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[Asia Economy Reporter Moon Chaeseok] The government announced that by the first half of next year, if two or more companies such as demand companies and parts suppliers that had gone overseas return to Korea, the support scope will be expanded from a 25% reduction in overseas production to a 10% reduction.

The Ministry of Trade, Industry and Energy (MOTIE) announced that on the 23rd at 3 p.m., a non-face-to-face "Industry Meeting for Activating U-Turn" will be held under the chairmanship of Yoo Myung-hee, the head of trade negotiations, to discuss the newly established "collaborative U-Turn" policy.

The meeting will include Head Yoo, Park Jung-wook, Director of Investment Policy, government officials, companies such as Samsung Electronics, SK Innovation, Hyundai Kia Motors, LG Electronics, associations such as the Electronics and Telecommunications Industry Promotion Association, Korea Automobile Industry Cooperative, and support organizations including KOTRA, Korea Land and Housing Corporation (LH), and the Korea Industrial Complex Corporation.

The meeting was organized to share major amendments to the "Act on Support for Domestic Return of Overseas Expansion Companies" (U-Turn Act), the establishment of collaborative U-Turn, and to listen to industry suggestions to reflect them in policies.

MOTIE stated that through three measures this year (February's COVID-19 export measures, June's second half economic policy direction, and July's Materials, Parts, and Equipment 2.0 measures), it attracted 24 U-Turn companies. Fifteen of these were in key industries such as automobiles and chemicals.

The number of U-Turn companies over the previous six years was 20 in 2014, 3 in 2015, 12 in 2016, 4 in 2017, 9 in 2018, and 16 last year.

The newly established collaborative U-Turn involves KOTRA being responsible for supporting the domestic return of overseas expansion companies, the Industrial Complex Corporation managing industrial complexes and supporting domestic return investment subsidies, and LH providing sites such as industrial complexes.

The three organizations will discover candidate companies for collaborative (joint) U-Turn through continuous information sharing. They will provide timely location information by region and industry. Through this, they plan to actively support joint settlement.

Head Yoo stated, "Going forward, we plan to expand customized support focusing on projects with significant economic ripple effects such as collaborative U-Turn, advanced industries, and research and development (R&D) centers."

According to the economic policy direction announced on the 17th, MOTIE plans to relax the overseas business reduction requirement for collaborative U-Turn from 25% to 10% and increase the subsidy support rate by 5 percentage points within the first half of next year.

If two or more companies such as demand companies and parts suppliers return together to regions outside the metropolitan area, they will be recognized as U-Turn companies, and the requirement will be expanded from a 25% reduction in overseas production to a 10% reduction.

Companies mainly requested strengthening incentives for demand companies in collaborative U-Turn. They said they would operate support programs for partner companies such as workforce training and technology development.

Head Yoo said, "The government will actively seek ways to provide incentives such as tax benefits and R&D support to promote collaborative U-Turn."

He requested, "The industry should consider supporting partner companies' U-Turn to stabilize the supply chain, and support organizations should strengthen field-oriented problem-solving and support systems."

MOTIE said it plans to reflect the suggestions raised at the meeting in future subordinate law revisions.

This content was produced with the assistance of AI translation services.