Korea s Economy & Business Environment

Transcription

1 Korea s Economy & Business Environment

2 Korea Trade-Investment Promotion Agency(KOTRA) 1

3 Vision To be a global business platform for the future of Korea Mission To develop the Korean economy and boost national prestige Status Non-profit government organization 2

4 Global Network CIS (9) Europe (21) Middle East (15) China (18) Japan (4) North America (10) Africa (10) Asia & Oceania (20) 122 offices 84 countries Central & South America (14) 3

5 Main Functions Matchmaking Market research & partner search Attract FDI into Korea Trade shows & EXPOs Consulting Support outbound investment of domestic companies Support establishment of foreign-invested companies in Korea Host and support trade/ investment delegations 4

6 The Korean Economy & Its Powerhouse Industries

7 Korea at a Glance Area 100,000km² (108 th ) Population 50 million (24 th ) Main cities Seoul (capital) mil., Busan 3.6mil., Incheon 2.9 mil., Daegu 2.5 mil. GDP (nominal) USD 1.22 trillion (15 th ) ( 13) GDP (PPP) USD 1.60 trillion (12 th ) ( 12) GDP (PPP) per capita USD 33,189 (27 th ) ( 13) Currency Language Exchange rate (as of April 15 th 2014) Korean Won (KRW) Korean 1USD = 1,039KRW, 1EUR =1,436KRW, 100JPY = 1,020KRW, 1CNY = 168KRW Total no. of registered cars 19.4 mil ( 13) Source: IMF, Korea Center for International Finance Ministry of Land, Infrastructure and Transport 6

8 Economic Indicators (USD bn.) (%) Export (USD bn.) Import (USD bn.) Source: IMF, The Bank of Korea, KITA 7

9 Economic Indicators 1, , , , , , , Exchange Rate (KRW-USD) 1, , , , , , International Reserves (USD 100 mn.) 4, , , , , , , , , Government Debt (% of GDP) Rate of BOK s Base Money (%) Source: The Bank of Korea, MOSF 8

10 Trade Volume Trade volume ranking by country in 2013 Jan. to Oct. (Unit: USD billion) China United States Germany Japan France Netherland Trade Volume United Kingdom Korea Canada Italy 3,398 3,224 2,120 1,285 1,027 1, Trade volume between 1957 and 2012 (Unit: USD) $85.7 billion (2008) Source: DOTS $1.07 trillion (2013) $0.46 billion (1957) $28 billion (1996) Source: KITA 9

11 Number of Foreign-Invested Companies 15,831 (as of April 15 th 2014) 1,678 (1990) 3,542 (1997) Source: KOTRA 10

12 Dramatic Change CORPORATE GOVERNANCE A CLOSED SYSTEM AN OPEN SYSTEM WITH MORE VOICES B- AA- (stable) B+ A+ (stable) Ba1 Aa3 (stable) GDP(PPP) PER CAPITA $7,300 (1998) $33,189 (2013) Source: IMF, Korea Center for International Finance 11

13 North Korea : Not an Issue (Unit: USD bil.) 1, , ,067 1,075 GDP Trade volume FDI

14 Big Achiever, Fast Mover Global Innovation Index _BCG Patent Productivity _IMD Steel Plate Producer (POSCO) Most Innovative Country (Bloomberg) ICT Development Index (ITU) Information Technology Skills _IMD R&D Expenditure _IMD Scientific Infrastructure _IMD 13

15 14 Korean Companies in FORTUNE Global 500 in 2013 (14) (104) (57) (167) (206) (235) (252) (225) (239) (271) (427) (365) (426) (447) 14

16 Key Strengths of Korea Global Manufacturing Competitiveness Index th 15

17 Operation Costs Source: JETRO Korea Singapore Labor/HR costs (US$/month) Factory worker: 1,734 Mid-level engineer: 2,255 Manager: 3,249 Factory worker: 1,230 Mid-level engineer: 2,325 Manager: 4,268 Electricity (US$/kWh) Gas (US$/MJ) Water (US$/m 3 ) Land cost (US$/month/m 2 ) Industry use: 0.07 Industry use: 0.13 Industry use: 0.02 Industry use: (Cf US$/kWh) Industry use: 0.01 Industry use: 1.81 Purchase rate: 311~ Rent rate:0.25~ Purchase rate: 209 ~ 1,180 Rent rate: 1.06 ~

18 Mobile Phones 8th 5.9% 1st 36.2% Source: Strategy Analytics (2013) 17

19 Displays 1st 22.9% 2nd 22.1% Source: Displaysearch

20 Lithium Batteries 1 st 21.7% 3 rd 14.2% Source: SNE Researcher (2013) 19

21 Steel Source: World Steel in Figures th 16th 20

22 Automobiles 21

23 Shipbuilding Global Shipbuilding Share (CGT Contracting 2013) China 34% Other 9.6% Japan 11% Korea 45.4% Source: World Shipyard Monitor 2013 West Eminence Drilling Rig by Samsung Heavy Industries 22

24 Information Technology ITU: ICT Development Index Korea - World s best for 3 rd straight year National IT competitiveness index (MIAC*, Aug. 2011) Mobile broadband penetration rate (OECD, June 2011) Digital reading assessment (OECD, June 2011) Internet speed (Fortune, Jan. 2011) e-government index (UN, Jan. 2011) MIAC: Ministry of Internal Affairs and Communications, Aug Global market share of mobile phones / smartphones (2012) 23

25 Semiconductors Memory semiconductor: 66.5% Source: MOTIE, HIS technology (2013) 24

26 Petrochemicals 27.1 Ethylene Production Capacity (2012) (Mn. Tons / Year) World s 4th REFINING CAPACITY USA China Saudi Arabia Korea Japan Germany Source: Korean Petrochemical Industry Association 25

27 Northeast Asia Oil Hub Oil Suppliers Oil Exchange Derivatives Market Oil Traders Tank Terminal Gwangyang Yeosu Ulsan Busan Harbor Infrastructure 26

28 Doing Business in Korea Ease of doing business ranking (185 economies) th 8th 16th 15th 3 rd 4 th 7 th East Asia G20 OECD 27

29 Growing Northeast Asian Market Test-bed market, high-tech, mid-level labor costs Northeast Asian Market CHINA Large market, low labor costs JAPAN Sophisticated market, high labor costs 28

30 Geographical & Logistical Advantages Population 1.52 billion 51 cities with a 1 million+ population within 3 hours Global Population 22% 29

31 Geographic Advantages Shorter by 7000 km and 10 days 30

32 Quick Decision-Making & Implementation

33 World-Class Human Resources Population that has attained tertiary education (Percentage, by year-old age group) Source: Education at a Glance 2013, OECD indicators 32

34 C A Can Do Spirit Nothing Is Impossible

35 Scientific Infrastructure Gross domestic expenditure on R&D Korea ranks No.3 (3.74% of GDP) 2010 or latest available year 2000 or first available year Source: OECD Factbook 2013: Economic, Environmental and Social Statistics 34

36 No. 1 for Patent Activity ETRI stands on top of 2011 innovation Anchor Scorecard by the US Patent Board Current Rank Previous Rank Company Patent Count* Science Strength Innovation Cycle Time Industry Impact Technology Strength Research Intensity 1 2 Electronics & Telecommunications Research Inst. (ETRI : Korea) University of California Industrial Technology Research Institute MIT/Mass Inst of Technology US Navy Stanford University General Hospital Corp. The design 8 6 US DOE California Inst of Technology Fraunhofer Gesellschaft

37 Innovating the World South Korea leads the world in innovation Rank Country Total Score R&D Intensity Rank Manufacturing Capability Rank Productivity Rank High-tech Density Rank Tertiary Efficiency Rank Researcher Concentration Rank Patent Activity Rank 1 South Korea Sweden United States Japan Germany Denmark Singapore Switzerland Finland Taiwan N/A

38 World-Class Logistics Network Well-Organized Highways Incheon Intl. Airport No.1 in passenger service for 6 years Gyeonggi Province Gangwon Province KTX North Chungcheong Province South Chungcheong Province North Jeolla Province South Jeolla Province North Gyeongsang Province South Gyeongsang Province Gwangyang Port Busan Port 5 th largest for cargo handling 37

39 Government Support: FDI Incentives & More Tax reduction Location support Cash grant Other 38

40 Our offer Qualifications Incentives Tax Reduction High-tech status Foreign Investment Zone Free Economic Zone Contribute significantly to domestic economy and technology Income, corporate tax: 100% for 5 Individual type Manufacturing: FDI $30M or more R&D center: FDI $2M or more & 10+ researchers years 50% for 2 years after that Local tax: 100% for 15 years Customs: 100% for 5 years Complex type Manufacturing: FDI $10M or more Income, corporate tax: 100% for 3 years Manufacturing: FDI $10M or more R&D center: FDI $1M or more & 10+ researchers 50% for 2 years after that Local tax: 100% for 15 years Customs: 100% for 5 years Land Support More than 30% of foreign investors stock rate Reduction of rent fee Support for infrastructure Cash Grant More than 30% of foreign investors stock rate Manufacturing: Parts & materials specialty or high-tech status R&D center: New R&D facilities and 5+ researchers 5% to 40% of the foreign investment amount 39

41 FDI Focus Regional HQs R&D High Technology Service Industries 40

42 Business Location Support 989 INDUSTRIAL COMPLEXES 6 FREE TRADE ZONES 79 FOREIGN INVESTMENT ZONES 8 FREE ECONOMIC ZONES 41

43 Free Economic Zones INCHEON CHUNGBUK DAEGU-GYEONGBUK BUSAN-JINHAE YELLOW SEA EAST COAST SAEMANGEUM-GUNSAN GWANGYANG BAY 42

44 Sophisticated Domestic Market GDP (PPP) Per Capita $33,189 (2013) Source: IMF 50M sophisticated consumers Rapidly Growing Purchasing Power 43

45 FTA: Now (61.4%) EFTA Canada EU Turkey USA India Singapore ASEAN Australia Colombia Peru Chile 44

46 FTAs : In the works (90%) EFTA EU Turkey Israel GCC Mongolia China Japan India Vietnam Singapore ASEAN Malaysia Indonesia Australia New Zealand Canada USA Mexico Central America Colombia Peru MERCOSUR Chile In effect or concluded Under negotiation Under consideration 45

47 Invest

48 Korea s FDI Promotion Regime Ministry of Trade, Industry & Energy KOTRA Korea Trade-Investment Promotion Agency Strategic Marketing Global Business Information SME Support 47

49 Organization KOTRA Invest KOREA Office of the Foreign Investment Ombudsman Investment Planning Dept. Investment Promotion Dept. Foreign Investor Support Office (FISO) Global M&A Center Investment Consulting Center Investment Aftercare Division 48

50 One-Stop Service Overseas Network of 42 KBCs (Korea Business Centers) Central Gov't. Local Gov'ts. Pre-Investment Services Investment Services Post-Investment Services Provision of information and administrative services Support for site surveys, partner searches and incentive negotiations Resolve investors grievances / Improve business and living environment Project Manager System Foreign Investment Ombudsman 49

51 Project Manager System Comprehensive Support for Foreign Investors Provide information on markets and industries Assist in plant site selection Help find business partners Provide consultations on FDI incentives Arrange meetings with government officials Provide administrative support 50

52 Project Manager System Foreign Investors Project Managers Central & Local Govt. Business Partners Govt. Agencies Plant Sites 51

53 Red Carpet Service Red Carpet Service for Foreign Investors Site visits Free accommodations Meeting arrangements Transportation, interpretation Airport pick-up & fast-track service 52

54 Global Alliance Project Series (GAPS) GAPs Partners in the Past <Dow Chemical GAPs> Jan. 26,

55 Foreign Investment Week (FIW) Foreign Investment Conference Foreign Investment Partnering 54

56 Job Fair for Foreign-Invested Companies

57 Invest Korea Plaza (IKP) MAJOR SERVICES Secretarial and reception services Dedicated office space Administrative services Target tenants: Venture capital, private equity, hedge fund 40 rooms available Investment Consulting Center (ICC) **24-hour hotline** Officials from the Ministry of Justice, National Tax Service, Korea Customs Service, Courts of Law, etc. Office size: square meters (Size adjustment possible) Rental rate: USD 99/square meter

58 IK Online Join the Invest Korea group 57

59 Thank you 감사합니다