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FKCCI Advocates for Foreign Business Interests at KCCI's '2024 Foreign Chamber Day'

On January 24th, the French-Korean Chamber of Commerce and Industry (FKCCI) took part in a Roundtable Meeting held by the Korean Chamber of Commerce and Industry (KCCI) and chaired by KCCI’s Chairman Chey Tae-Won, in the presence of representatives of the Chambers of Commerce of 10 countries and a representative of Invest Korea.  

The Foreign Chamber Day is designed as a platform where representatives of Foreign Chambers in Korea can voice their opinions and offer suggestions on how KCCI and the Korean government might better support foreign businesses. As KCCI celebrates its 140th Anniversary, the Chamber is committed to enhancing its cooperation with foreign-invested firms and their respective Chambers in the future.  

The FKCCI, represented by Mr. David-Pierre JALICON, CEO of D.P.J. & Partners Architecture and Chairman of the FKCCI, advocate for the interests of the French business community in Korea, especially regarding the Offset policies and Cash Grant accessibility for foreign companies in Korea. 

 


Insights  

 Despite challenges like supply chain disruption, geopolitical risks, and regulatory obstacles, Korea remains an attractive investment destination. Along with exports, foreign investment represents one of the two major pillars that provide great vitality to Asia’s 4th-largest economy. Last year, South Korea foreign direct investment reached a record high of $32.72 billion in 2023 according to the MOTIE, hitting the $30 billion milestone for two consecutive years.

The discussion highlighted the importance of foreign investments in driving global industrial competition. Most foreign chambers emphasized the need for Korea to enhance efforts in becoming Asia's leading regional headquarters by offering diverse incentives and deregulating the market. Foreign business leaders suggested that Korea could attract more global renewable energy and healthcare companies by providing higher financial incentives and easing regulations. They proposed advancing renewable energy systems, enacting laws related to wind energy, and increasing cooperation in emerging industries like biopharmaceuticals. Therefore, they recommended strengthening partnerships in climate change and digital economic cooperation, while suggesting improvements in approval-related regulations and the service sector.  

 

 

FKCCI’s Grievance Cases & Suggestions 

Gash Grant

The distribution of the Cash Grant within the framework of Foreign Direct Investments (FDI) between the National and Regional levels remains a relevant topic of discussion, as acknowledged by the KOTRA during the roundtable meeting that was held in December 2023. Indeed, as emphasized previously, obtaining cash grants from local and national authorities in Korea is a complex process as it is decentralized, lengthy and costly. Recognizing the complexities involved, the FKCCI advocates for the creation of a centralized desk that consolidates information and streamlines procedures, ultimately simplifying the acquisition of these cash grants. With a growing interest in French investments across various sectors in Korea, including mobility, semiconductor, sustainable energy, and chemicals, the streamlining of cash grant acquisition processes becomes a pressing concern. A query was posed by the FKCCI Chairman regarding the anticipated timeline for progress on the matter, with the aim of establishing a more predictable system. 

 

Offset Trade Support 

In consideration of South Korea's offset regulations, the requirements imposed on foreign defense contractors as prerequisites for securing defense contracts are regarded as stringent. Some of these requirements involve the necessity to procure at a high percentage from local companies without any decision power in the selection of the supplier, resulting in various adverse effects, such as escalated contract prices intended to mitigate offset risks, which, in turn, may lead to the failure to secure bids and affect the overall cost competitiveness of the company's products or services in the global market. To prevent this situation, the FKCCI respectfully requests the government to consider the elimination or the reduction of local procurement obligation. French businesses in Korea hope for a deregulation of the offset policy administered by the DAPA (Defense acquisition program administration). As South Korea’s and France’s economies are nowadays comparable in size, with GDP of USD1.72 trillion and USD2.78 trillion respectively, an offset policy seems irrelevant.  

“I believe that foreign investments have become a new force driving global industrial competition, especially in high-tech industries. … the management activities and policy suggestions of foreign companies can serve as barometers for upgrading our economy to global standards,” KCCI Chairman, Chey Tae-won 

In conclusion, the recognition of foreign investment as pivotal for Korea's economic advancement and global collaboration underscores the shared concerns expressed by Chairman Chey and foreign chambers. With a commitment to facilitating communication, KCCI aims to serve as a platform for foreign chambers of commerce, fostering dialogue, addressing global issues collectively, and strengthening cooperation with foreign-invested firms and their respective chambers.

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