S Korea's Jeju Island Woos S'pore Investors

Source : The Business Times, April 29, 2009

Projects range from tourist port to healthcare town

HOWEVER you see it, Jeju is prime property on the world map. Just a two-hour flight from five other major Asian cities - Seoul, Beijing, Shanghai, Hong Kong and Tokyo - the island is three times the size of Singapore and boasts three Unesco World Natural Heritage sites.

To top it off, Jeju is also Korea's only self-governing province - a special designation that allows it to offer visa-free entry to foreigners and tax exemptions to investors.

These pluses could spell intense investment competition for the likes of Singapore. But on the flip side, there can be enticing opportunities.

At an investment seminar here yesterday - hosted by members of Jeju Special Self-Governing Province, Jeju Free International City Development Center (JDC) and Korea Trade-Investment Promotion Agency - representatives outlined many core investment prospects waiting to unfold on Jeju to an audience of Singapore companies.

Among six core projects is a 190-hectare theme park that encompasses a Water Park. Jeju island is also home to eight foreigner-only casinos, with more on the way.

'If you think of Universal Studios, you can easily imagine what Water Park is like,' said Rio Kim, project manager at JDC, a public corporation affiliated with Korea's Ministry of Land, Transportation and Maritime Affairs.

The other core projects include a healthcare town, a high-tech science complex, a tourist port, a global education city and a resort type residential complex.

Projected to cost a total of almost US$5 billion, the six projects will develop Jeju's tourism, education, medical and high-tech industries.

In particular, the US$1.8 billion resort-type residential complex, invested in by Malaysian conglomerate Berjaya, is the biggest single foreign investment in South Korea's tourism industry. Berjaya's investment in Jeju does not stand alone. Despite the global downturn, the island has secured a total of US$3 billion worth of investments in 20 months.

Part of Jeju's success can be attributed to an incentive-loaded investment package that applies equally to Korean and foreign investors.

Investments of more than US$5 million, for instance, can qualify for full corporate and income tax exemption for three to five years, depending on the investment scale, as well as shortened approval procedures by a one-stop administration service division.

Beyond tax incentives, Ko Sung Kyu, executive director of JDC, highlighted project quality and profitability as key elements attracting foreign investors. 'We can provide global standard tax incentives, but investors are more concerned about project concept and profitability,' he said.

To Singapore companies in the audience, 'strong government support for foreign investments is a plus factor', said Mr Kim.