Following my designation in February as a Gyeonggi Province FDI Advisor (For more information: Post #1, Post #2, Post #3), I was invited to become an advisor to the Gyeonggi Association of Foreign-Invested Companies[EXPIRED LINK REMOVED: https://www.gafic.co.kr/], too. This organization, based out of Pyeongtaek in south Gyeonggi, is funded by the Gyeonggi Province government, member company dues and fee-based services. Its purpose is to provide support to the foreign-invested companies of Gyeonggi Province and it is an honor for me to serve as an advisor to the Association.
Here is a copy of the Letter of Commission which I was awarded at the directors’ meeting:
The directors’ meeting was held at the Ramada Plaza Hotel in Suweon but I had travelled down to Pyeongtaek a couple weeks before on March 24 in order to meet Secretary General Jake Kim at the GAFIC office to find out directly from him about the work of the Association. Here are some of the notable facts I learned in my meeting with him.
- There are something like 800 foreign-invested companies with a presence in GyeongGi Province. Of these, roughly 1/3 are Japanese, 1/3 American and 1/3 European-invested.
- When I asked why the GAFIC website has not been translated to English, Secretary General Kim explained to me that even though the member companies are foreign-owned, most are run by Korean management teams.
- Even though most member companies are managed by Koreans, there are still a number of Korean production sites which have foreign heads and the Association offers Korean lessons, Korean culture field trips and other services from time-to-time to these non-Koreans staff.
- The Association provides services to GyeongGi Province-based foreign-invested companies regardless of their membership status with the Association. Many of these services are free and often involve interfacing with the Provincial Government bureaucracy to resolve issues unique to foreign-invested companies.
- There are a half-dozen or so industrial complexes designated for foreign-invested companies in Gyeonggi Province and they are mostly concentrated in the southern region near Pyeongtaek, which explains why the GAFIC office is located there, too.
- The federal and provincial governments offer a number of incentives to foreign-invested companies that set up a manufacturing presence in these designated industrial complexes. To qualify as a foreign-invested company requires foreign ownership of 10% or more (which was a lot less than I would have expected).
- The vast majority of the foreign-invested companies in Gyeonggi Province are suppliers to the Korean chaebol, such the automobile factories of Hyundai/Kia, the LCD display production of LG and the semiconductor operations of Samsung. Very few (if any!) of these companies are selling directly to Korean consumers or non-chaebol companies.
- I found it interesting to learn that once the US-Korea Free Trade Agreement (KORUS) is passed, Gyeonggi Province is expecting an influx of Chinese-owned companies. This is in order for them to take advantage of tariff loopholes in KORUS. Currently, there are very few, if any, Chinese companies of note in Gyeonggi Province.
The Directors’ meeting which I attended on April 7 was actually three meetings in a row. I had not realized this in advance, but I learned a lot of helpful information about business in Gyeonggi Province by sitting through the entire four-hour event.
- The first meeting was held to sign an MOU between GAFIC and the Ramada Plaza Hotel agreeing to special rates and conditions for GAFIC members. The Ramada Plaza Hotel is the only five-star hotel in Gyeonggi Province and I got the feeling even non-members, if introduced through GAFIC (or me!), could get those discounts on a case-by-case basis.
- We then met with representatives of Invest KOREA, which is the agency under KOTRA charged with promoting foreign investment into Korea as a whole. Several GAFIC members were in attendance, asking for help from the Invest KOREA representatives in solving issues unique to foreign-invested companies. One of the main issues what what a foreign-invested company should do with its facilities when it wished to withdraw from Korea; if those facilities were not easily movable off of the zones designated only for foreign-invested companies, then they could not often find a buyer.
- Next, over a catered dinner by the hotel, the directors and advisors of GAFIC discussed ways to assist the foreign-invested companies in Korea.
- Finally, we got a tour of the Ramada Plaza Hotel. (Click here for photos of the suite where Former US Vice-President Al Gore stayed last year when he attended a conference on the environment in Gyeonggi Province.)
Secretary General Kim and the GAFIC team are ready to help. If you want information about GAFIC, you can reach the team through the GAFIC website. Or if you wish to do things in a bit more Korean way, contact me and I would be glad to introduce you directly.