Busan has been made the largest free trade port in South Korea, after more territory was added to the existing Busan-Jinhae free economic zone (FEZ) in the country’s busiest container port.
The Ministry of Oceans and Fisheries (MOF) announced on 6 April 2020 that the container terminals of Busan New Port, and the adjacent hinterland, would be included in Busan-Jinhae FEZ. This will mean that the new Busan-Jinhae FEZ, which was originally designated in 2003, will have a total area of 12.2 million square metres, including the 2.83 million square metres from Busan New Port.
In the FEZ, tenants get perks such as subsidised rental and preferential corporate taxes, while a flat income tax rate is offered to the CEOs of the foreign companies that set up offices there.
Busan New Port’s expansion will add a further 15 berths to increase its container capacity to 15.8million TEU as Busan harbours ambitions of becoming the world’s second largest container transhipment port.
Currently, Busan-Jinhae FEZ has more than 30 tenants, including several foreign-South Korean joint ventures, such as Hanjin-Kerry Logistics and KCTC & NYK Logistics.
The MOF hopes that expanding the FEZ will attract another 35 tenants, helping create at least 2,500 jobs and adding KRW580 billion (US$476.64 million) of investments.
It is working with the Ministry of Strategy and Finance to determine the rental of the units in the new FEZ area.
Particularly, in line with the government’s plan to revitalise port hinterland, part of the FEZ will be designated for consignment processing.
MOF’s Director-General of Shipping and Logistics, Kim Jun-Seok, said, “It’s expected that Busan Port will become a global logistics complex and industrial base through expanding the FEZ. We will do all we can to contribute to the revitalisation of the economy.”
Martina Li
Asia Correspondent
