Kunsan Free Trade Area to Be Established in 2003

The international free trade area will be established in the land of 385,000 pyong in Kunsan city, Jeonbuk province in 2003. The government plans to exempt the rent for 10 years to the foreign companies that will invest more than 10 million dollars, or invest in the machinery or automobile business in this free trade area.

The Ministry of Commerce, Industry and Energy (MCIN) announced yesterday that it is planning to establish the international free trade area for the manufacturing, physical distributing, trading, and financial companies in Kunsan in order to promote the development of south-west region.

Lee Hee-Bum, the vice-minister of the MCIN, said, ``The government confirmed the establishment of the Kunsan free trade area, by accepting the request of Jeonbuk provincial government, and then through the examination of the appropriateness of the request performed by the Korea Institute for Industrial Economics and Trade (KIET) and the Korea Development Institute.`` And he also declared, ``The government plans to lure the machinery and automobile industry companies, which were selected as the regional strategic industries, with priority.``

For this project, the MCIN, already allocated 57.4 billion won, such as 32.7 billion won for land purchase and 24.7 billion won for incidental facilities, in the next year`s national budget, and plans to secure 85.8 billion won from the national budget in 2003.

The Kunsan free trade area will be established in Gunjang national industrial complex, Osikdo-Dong, Kunsan city, with the total investment of 186.7 billion won.

The Korea Land Corporation, which is in charge of the development, is now working for the reclamation and the basic facilities, and will start factory construction from next July.

The MCIN decided to exempt ten years rent for the foreign companies, which invest more than 10 million dollar, which have over 30 percent of foreigners` equity and invest more than one million dollar, and which invest in the machinery or automobile business. And the ministry will charge low monthly rents for other foreign companies (40 won/m2) and for the domestic companies (80-320 won/ m2) depending on their export portion.

Moreover, the ministry made a decision on the seven-year tax exemption and next three-year 50 percent tax reduction, including the national and local taxes of corporation, income, and property taxes, for the manufacturing, high technology, and industrial supporting service companies that invest over 30 million dollar and employ more than 300 workers.

The free trade areas are established in Masan city, Kyungnam province (240,000 pyong) and Iksan city, Jeonbuk province (90,000 pyong), and there are 110 companies, including 51 foreign companies.

Kim Sang-Chul sckim007@donga.com