National Assembly Budget Office: "84 Companies Returned to Korea in the Last 7 Years... 22,000 Established Overseas"

[Asia Economy Reporter Kim Eun-byeol] Over the past seven years, more than 22,000 new corporations have been established overseas through foreign direct investment, but only 84 companies have returned to Korea. Although the government has introduced various policies such as tax reductions and subsidies to support the return of overseas enterprises, significant results have not been achieved.

According to the report "Analysis of Major Policies Related to Domestic Returning Companies" published by the National Assembly Budget Office on the 23rd, since the full implementation of the "Act on Supporting the Return of Overseas Enterprises (U-Turn Act)" in 2014 until September last year, 84 companies were recorded as having returned to Korea. A total of 93 companies were selected as domestic returning companies, but among them, 7 went out of business and 2 withdrew their return plans.

During this period, the number of new corporations established overseas through foreign direct investment reached 22,405, making the proportion of domestic returning companies compared to new overseas corporations only 0.4%.

By company size, among domestic returning companies, there was only 1 large enterprise, 11 mid-sized companies, and 81 small and medium-sized enterprises. By country of expansion, China accounted for the largest number with 71 companies, followed by Vietnam with 8, and the Philippines with 2. By industry, the electronics sector had the highest share at 20.2%, followed by jewelry (15.5%), automobiles (14.3%), metals and footwear (each 9.5%), machinery (8.3%), chemicals (7.1%), and textiles (6.0%).

The total investment plan of domestic returning companies was 1.2477 trillion KRW, and the total employment plan was 3,242 people.

The report evaluated that "despite continuous announcements of related policies until recently, the performance of domestic returns remains low compared to foreign direct investment," and suggested that "it is necessary to consider improving domestic return policies related to large enterprises to expand actual domestic return achievements." When large enterprises returned, 5 accompanying companies returned together, and the investment plan scale of these 6 companies, including 1 large enterprise, accounted for one-third of the total investment plans of all returning companies.

The report also emphasized that "it is necessary to broaden and diversify the recognition of domestic returns and to revise the system to focus on actual domestic investment and employment expansion rather than merely reducing overseas business sites."

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