More Export Financing
The Ministry of Strategy & Finance announced on April 7 that it would expand the export financing assistance of the Export-Import Bank of Korea from four trillion won to at least 10 trillion won between this year and 2020 in order to better help firms in the new industry sectors including the bio industry.
It also mentioned 20% to 30% tax credits for third-phase clinical trials with regard to the development of rare disease drugs.
These days, the South Korean government is looking to step up its support for fledgling industries such as the bio sector at a more rapid pace. This is because South Korean enterprises’ capital expenditures and R&D investments are on a rapid decline as of late and this could have a negative impact on their future growth potential.
Specifically, their capital expenditures increased by 5.3% between 2014 and 2015 but decreased by 6.8% between last year and this year. Likewise, the rate of increase in their R&D investments fell from 5.4% to 1.5% between 2014 and last year. Under the circumstances, the South Korean government is focusing on the bio industry as a breakthrough.
The ministry is also planning to work on tailored financial products and make use of the bank’s Hidden Champion Program to nurture and help bio firms settle in. The Hidden Champion Program, which is to assist in small firms’ overseas business expansion, provides incentives such as higher credits limits and prime rates.