Foreign-Invested Companies Also Receive Cash Support for 'Semiconductor Equipment Conversion'

'Enforcement Decree of the Foreign Investment Promotion Act' Amendment Approved at Cabinet Meeting
Includes Transition to Advanced Industries Such as Vaccine Display

In the future, not only new and expanded investments in factories by foreign investors but also investments to replace existing facilities for transitioning foreign-invested companies to advanced industries such as semiconductors, displays, and vaccines will be eligible for cash support.

The Ministry of Trade, Industry and Energy announced that the amendment to the "Foreign Investment Promotion Act Enforcement Decree," which includes this content, was approved at the Cabinet meeting on the 11th. The amended enforcement decree will be promulgated and come into effect immediately on the 18th.

The main point of this amendment to the enforcement decree is to expand the scope of cash support for foreign investment. Currently, cash support is only available for foreign investments involving ▲establishment of regional headquarters ▲execution of regionally specialized industries and wide-area cooperative industries ▲research and development (R&D) of new growth engine technologies and advanced technologies. However, going forward, cash support will also be available when existing factory facilities are replaced for the purpose of 'advanced industry transition.'

Advanced industries include national strategic technology commercialization facilities such as semiconductors, secondary batteries, vaccines, displays, hydrogen, and future mobility under the Restriction of Special Taxation Act, as well as new growth engine industrial technologies, advanced technologies, and advanced products.

Additionally, the amendment added regional headquarters that perform support and coordination functions such as sales activities of overseas corporations to the types of businesses that can enter service-type foreign investment zones. Accordingly, rental support will be possible when global regional headquarters enter the domestic market in the future.

Furthermore, to reduce corporate burdens, the amendment relaxed the prior review requirements by the Fair Trade Commission when foreign and domestic holding companies jointly establish a corporation. Currently, all domestic affiliate stocks owned by the jointly invested corporation must be disposed of before the Fair Trade Commission's prior review, but after the amendment, submitting a stock disposal plan will suffice.

The Ministry of Trade, Industry and Energy plans to establish detailed standards for cash support related to foreign investment within this year. A ministry official stated, "We plan to revise the 'Cash Support System Operation Guidelines' to include criteria and limits for cash support such as sales, employment, and investment amounts of foreign-invested companies," adding, "This amendment to the enforcement decree is expected to promote facility investment expansion for the transition to advanced industries such as future vehicles and intelligent information by foreign-invested companies already operating domestically, and to encourage the inflow of global regional headquarters into Korea."

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