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Gyeongbuk-do visiting companies for reshoring as a vital sub 상세내용
- Gyeongbuk-do visiting companies for reshoring as a vital sub
- 등록일2020-06-22 14:57:01
◦ In line with the government’s policies, Gyeongsangbuk-do announced that it would provide full support, including relocation sites and facilities/equipment, to returning overseas (reshoring) Korean firms.
◦ Gyeongbuk Province is preparing various support measures to meet the relocation demands of reshoring companies following the collapse of manufacturing and supply chains because of the COVID-19 pandemic and trade disputes between the United States and China.
◦er the “Act on Assistance to Korean Offshore Enterprises in Repatriation” (U-Turn Act) that was amended on March 11, Gyeongsangbuk-do plans to prescribe matters concerning the special use of state property to provide supportive actions, such as (1) private contract rewarding and long-term (50 years) factory site leasing, (2) rental fee reduction, and (3) priority occupancy in state-owned lease complexes.
◦ The province will also increase the budget to help reshoring firms build smart factories that can reduce labor costs, which are the main U-turn barriers, and secure price competitiveness.
◦ Moreover, Gyeongbuk is planning to revise related regulations to provide financial aid to large companies, whose facility investments in the province have exceeded the KRW 10 billion state-fing limit, as they are highly influential in attracting related industries.
◦ A lease-only complex will be created within Pohang Blue Valley Industrial Complex to give first occupancy rights to reshoring companies, while Gumi’s fifth industrial complex will be designated as another relocation site for U-turn companies. These complexes will help reduce the burden of raising necessary relocation fs in the initial domestic investment phase.
◦ In addition, the move provides attractive incentives and grants to returning companies that wish to purchase land along with their facility investments.
◦ Gyeongbuk Province targets labor-intensive automobile, machinery, and electronic part manufacturers returning from China and visits their parent companies located in and out of the province to attract overseas subsidiaries with a full support package.
◦ For the first time in the country, a briefing session with Korean parent companies on reshoring their overseas subsidiaries into Gyeongsangbuk-do was held in 2019.
◦ In cooperation with the Ministry of Trade, Industry and Energy (MOTIE) and the Korean Trade and Investment Agency (KOTRA), regional meetings with Happy Monitor, a communication channel for large automakers and firms that have relocated in the province, were also held to promote reshoring.
- Some concerns regarding the proposal were raised, including the firms’ need for public support following the strain on the labor market because of minimum wage hikes, 52 hr workweek regulation, and the financial sector’s difficulties in raising fs.
◦ Gyeongbuk Province ranked third in the country by attracting nine reshoring companies from 2014 (the year the U-Turn Act was enforced) to 2020.
*The nation drew a total of 71 reshoring companies (17 in Jeonbuk, 12 in Busan, and 9 in Gyeongbuk).
◦ MOTIE considers a firm as “reshoring” only if it has liquidated, transferred, or reduced production volumes by 50%. This requirement is now mitigated by lowering the 50% threshold to and has supplemented the system for reshoring firms by reducing corporate and personal income taxes for up to seven years.
◦ “We plan to implement all measures to promote reshoring and provide preferential support to returning firms in their R&D, relocation, and smart factory construction projects to ensure seamless relocation and business resumption,” Gyeongbuk Governor Chul-woo Lee said. “We will keep on communicating with entrepreneurs to ensure that our reshoring policy can generate a healthy outcome.”