SOUTH KOREA AIMS TO REDUCE RED TAPE FOR INVESTORS

SOUTH KOREA AIMS TO REDUCE RED TAPE FOR INVESTORS

South Korea on Monday pledged to loosen the bureaucratic stranglehold on foreign investment and unveiled a blueprint for a new era of economic stability and growth fueled by overseas capital.

The measures, announced after a workshop hosted by President Kim Young- sam, will relax current restrictions on foreign land ownership, foreign exchange transactions and approvals necessary to do business in South Korea.Finance Minister Hong Jae-hyong told the meeting foreigners investing in the manufacturing sector would, from next March, be allowed to buy land without prior Finance Ministry approval. But land purchases for residential purposes would be limited to 200 pyong (660 square meters), Mr. Hong said.

He said foreigners investing in the high-tech sector would be allowed to raise all of their capital investment overseas and tax rates for non-listed companies in which foreigners have a stake would be cut.

Restrictions on purchases of Japanese machinery, which are permitted only when foreign-invested companies make fresh investment or raise capital, will be relaxed.

Mr. Hong said foreigners would get approval on investment applications within 10 days, compared with a current delay of 30 days.

Imports of technology, other than those related to the defense and ultra high-tech sectors, would no longer need to be reported to the government, he said.

Mr. Hong said his ministry would free 17 out of the 30 business sectors where South Korean companies are restricted from overseas investment.

A Finance Ministry official said the sectors involved included textile manufacturing, retailing and wholesaling and real estate operations.

He said the ministry planned to expand foreign exchange loans by up to 10 percent and ease restrictions on the issuance of overseas securities.

Trade Minister Kim Chul-su said he would allow traders to ship commodities worth up to $20,000 without registration with the government, up

from the current $10,000 limit.

The textile industry, a former giant now declining in the face of low-cost competition from abroad, would be subject to a high-tech transformation and marketing activities overseas would be stepped up.

South Korea's already-flourishing steel industry would diversify into special steels. Car production and shipbuilding capacity would be enhanced with the help of the government, according to the economic blueprint.

The Agriculture Ministry announced plans to improve its marketing capacity in overseas markets and the Construction Ministry said it would improve financing packages for South Korean firms with overseas building contracts.