BIFC. Busan International Finance Center June 4, Whang Sam-Jin, HEAD of BIFCPC

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1 BIFC June 4, 2015 Whang Sam-Jin, HEAD of BIFCPC

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4 The 2 nd City in Korea The Greatest Port in Korea Population (2014) Area (2012) GRDP (2012) 3.5 million ( 6.9 % ) 766 km² ( 0.8 % ) USD 59 billion ( 5.0 % ) B u san South- Eastern Area 8.0 million ( 15.7 % ) 12,347 km² ( 12.3 % ) USD 215 billion ( 18.0 % ) S t r e n g t h s * Figures in parentheses are percentage of national total 4

5 Origin & Destination of New Silk Roads in 21C B u san S t r e n g t h s Now, developed multimodal transport system (Sea-Air-Land) Crossroad on North American Route, European Route Future, Transcontinental Railways (TSR, TCR, TMR) And Arctic Route : sailing period shortened by 40% - Rotterdam : 24 Days 14 Days 5

6 World s 5th Container Port, Free Economic Zone New Port with 23 berths (45 berths by 2020), Port with 22 berths B u san -Jinhae Free Economic Zone, global business cluster S t r e n g t h s Logistics centers in the hinterland 6

7 Cluster of Shipbuilding, Mechanical & Automobile Industry B u san S t r e n g t h s In the world, 1 st shipbuilding (Over 30% of world s orders) In Korea, 91% of shipbuilding, 38% of automobile, 36% of mechanical industry Supply base of parts and materials in Korea 7

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9 B I FC O v e r v i e w World s 5 th container port World s top 6 shipbuilders nearby Largest fishery trade market in NEA Headquarters of KRX Located - Developed derivatives market Maritime Hub Derivatives Hub 9

10 VISION Financial Hub City - Specialized in Maritime & Derivatives B I FC GOALS Maritime : Market share 0.12%( 09) 20%( 20) Derivatives : Recover 1 st rank in the world (exchange trading), Rank 3 rd in NEA (OTC trading by 2020) O v e r v i e w PLANS Step by Step (NEA Market Global Market) Competitive Advantage (Ship finance, Derivatives, Backoffice) Establish Infrastructure for Financial Hub (Network, Environment) Enhance Financial Hub Image 10

11 B I FC Period: 2009~2014 Facilities: a 63-story Tower, and 3 independent premises Location: Munhyeon Area Land Space: 102,352m 2 Height: 289m Tenants (2015.5) 24 financial firms (public and private) O v e r v i e w 2 nd Phase Development Plan is ready to start now 11

12 Division Total Headquarter Regional Headquarter Branch Public Firm Private Firm Bank B I FC Asset Management Guarantee /Insurance O v e r v i e w Infra Institution, etc Total

13 Marine Consolidated organization of maritime finance parts of three Korean poliy FIs. ( KEXIM, KDB, KSURE ) Total outstanding of maritime finance by the 3 policy FIs as of the end of 2013 is around USD 60 billion, or more than 90% of the Korean total B I FC Korea Shipping Guarantee New insurance company established in December 2014 O v e r v i e w Ship Management Companies 3 ship management companies relocated into the BIFC This maritime cluster will lead commercial banks to increase their maritime finance. 13

14 Ranked 24 th in GFCI 17 by the Z/Yen Group In the GFCI 17(March 23, 2015), ranked 24 th among the world s 82 financial centers. B I FC O v e r v i e w Among others, ranked 3 rd following Shanghai and Singapore of the centers, which financial experts consider likely to become more significant in the next few years. 14

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16 Corporation Tax Exemption (new comers except for relocation within Korea) 100 % exemption for 3 years 50% exemption for 2 consecutive years Supporting Plans I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t I n f r a Financial Support (new comers including relocation within Korea) Entrance subsidy: 50% of the cost to purchase land or building or rent them (limit : 5 billion won) excluding branches Employment subsidy: Up to 600,000 won per person (limit : 200 million won, 6 months) Training subsidy: Up to 600,000 won per person (limit : 200 million won, 6 months) Business facility installation subsidy : Up to 10% of the cost (limit : 1 billion won) 16

17 Foreign Financial Organizations Description Types Targets Establishment of HQ/ Regional HQ Establishme nt of Branch Relocation of HQ/ Regional HQ within Korea Relocation o f Branch wit hin Korea Corporate Tax/ Income Tax Property Tax Acquisition Tax Financial institution with an investme nt of over 2 billion KRW and more th an 10 regular workers (Overseas >) 100% tax exemption for 3 years from the first ta x year when the first income is made, 50% for th e next 2 years 100% tax exemption for 3 years from the first da te when tax liability is formed 100% tax exemption for acquired property withi n 15 years from establishment date of business (Other place >) Not applicable Not applicable Not applicable Entrance Subsidy Financial institution which establishes Regional Headquarters managing mo re than 3 countries, or Headquarters Up to 50% of the expenses to pur chase land or buildings or rent(up to 5 billion Won per institution) Not applicab le Up to 50% of the expenses to purchase land or buildin gs or rent(up to 5 billion Won per institution) Not applica ble Employment Subsidy Education/ Training Subsidy Financial institution with more than 1 0 regular workers for the last 3 mont hs Financial institution with training for more than 1 month to recruit more t han 10 Korean employees Up to 600,000 Won per new employee after movement to BIFC (for up to 6 months, up to 200 million Won per institution) Up to 600,000 Won for education/training per new employee after movement to BIFC (for up to 6 months, up to 200 million Won per institution) Business Facility In stallation Subsidy Financial institution with more than 1 0 regular Korean employees Up to 10% of the expenses required for installation of business facilities (up to 1 billion W on per institution) 17

18 Cooperative working system to assist in approval / permits Supporting Plans Metropolitan City Financial City Promotion Financial Supervisory Service etc. I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t And provides personal guidance services I n f r a Residential, medical and educational services, etc. 18

19 Supporting Plans I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t I n f r a Gimhae Airport Serve 694 flights a week to 31 cities in 11 nations Construction of new int l airport is under discussion 19

20 Access to... KTX station is located near BIFC Supporting Plans I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t I n f r a Connected to urban expressways Convenient transportation system : Buses, Subways, Taxes, etc. 20

21 Supporting Plans I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t I n f r a 5 foreign schools in operation : Japanese School, Chinese School, School of, etc. 11 special-purpose high schools and 1 self-independent school 22 universities and Friedrich-Alexander University Campus 21

22 High-quality medical service Within 5km of the BIFC - 6 university hospitals - 1 public hospital and 9 general hospitals Supporting Plans I n c e n t i v e s A d m i n i s t r a t i v e S u p p o r t Plan for medical facilities - Construct international medical complex center I n f r a 22

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