Most Foreign-invested Companies Based in Seoul Area

The overwhelming majority of foreign-invested companies operating in Korea have their headquarters or main facilities in the Seoul metropolitan area covering the capita, Gyeonggi Province and Incheon.

The concentration of foreign firms around Seoul continued under the former Roh Moo-hyun administration despite its emphasis on balanced regional development.

This was according to a Knowledge Economy Ministry report on foreign-invested companies between 2000 and June this year submitted to lawmaker Lee Jong-hyeok of the ruling Grand National Party yesterday.

The ministry is promoting measures to attract more foreign direct investment, such as holding expos not just in Seoul, but also in Busan in November.

In June, the number of foreign companies in the country’s 16 major cities and provinces was an estimated 15,549.

Seoul had the most such companies with 9,257 or 59.5 percent, and if those in Gyeonggi Province (2,748) and Incheon (1,044) were combined, the figure for the capital region grew to 13,049 or 83.9 percent.

The remaining 13 major cities and provinces including Busan and the Gyeongsang provinces had 2,500 foreign companies, less than that of Gyeonggi Province alone.

In 2000, 81.8 percent of foreign-invested companies were based in metropolitan areas, a figure which rose to 82.7 percent in 2002, 83 percent in 2003 and 83.7 percent at the end of last year.

The ministry said a superior living environment such as healthcare and foreign schools was behind the concentration of foreign companies around the capital, not to mention a better business climate including infrastructure and employment.

To deal with the problem, the ministry will designate free economic zones for foreign direct investment in non-metropolitan areas, and increase support for infrastructure to facilitate foreign investment such as roads and electricity.

One official said, “There’ve been growing calls from foreign companies to help recruitment in the provinces. We are trying to resolve this issue by holding job expos for foreign-invested companies in the provinces.”

Due to the financial turmoil stemming from the United States, foreign direct investment in Korea fell 2.6 percent to 2.87 billion dollars in the third quarter year-on-year, the first drop in 15 months.

cha@donga.com