Government’s decision gives green light to attracting foreign educational institutions
The Korean government said it plans to allow foreign educational institutions located in Jeju special self-governing province and free economic zones to establish joint campuses with Korean partners. In addition, international schools in Jeju Global Education City (JGEC) will be allowed to pay dividends on their retained earnings.
This move is expected to help foreign educational institutions accelerate their efforts to establish overseas branches in Korea. The government plans to provide a different level of financial support to foreign educational institutions depending on their international evaluation results and research achievements. Currently, under the Special Act on Jeju Free International City, retained earnings generated by international schools should be used by the schools, so the distribution of dividends is prohibited.
In addition, joint venture international schools will be allowed in places like JGEC in Jeju. Currently, foreign schools are only allowed to open and operate international educational facilities on their own, and are banned from paying dividends or distributing retained earnings.
The Ministry of Education believes that these restrictions prevent the reasonable distribution of investment returns, posing an obstacle to attracting elite foreign schools to Korea along with foreign direct investment.
“When Jeju international schools are allowed to distribute their retained earnings and dividends, not only will investment flow, but also interest in the establishment of for-profit educational institutions will rise,” said Kim Han-wook, Chairman of Jeju Free International City Development Center (JDC).
Meanwhile, Chairman Kim, at the 4th trade and investment promotion meeting, proposed that international schools in Jeju be allowed to distribute their retained earnings and pay dividends to advance educational services by facilitating the establishment of local branches of foreign educational institutions and attracting more foreign investment, thereby enhancing the nation’s competitiveness by reducing the outflow of foreign currency stemming from sending young children overseas to study and produce global talents.
With President Park Geun-hye presiding over the meeting at Cheongwadae on December 13, 2013, the government finally decided to modify its investment promotion policies with a focus on the improvement of medical, employment, and local government regulations.