LH Launches Full-Scale Project for Korea-Russia Economic Cooperation Industrial Complex in Yeonhaeju

LH Russia Corporation Establishment Passes Management Review, Local Corporation to Launch Business in September
Groundbreaking Ceremony Scheduled for September Eastern Economic Forum, Foothold for Domestic Companies Entering Primorsky Region

Location map of the Korea-Russia Economic Cooperation Industrial Complex in Yeonhaeju.

[Asia Economy Reporter Jo Gang-wook] Korea Land and Housing Corporation (LH) announced on the 17th that it has completed the management review meeting to establish the ‘LH Russia Corporation,’ which will practically lead the development project of the ‘Primorsky Krai Korea-Russia Economic Cooperation Industrial Complex.’

LH plans to establish the ‘LH Russia Corporation’ within July and hold a groundbreaking ceremony in September in connection with the 9th Eastern Economic Forum scheduled to be held in Vladivostok.

The ‘Primorsky Krai Korea-Russia Economic Cooperation Industrial Complex’ is a project to create a 500,000㎡ industrial complex near Vladivostok, Primorsky Krai, Russia, where domestic small and medium-sized enterprises can enter, in accordance with the government’s New Northern Policy. According to the agreement signed with the Russian Far East Development Corporation last December, the ‘LH Russia Corporation’ will lease state-owned land within the Nadezhdinskaya pilot development zone in Primorsky Krai from the Russian Far East Development Corporation, carry out complex construction, and provide it to companies wishing to move in. The Russian Far East Development Corporation will be responsible for installing external infrastructure such as electricity, water, and gas.

The Nadezhdinskaya pilot development zone has an excellent location and is popular among companies due to various tax benefits prepared by the Russian government to attract investment in the Far East region. It is adjacent to the federal highway (A370), the starting point of the Trans-Siberian Railway (TSR), as well as a port and airport. Companies moving into the pilot development zone can also enjoy benefits such as exemption from labor permits for foreign workers and tax incentives.

Previously, LH held four business briefing sessions to analyze demand and surveyed companies wishing to enter Russia. The results showed that companies had the highest intention to enter the Primorsky Krai region. In fact, letters of intent for company entry equivalent to 165% of the paid supply area of the Primorsky Krai Economic Cooperation Industrial Complex have been received, indicating sufficient demand is expected.

Currently, Korean companies such as Samsung, LG, Lotte (Moscow), and Hyundai·Kia (Saint Petersburg) have already entered Russia, and once the LH Primorsky Krai industrial complex development is completed, it is expected to activate the entry of Korean companies into the Primorsky Krai region.

Domestic automobile parts manufacturers, seafood processing companies, and others will receive various benefits such as tariff exemptions when moving into the industrial complex. Tariffs will be reduced according to assembly production and supply locally, and benefits such as tax reductions within the pilot development zone, non-application of foreign worker quota systems, and fishing quota incentives are expected to activate exports to Korea or third countries. This is anticipated to be a good opportunity for domestic marginal companies struggling due to Russia’s finished product tariff increases to grow into thriving companies.

LH plans to proceed smoothly with follow-up schedules to hold the groundbreaking ceremony in September in line with the Eastern Economic Forum. Last September, LH dispatched one resident staff member to Russia to carry out preliminary preparations, and next month, LH’s working group will hold meetings with the Russian government and Far East Development Corporation officials in Russia.

An LH official said, "Since the Primorsky Krai Korea-Russia Economic Cooperation Industrial Complex is a core project of the government’s New Northern Policy, we will swiftly proceed with future schedules such as establishing a local corporation to support the overseas expansion of our companies."

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