Foreign companies investing in the fields of semiconductor, display and secondary batteries, which are part of South Korea's national strategic technology, will now be able to receive government subsidies for up to 50% of their investment sum. It is a government incentive to attract high-quality foreign investment.
According to the Ministry of Trade, Industry and Energy on Wednesday, the revised cash support plan, which was reviewed and approved by the Foreign Investment Committee on the same day, includes provisions that would raise the cash support rate for foreign companies investing in 15 national strategic technologies, including semiconductors.
Previously, only investments in R&D centers or national strategic technology fields could receive up to 50% cash support. However, from now on, the range of support was expanded to include national strategic technologies.
Although national strategic technology and national advanced strategic technology include the same industries such as semiconductors, secondary batteries and displays, their target technologies are different.
The laws on which these support measures are based are also different, with national strategic technology governed by the Special Taxation Limitation Act and national advanced strategic technology governed by the National Advanced Strategic Industry Act.
The Ministry of Trade, Industry and Energy also decided to increase the government's share of funding for national strategic technologies by 10 percentage points. Accordingly, if the investment is made in the Seoul metropolitan area, the national and local government's funding ratio changes from 40:60 to 50:50, and if the investment is made outside the metropolitan area, the ratio changes from 70:30 to 80:20.
The pre-evaluation system will also be revised to enable foreign investors to predict the possibility and scale of cash support during the investment review stage. The pre-evaluation system will be applied first to national strategic technologies and national advanced strategic technologies, as well as investments of less than $5 million.
In addition, the criteria for construction investment that is eligible for cash support will be relaxed to provide subsidies for the vertical expansion of factories to increase the floor area or for the installation of new equipment in idle areas of existing buildings.
Write to Sul-Gi Lee at surugi@hankyung.com
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