By Kang Seung-woo

The government is offering an improved package of incentives to lure foreign investors into free economic zones (FEZs).

The Ministry of Knowledge Economy announced Wednesday that at least 10 percent of the land in each free economic zone will be allocated to foreign companies, with rental fees to be reduced by 75 percent to even 100 percent, depending on the size of the investment. The rent period will also be extended up to 50 years.

In addition, the government plans to provide more services and support, including tax relief for foreign investors in the free economic zones.

For example, in its bid to attract foreign commercial medical institutions, they will allow doctors and nurses who acquire their licenses overseas to work in these special zones.

The government named three regions _ Incheon, Busan-Jinhae and Gwangyang Bay _ in 2003 and it added three more areas _ Yellow Sea, Daegu-North Gyeongsang Province and Saemangeum-Gunsan _ in 2008, with the goal of turning Asia’s fourth-largest economy into a hub in Northeast Asian logistics.

“It is true that the free economic zones are not appealing to foreign investors and domestic companies due to regulatory barriers,” said a ministry official.

“The government will scrap the remaining regulations and offer more incentives to attract more foreign investments,” he said.

The government has poured 85.4 trillion won ($71.31 billion) into the six FEZs but they drew only $2.73 billion in foreign direct investment between 2004 and July 2010, representing just 3.7 percent of the $73.6 billion total during the same period.

The development of the regions, scheduled to be completed by 2020, has progressed up to around 30 percent.

Throughout the world, the number of free economic zones has been on an upswing. The number was tallied at 79 in 25 countries in 1975. In 2008, the number rose to 2,301 in 119 countries, with 43 percent of them located in the Asia-Pacific region.