Korean gov’t rushes to ease labor, tax regulations to become investment hub

2024.04.03 09:12:57

[Photo provided by The Ministry of Economy and Finance]이미지 확대

[Photo provided by The Ministry of Economy and Finance]

The South Korean government is expected to accelerate efforts to ease labor, tax, and digital regulations to position the country as an investment hub that houses the Asia-Pacific headquarters of global enterprises.

“We will not be complacent with the efforts made in improving 186 economic penalty regulations since the inauguration of the Yook Suk Yeol government,” said Choi Sang-mok, deputy prime minister and minister of economy and finance. “We will accelerate further improvements.”

Choi’s remarks were made during a meeting with members of the American Chamber of Commerce in Korea (AMCHAM) in Seoul on Tuesday.

Choi Sang-mok, deputy prime minister and minister of economy and finance이미지 확대

Choi Sang-mok, deputy prime minister and minister of economy and finance

“We will strive to create an investment environment that meets international standards through relentless regulatory reform,” he said, noting that the government is reviewing measures to improve labor flexibility based on social dialogue and is also making efforts to enhance predictability in tax enforcement and ease digital regulations.

AMCHAM Chairman James Kim called for aggressive regulatory reform, saying that many global companies are interested in Korea as a candidate to establish their Asia-Pacific headquarters.

Last month, AMCHAM released a report, proposing a reform in Korea’s regulation and administrative service. Challenging elements for Korea in attracting global companies include digital regulations, low labor flexibility, and high corporate tax rates.

AMCHAM, however, noted in the report that there is a high possibility for many global companies to relocate their Asia-Pacific headquarters to Korea if the country overhauls regulations that do not suit the global standard.

A recent survey conducted by AMCHAM on 800 member companies showed that Korea was the second preferred location after Singapore for their headquarters in the Asia-Pacific region.

AMCHAM emphasized that Korea has the potential to become Asia’s business hub as many companies are shifting away from China amid the geopolitical tensions between the United States and China.

By Han Sang-heon and Han Yubin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]