Seoul to provide one-stop support to attract foreign investment

Seoul Mayor Oh Se-hoon, left, speaks during a discussion session with Jeffrey Jones, chairman of the American Chamber of Commerce in Korea's Board of Governors, organized by The Korea Times and the city government at City Hall, Sept. 27. Korea Times photo by Choi Won-suk

Mayor Oh vows to turn capital into Asia's financial hub

By Bahk Eun-ji

Several Korean administrations have long sought to turn Seoul into an Asian financial hub, but the capital has been losing its attractiveness as an investment destination due to a wide range of factors, including strict regulations, an unattractive tax regime and the inflexible labor market.

Feeling a sense of urgency to shift strategies, Seoul Mayor Oh Se-hoon, who took office in April, has vowed to create a foreigner-friendly environment by offering a full range of support services ranging from housing to education to attract more financial talent and foreign capital to the capital.

Turning Seoul into a leading financial hub of Asia is a core part of his Seoul Vision 2030, Oh's master plan for the city government's policy direction over the next decade, unveiled a month ago.

He believes that to increase the capital's financial competitiveness, improving Seoul's attractiveness as a destination friendly to foreign workers and businesses is the most crucial. Using London, New York, Hong Kong and Singapore not only as role models but also as competitor cities, Oh said the city government will set up the Invest Seoul Center dedicated to this goal next year.

Modeling after the Government of Singapore Investment Corporation (GIC), it will be an organization in charge of all plans and procedures to attract domestic and foreign investment.

“The Invest Seoul Center will be a city-level body specializing in investment tailored to Seoul,” Oh said in a discussion session with Jeffrey Jones, the chairman of American Chamber of Commerce (AMCHAM) in Korea's Board of Governors, organized by The Korea Times and the Seoul Metropolitan Government, at City Hall, Sept. 27.

Seoul Mayor Oh Se-hoon speaks during a discussion session with Jeffrey Jones, chairman of the American Chamber of Commerce in Korea's Board of Governors, organized by The Korea Times and the city government at City Hall, Sept. 27. Korea Times photo by Choi Won-suk

“Based on the characteristics and strengths of Seoul, it will oversee all processes from pre-work to increase Seoul's charm as a city to invest in, to the establishment of investment plans, contact with companies, activities to induce their investment and support for the companies' activities here,” Oh said.

Cities seeking financial hub status have been already operating city investment agencies, such as Singapore's GIC and Economic Development Board (EDB), Hong Kong's InvestHK and Britain's London & Partners, the mayor added.

“Seoul, where about half of Korea's foreign direct investment (FDI) is concentrated, has needed such an agency for a long time. [Setting up the Invest Seoul Center] is rather late,” Oh said.

Seoul City plans to set up the agency next year and make it an affiliate of the city government in 2024.

Oh was Seoul's mayor from July 2006 to August 2011, and was re-elected in a by-election in April. Seeking another four-year term in local elections to be held next June, one of the mayor's goals to achieve by 2030 is to revive Seoul's urban competitiveness. He said financial competitiveness is key to that goal, because a city where people gather, businesses gather, and money flows, and technologies and information are concentrated will revitalize the economy and create jobs.

Unfortunately, Seoul's financial competitiveness has declined considerably over the past decade, according to the mayor.

Jeffrey Jones, chairman of the American Chamber of Commerce in Korea's Board of Governors, attends a discussion session with Seoul Mayor Oh Se-hoon, organized by The Korea Times and the city government at City Hall, Sept. 27. Korea Times photo by Choi Won-suk

“I made all-out efforts to make Seoul a good place to invest during my former term between 2006 and 2011, and the ranking of its financial competitiveness rose from 50-somethings to sixth. However, it fell again, especially sharply since 2016, and has remained around 20 to 30.”

There are two main reasons for the decline in Seoul's financial competitiveness, he said: a lack of vision and strategy to lure global financial institutions to the capital, and the central government's regulations-centered policy that has blocked the inflow of companies, information and technologies.

At a time when the global financial market has been seeing fundamental changes due to the United Kingdom's Brexit decision in 2016 and Hong Kong's democracy protests in 2019, cities around the world have been competing desperately by improving their business environments, and offering exceptional corporate and income tax reduction incentives, but Seoul failed to join these moves, he said.

“Many of my efforts to increase Seoul's financial competitiveness during my former term in the mayoral office were reduced or abolished after I left. I decided to revive the policy direction.”

Oh emphasized that this policy direction is aimed at creating a living environment favorable to foreign nationals here by minimizing language barriers as well as offering better access to education and housing.

“During my term, I designated Yeouido as a global zone, offered all administrative services in English and offered city-rented apartments, but these policies were scrapped. The number of international schools also decreased,” he said. “During this term, I'll expand spaces for foreigners to use as offices, increase financial support for financial institutions that are newly settling here, and offer more housing and international schools for foreign residents.”