Seoul commits $204 mn to attract foreign-invested firms by 2026

Foreign-invested enterprises (FIEs) to be set up in Seoul, South Korea from 2022 will receive increased incentives and reduction in office rent, according to the city’s Asia’s Financial Hub Seoul plan announced on November 11. The plan is a five-year project from 2022 to end-2026 to invest 241.8 billion won ($204.4 million) in new FIEs to be based in Seoul.

Aiming to strengthen the competitiveness of Seoul as a financial hub by attracting offices of overseas financial firms, the project focuses on four areas: building an ecosystem for financial industry growth; increasing capabilities of the digital financial industry; improving foreign-invested businesses; and intensifying branding of Seoul as a financial center.

Particularly, the city of Seoul will expand incentives for FIEs such as increasing employment subsidies from the current 50 million to 200 million won per company. Also, the office rental support for areas the city designates as foreign investment zones will be increased from the current 50% to up to 75%. 

The city will add 30,000 square meters to the current Seoul International Finance Office in Yeouido, Seoul's central financial district. Established in October 2020, the office is located in the International Finance Center of Yeouido to attract financial institutions from Korea and abroad while providing companies with offices and more than 70% of rental and maintenance fees for up to five years. The city also plans to create its second fintech companies accelerator in 2022 and a center to support firms with digital finance-related services by 2025.

Also, Seoul will separate the current foreign investment promotion center from Seoul Business Agency in 2024. This is to intensify the center's roles to find foreign investors and nurture new FIEs.  

Seoul Mayor Oh Se-hoon has ambitiously announced the city's aim to become Asia’s largest fintech hub by 2030. Expecting foreign direct investment to increase from the current $10 billion (as of the third quarter of 2021) to $30 billion by 2030, the city plans to attract more than 100 foreign financial institutions by that year. Currently, there are around 150 foreign financial institutions based in Seoul.   

Write to Ji-Eun Jeong at jeong@hankyung.com
Jihyun Kim edited this article.