Designated a free economic zone in October 2003, the Gwangyang Bay Free Economic Zone has unlimited potential to become a global logistics hub with an unrivaled transportation network, a world-class industrial infrastructure, incomparable living conditions, and business friendly environment featuring a variety of attractive deregulation and support policies.
GFEZ is comprised of five districts, each with its own mission in the overall development. Each of the districts has its own development agenda, with the first phases well under way and ongoing through 2011. They comprise: Gwangyang District (Logistics), Yulchon District (Manufacturing), Sindeok District (Residential), Hwayang District (Tourism) and Hadong District (Multi-purpose). Since its establishment in 2003, the GFEZ Authority has been able to attract a total of 6.5104 trillion won worth of investments from approximately 80 companies (59 local, 31 foreign), creating 17,165 new jobs, which has given a tremendous boost to the growth of the regional economy.
In particular, the active participation of the 31 foreign investors (38% of total investment) has established a bridgehead for GFEZ to serve as international business hub. It has attracted total 2.5938 trillion won from 31 foreign investors, and commercial traffic in Gwangyang Bay Area has also grown from 1.19 billion to 1.81 million TEU (53% increase), which has played an important role in the economic growth of Jeollanam- do.
Despite its relatively short duration of operation, GFEZ has been acting as a center of the economy of Jeollanam- do, as well as activating the economy of the east side of Korea.
In an interview,Mr. Choi Jong-man, Commissioner of Gwangyang Bay Area Free Economic Zone Authority, talks about his strategies to attract more foreign investors.
>>GFEZ has been designated as a Special Economic Zone, along with Busan and Incheon, by the Korean government. By offering special incentives for the foreign companies who invest, its strategy is to attract more investors and to contribute to the development and prosperity of the regional economy.
Gwangyang Port, thanks to the two-port system, has already been consolidated with industrial bases such as Gwangyang Steel Mill and Gwangyang Port Container Terminal even before the establishment of GFEZ. For this reason, with Gwangyang as a center, GFEZ was established aiming to become a global hub dealing with industry, leisure, education, and logistics.
Of course, attracting foreign investors and logistic companies is essential; however, it is also important to be accompanied with cooperation of Korea-based companies and activation of regional industry. GFEZ will focus on increasing container traffic as well as developing its strong manufacturing and high-tech industries.
>>All administrative procedures, ranging from investment advice to the start of the business will be handled by the GFEZ Authority, ensuring more convenient business start-up. A range of subsidies will also be provided once the company satisfies certain requirements, helping cutting costs and maximizing profits.
GFEZ offers far-reaching tax incentives and some areas may also enjoy the benefits of a free trade zone. For the foreign companies located inside the FEZ and free economic zone developers, 100 percent of tax exemption for national tax; tariffs, corporate tax, income tax, and local tax; acquisition tax, registration tax, property tax is offered.
Three years exemption of corporate tax, income tax, acquisition tax, registration tax, property tax, and comprehensive land tax for foreign companies that make a pre-qualified investment in manufacturing or logistics, and 50 percent reduction of all these taxes for an additional two years will be provided for foreign investors in Gwangyang Port Free Trade Zone (8.88).
Gwangyang Port Free Trade Zone also offers exceptionally low rental fee; 30 won/ per month for preferential rent and 200 won/ per month for basic rent. 28 companies including Samsung Tesco, SNNC, and Korea Express are the current tenants residing in the free trade zone.
>>GFEZ, mainly in Gwangyang and Yulchon District, is focusing on steel-making materials and non-ferrous metals, new and advanced high-tech materials, IT, compound and chemical product manufacturing, metal works related manufacturing.
In Hwayang District, it is aiming to develop as a great tourist destination to complement Korea’s southern coast tourism belt by attracting and building a unique place-golf-courses, spa resorts, shopping malls, and hotels- that combines beauty and the needs of tourists.
In Sindeok District, mainly Sindae Hinterland, is planning to develop a new residential, educational, and recreational town with international schools, marina facilities, hospitals, condominiums, townhouses, shopping centers, and top of the line amenities by 2011.
GFEZ expects 20 educational institutions and universities to be established within this zone. In this regard, Korea’s first fully foreign owned and accredited branch school, the Shipping & Transport College (STC-K) of the Netherlands, is already providing educational degrees to local and international students at their campus in Gwangyang Port.
In the matter of building medical facilities, foreigners or corporate bodies designed to provide medical services to foreigners under commercial law, and companies of which 50 percent or more is owned by foreign investors are allowed to establish medical centers and pharmacies within the district. Moreover, GFEZ offers the tenants of educational or medical institutions to use its land for free of charge.
>>First, GFEZ has the best geographical conditions and unrivaled transportation network to become a maritime transshipment cargo hub. It is located between China, Japan, and Russia and close to many major Northeast Asian ports including Shanghai, Hong Kong, Osaka, and Kaohsiung.
Domestically, there are four airports close to GFEZ: Yeosu, Gwangju, Muan, and Sacheon. Currently, three expressways, eight national roads, and eighteen regional roads are directly connected to GFEZ. Especially Jeonju-Gwangyang expressway is expected to be completed by 2010, which will cut driving time to Seoul to 3 hours. Besides, GFEZ is linked to two national railway lines; the Jeolla Line (North-South) and the Kyungjeon Line (East-West). Also, GFEZ has direct access to two industrial railways, the Gwangyang Line for steel transportation and the Yeocheon Line mostly for petrochemical products.
Second, GFEZ possesses the optimal infrastructure necessary for industrial activities. Nature gas for industrial production is planned to be supplied through pipelines across the GFEZ. Also, GFEZ has abundant water resources to fully meet its needs. Three rivers; the Seomjin, the Youngsan, and the Tamjin Rivers, as well as three dams; the Juam, the Suyeo, and the Tamjin Dams, are adjacent or within the area. Moreover, its stable electric power supply and environmental waste water supply make GFEZ as incomparable to the other free economic zones in Korea.
Lastly, combined with its abundant resources and geographical advantages, GFEZ makes it possible to secure the supply of materials, manufacture, and import at one-stop. This is a huge advantage compare to other free economic zones in Korea, considering convenience and cost-benefits.
>>Gwangyang Bay Free Economic Zone has excellent labor force and industrial infrastructure. While considering the advanced economic levels of Japan and China, they may seem to bring profits for short time, however, their high wages and expenses cannot be comparable to GFEZ in the long-term.
As the commissioner, I will continue to find better ways for GFEZ to become the best business-friendly Free Economic Zone in the world as well as in East Asia.
To do so, GFEZ will try to sign more MOUs with foreign investors by hosting a meeting with ambassadors, diplomats, and business leaders. Also, I strongly urge the potential investors to visit Gwangyang and experience its beautiful natural resources and attractive conditions.