More generous subsidies will seek to stimulate foreign investment in the country. Shown is the Counterfeit Notes Response Center at Hana Bank headquarters in Seoul's Jung-gu District. (Yonhap News)

By Gil Kyuyoung

Foreign investors this year will get more public support like higher cash and tax benefits as part of a government plan to boost foreign investment and raise the nation's international credibility.

Acting President Choi Sang Mok, who is deputy prime minister and minister of economy and finance, on Jan. 2 announced these measures as part of the plan 2025 Economic Policy Direction at an extended meeting of economy-related ministers at Government Complex-Seoul.

His ministry said the cap on cash subsidy support for foreign investors will be permanently raised five to 20 percentage points. This means a foreign company that invests in domestic research and development centers for national high-tech strategic industries and the regional headquarters of global companies can receive subsidies covering up to 75% of their invested amounts.

Expanded tax benefits include the extension of exemption periods up to seven years for tariffs on imported capital goods and special consumption and value-added taxes.

Qualifying for a separate quota for opportunity development zones, foreign investment in areas outside of the Greater Seoul region get lower income and corporate taxes for five years during the startup period and a 75% slash in acquisition taxes for plant expansion.

A priority support program for foreign companies is also planned, and the launch of a fund to stimulate foreign investment is under consideration. Such companies can also expect lower interest rates and higher limits on loans at the same levels or higher of "U-turn companies," or those who move production facilities back to Korea.

gilkyuyoung@korea.kr