IFEZ Aims to Be
Business-Friendly Hub
of Northeast Asia

Has attracted 37 investments worth $36.8 billion

The Incheon Free Economic Zone Authority (IFEZA) is turning to a new paradigm designed to develop a free economic zone into a business center of Northeast with advanced ubiquitous functions.
The following are the excerpts of an interview with IFEZA CEO Lee Hwan-kyun in celebration of the third anniversary since the establishment of IFEZA.
Question: What measures are you taking to raise the global standing of Songdo New International City, which lags behind international archrivals, in celebration of the third anniversary of the establishment of the Incheon Free Economic Zone Authority (IFEZA)?
Answer: IFEZA is devoting all administrative efforts to accelerate its urban development to cope with competition that heats up among rival cities to gain the lead of being the economic hub of Northeast Asia.
Our authority is attaching priority into building a foundation for attracting investments by pushing ahead with leading projects as well as reclamation and infrastructure projects without a hitch.We are striving to create a next-generation digital city paradigm by realizing a business hub of Northeast Asia and constructing the world's first ubiquitous-city.
In an effort to differentiate itself from rival cities, the Incheon Free Economic Zone (IFEZ) is adopting three strategies ― construction of a state-of-the-art informatization city, the world's foremost "intelligent"one furnished with ubiquitous systems.; a pleasant, environmental-friendly city with the forested area accounting for 36 percent of the total area; and a city with the introduction of such advanced new transportation systems as bus rapid transit. IFEZ is throwing its heart and soul into building a quality city through urban landscape management and public infrastructure construction and management.
Q: Will you elaborate on infrastructure expansion projects like the construction of Incheon Bridge and expansion of Incheon International Airport and what spill-over effects they will bring about?
A: Construction of Incheon Bridge, a key infrastructure facility in the IFEZ area, is currently 31 percent complete with its dedication slated for 2009. The planned Incheon International Airport Railway is scheduled to open for traffic in March 2007, and projects like the expansion of Incheon International Airport, construction of the planned second Seoul metropolitan ring road, straightening of Gyeongin (Seoul-Incheon) Expressway and construction of the planned 3rd Geyongin Expressway go smooth.
The completion of transportation facilities in the Seoul metropolitan area will not only give better access to Seoul and all cities in the Seoul Metropolitan area, but also expedite foreign investments and a variety of projects.
So far, motorists have to travel via Incheon International Airport Expressway, located north of the Seoul metropolitan area, to reach the international airport, causing inconveniences to people coming from Incheon City and southern parts of the metropolitan area.
The completion of Incheon Bridge will remove such inconvenience, thus reducing by 40 minutes the time motorists'travel from southern parts of Seoul to the international airport and improving national competitiveness.
Q: Will you explain the geopolitical advantages and foreign investment environment IFEZ enjoys and investment incentives?
A: Incheon is a geographically optimum place to serve as a hub city of Northeast Asia like Hong Kong and Singapore. Incheon is in close proximity with China and has 51 cities, each with a population of more than 1 million within a distance of a 3.5 hour-flight from Incheon International Airport. In particular, Incheon has optimum conditions for establishing a bridgehead of promoting inter-Korean exchanges as it is closer to the vast market of the Seoul Metropolitan area with a population of some 22 million as well as the Gaeseong Industrial Complex in North Korea. Making the most of these geopolitical advantages, the IFEZ is striving to realize a goal of constructing a free international city of the 21st century to make it a Northeast Asia hub of business,
logistics, information technology, bio-technology, R&D and leisure.
Secondly, IFEZ has an airport and sea port infrastructure. Incheon International Airport, which ranks first in the global aviation service, third in cargo and in the top 10 passenger handling ranking, and the 120 year-old Incheon Port have been expanded or refurbished to offer comprehensive sea & air logistics systems.
Thirdly, IFEZ has proximity to high-tech manufacturing complexes in Incheon and Seoul metropolitan area as well as a potential of connection with front and rear industries. It has an advantage of securing IT/BT and other high-tech manpower at ease.
If we capitalize on its advantages and graft our financing, technology, R&D and Hallyu, or Korean Wave and develop a public consensus on making it a success, we are confident that IFEZ can leap into a top-class business hub of Northeast Asia, surpassing China in terms of an environment conducive to foreign investment.
IFEZ offers foreign occupant companies such diverse tax benefits like a three year exemption from national and provincial taxes and 50 percent reductions in the next two years; exemption of seven surcharges except surcharge on development, and exemption of customs on imported capital for three years.
The free economic zone provides financial support in creating sites for rent to foreign firms, a reduction in land rents, establishment of amenities for foreigners and key infrastructure like roads.
It also offers such incentives as relaxation of restrictions put on companies in the Seoul metropolitan area, and exemption of such obligations as monthly paid leaves, business arenas exclusively reserved for SMEs, and mandatory hiring of the physically handicapped and elderly.
Q: Will you provide the details of the current status of FDIs the IFEZ has attracted?
A: Despite internal and external difficulties in attracting foreign investments, the IFEZA signed a total of 37 agreements worth $36.8 billion as of September.
It inked 14 contracts worth $15.4 billion, including the ones with Gale, Celltrion, GM Daewoo Motor and Gudel AG; 11 MOUs worth $12.7 billion, including the ones on an international school, a logistics center, a Yonsei University campus and 151-floor Incheon Tower; and 12 letters of intent (LOI) worth $8.7 billion, including the one on a logistics center with DHL.
Q: Would you introduce mid- and long-term strategies designed to attract foreign investments?
A: The IFEZA continues to overhaul a variety of restrictions to make projects a success, while developing cooperative ties with relevant organizations. It is seeking to change or revamping the following in a bid to attract investments from domestic and foreign companies.
It is demanding an expansion of the scope of offering national budget subsidy, now limited to some infrastructure like roads,; a raise in subsidy amounts from 50 percent to 70 percent; and fully subsidizing state projects as the one designed to straighten the Gyeongin Expressway.
The IFEZA is asking for the delegating of the authorities to permit changes in development plans and approval of implementation plans so that it can offer one-stop services.
It is seeking to make sure that the exemption of foreign companies from restrictions in the Seoul metropolitan area should be equally allowed to domestic companies and the duration of tax benefits given to foreign companies be extended.
The IFEZA is requesting allowing the tax incentives for foreigners'investment area ― a 100 percent exemption of corporate and income taxes for five years to would-be investors in the free economic zone.
It has been put into operation diverse IR programs for attracting foreign investments, depending on target nations, corporations and individuals. The IFEZA participated in an IR session for attracting investments into the logistics field in Atlanta and BIO 2006 in Chicago in the first half of this year and MIPIM Asia held in Hong Kong in the second half where it set up its own pavilion with the goal of raising its international profile and publicizing the free economic zone. It plans to hold IR sessions on such diverse sectors as culture/tourism, logistics, IT and BT.
Q: Would you explain the current status and future plans to attract such amenities as schools and hospitals catering to foreigners'needs?
A: The IFEZA is striving to create an environment for making foreign residents lead a comfortable life and feel comfortable away from home. It has attracted the world's top-class medical and educational institutions to provide education and health care to the children of foreign residents.
Songdo International School, which broke ground last March, will open in September 2008 as one of the bested education institutions in Korea and Northeast Asia, furnished with advanced facilities.
New York Presbyterian Hospital, one of the top seven hospitals in the United States, has been selected as the preferred bidder of an international bid to attract a foreign hospital. The 600-bed hospital will be put into operation in 2008 together with the opening of the 120,000-best Central Park and ecological garden.
Besides, the IFEZA is endeavoring to create a business-friendly environment for foreigners as it has implemented such steps as the expansion of financial transaction benefits and use of English as a common language.
Q: Will you give the details on the current process of a strategy designed to develop the IFEZ?
A: The master plan of the development of the IFEZ calls for creation of the best business center of Northeast Asia with the best attractive business environment and living conditions where global companies freely make investments and conduct business.
The IFEZ is comprised of three areas ― Songdo, Cheongna and Yeongjong ― encompassing 63.33 million best or 208.9 million sq. meters, equivalent to 70 times as large as the size of Yeouido. With a projected population of 487,000, the IFEZ will cost 14.7 trillion won in infrastructure projects during a period between 2003 and 2020 ― the first phase between 2003 and 2008 and second phase between 2009 and 2020.
First, take a look into a plan to develop the 16.11 million-best Songdo district into International Business Center and IT/BT and other high-tech industrial city.
During last year, the convention center, residential-commercial use buildings and Incheon Bridge broke ground, while the Songdo International School Project was launched last March. Projects like the planned 65-story Asia Trade Center, Central Park, a luxury hotel, an ecological garden, office buildings, residential complexes and a foreign hospital are scheduled to break ground. A new world-class port project is planned to make it an international logistics center.
The IFEZA is developing the Yeongjong area encompassing Incheon International Airport into an aviation/logistics center. The area covering 41.84 million best or 138 million sq. meters will be developed into a self-sufficient city with such functions an international tourism, aviation/logistics, industry and residential housing.
The Cheongna District, covering 5.38 million best or 17.75 million sq. meters, will be developed into an international tourism/ leisure center. It will house the projected Asian Village, a theme park, golf courses, a floricultural complex, and GM Daewoo Motor's R&D Center. nw

An artist conception of the planned 151-floor twin Incheon Tower in New Songdo City.

IFEZA CEO Lee Hwan-kyun

(From above) An inaugural ceremony of UN APCICT; An opening ceremony of u-IT Cluster on Sept. 6; A ground-breaking ceremony of New Songdo City International School; A structure is transported by a barge to the construction site of Incheon Bridge.