but if more than 10 years have passed since the completion of financial support, FIEs can be selected and supported as U-turn companies.

Along with this, with the enforcement of the amended Foreign Investment Promotion Act (WaeChokBeop) from the 23rd, U-turn companies can move into foreign investment complexes in non-capital regions. If U-turn companies meet certain requirements such as investment amount and employment numbers, they can receive rent reductions (75?100%) upon moving in. Additionally, various supports necessary to strengthen corporate competitiveness, such as research and development, market development, improvement of settlement conditions, and guarantee support, can be provided based on various incentive grounds.