April 27, 2024

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This is the third of three articles on Korea’s free economic zones -- Editor.


[THE INVESTOR] Last month, the Korean government announced plans to boost its seven free economic zones over the next decade.

First introduced in 2003, FEZs are specially designated areas to provide sound business and living environment for foreign firms.

The government hopes to attract companies in industries with high demand to lure foreign investors in selected sectors and raise the profile of new growth engines.

Among the seven FEZs, Daegu-Gyeongbuk FEZ and Chungbuk FEZ are the only inland FEZs.

DGFEZ, located in the heart of Korea’s largest automotive cluster and a center of IT, health care and steel industries, is shifting its focus to IT convergence, cutting-edge technologies and medical services.

“We are overcoming our limits as an inland FEZ with joint ventures,” said DGFEZ Commissioner Lee In-son. “If foreign firms form partnerships with a Korean company, they can easily enter the market while lowering business risks. I’m doing my best to attract JVs that can benefit from better technology and human resources in the region.”

Companies with foreign investment of 10 percent or more are recognized as foreign-invested entities here.

DGFEZ has eight projects -- International Fashion District, Sinseo Medivalley, Gyeongsan Industry District, Daegu Technopolis, Suseong Medical District, Yeongcheon Industry District, Yongcheon High-tech Park, Gyeongsan Knowledge District and Pohang Fusion Tech District.

Korea’s second inland FEZ is in Chungbuk -- a city 128 kilometers southeast of Seoul. It is a logistics center, with access to the Seoul metropolitan area in one hour, and other parts of the nation in two hours. 

Chungbuk Free Economic Zone CBEFZ

The FEZ also plans to become an inland aviation hub attracting overseas investors by developing Cheongju Aeropolis. It hopes to lead Northeast Asia’s aviation maintenance, repair and operations industry, with a 153,000 square-meter aviation maintenance complex and 321,000 sq.m aerospace industrial complex to be developed by 2020.

The Chungbuk FEZ is also developing Osong Bio Valley, home to more than 60 biotech firms and 120 related research centers and three universities specialized in the industry. It can offer one-stop support for all stages in the field, from clinical trials to approval, manufacturing and retailing. 

The companies can also take full advantage of the excellent ICT infrastructure, which centers on the semiconductor industry, a vital part of the aircraft component sector, according to the CBFEZ authorities.

Korea’s leading companies that have already started operations there include SK hynix, MagnaChip and Dongbu HiTek. Designated as a special photovoltaic zone, the first in Korea, it produces 60 to 70 percent of photovoltaic cell modules here.

By Park Ga-young (gypark@heraldcorp.com)