Industry ministry eases rules for returning overseas manufacturers

The industry ministry said Tuesday that a revised enforcement decree will make it easier for manufacturers operating overseas to be recognized as returning Korean companies, widening the criteria beyond a direct match between what they make abroad and what they would make at home. The change, approved at a Cabinet meeting, takes effect Nov. 23.

The revision relaxes the so-called identity requirement, under which a company's overseas and domestic operations had to produce the same or similar products or services. Under the new rules, similarity can be recognized even when the products or services differ, if core technologies, functions and supply-chain connections are considered together.

The government also widened the exemption from the requirement that companies liquidate, sell or scale down their overseas operations. Previously, only companies holding certificates for technologies or products in advanced-industry or supply-chain fields could skip that restructuring step. Now a company without such a certificate can qualify if it invests in a core manufacturing facility — a so-called mother factory — in Korea, subject to review by experts. Companies that ran manufacturing abroad can additionally be recognized for returning if they establish or expand a corporate research institute in Korea.

The revision follows a plan announced May 29 to redefine and promote the return of overseas operations.

The government also reorganized the committee that supports returning companies, chaired by the industry minister, creating an advisory panel to gather expert opinion and tightening how candidates are evaluated and subsidies reviewed. Support criteria were adjusted to account for company size and the region of investment.

The ministry said it will carry out the changes without disruption and seek to attract quality returning companies, focused on advanced industries and supply chains, to raise domestic investment and core manufacturing capacity.