Incentives and tax support should follow to complete Busan as a maritime hub

[Financial News] "Completing Busan as Korea's Maritime Capital can never be achieved simply by relocating a few companies or public institutions. We must create an ecosystem where private companies and talented people with real self-sustaining strength can fully operate on the Busan stage."
The civic group Busan Citizens’ Association for the Love of Busan Port, which is active in Busan, said this on the 1st in a statement titled "20 Policy Recommendations by Civic Groups for Completing Busan as Korea's Maritime Capital." It also offered a series of suggestions on Mayor Chun Jae-soo's No. 1 campaign pledge.
Hangsamo said, "Busan Metropolitan City Government must directly design a bold platform that makes companies come on their own," adding that "world-class maritime cities are offering aggressive incentives at the local government level, beyond national laws, to attract companies."
It argued that Busan Metropolitan City Government should benchmark such bold examples from overseas local governments and present its own incentives that domestic and foreign maritime and fisheries companies cannot help but find attractive.
To encourage companies to move to Busan voluntarily, the city should actively pursue extraordinary employment subsidies, 20 years of local tax reductions, and innovative revisions to the tonnage tax regime covering ship management and maritime IT, it said.
It cited examples of maritime economic capitals abroad, including Washington, D.C. and New York in the United States, Beijing and Shanghai in China, and Amsterdam and Rotterdam in the Netherlands.
In the case of Rotterdam, the Netherlands is rapidly attracting global shipping companies by using strategies such as sweeping corporate tax exemptions, liberalized foreign exchange holding policies, and flexible administrative infrastructure.
China, too, is building one of the world's most concentrated shipping ecosystems by providing bold support for finance, logistics, and shipping companies in Shanghai under the Chinese government's policy of fostering an "international shipping center," it said.
Hangsamo argued that the special law on Korea's Maritime Capital, enacted earlier, is only a framework that outlines the name and basic structure, so efforts should be accelerated to establish the law and fill in its substantive content and tasks.
It said that special administrative and fiscal treatment for Busan, Korea's Maritime Capital, like that granted to Seoul Metropolitan City, is urgently needed. In the case of Seoul Metropolitan City, the Special Measures Act on the Administration of Seoul Metropolitan City recognizes administrative exceptions unlike those for ordinary cities and provinces. A special city is broadly similar to a metropolitan city, but a metropolitan city is subject to supervision by the minister of the relevant ministry only for delegated affairs, while a special city is supervised by the Prime Minister.
It also pointed out that the central government must support the expansion of Busan, Korea's Maritime Capital, as a global city diplomacy hub and the use of intercity networks to promote real regional growth through investment, industry, and talent exchanges.
It added that revising the Local Tax Act is also essential to attract companies through the tax system, narrow regional disparities, and produce fiscal equalization effects.
To make Busan the world's best city for maritime business, it argued that companies headquartered in Busan should be allowed to use accelerated depreciation for owned vessels, and that the tonnage tax regime should be expanded to cover shipowners, ship management firms, and maritime IT companies.
If that happens, not only domestic companies but also foreign shipping lines will consider establishing business bases in Busan. It said that upgrading the shipping accounting system to international standards through the accelerated depreciation system is an essential task for the future of South Korea's shipping industry.
Hangsamo added, "Policy finance alone cannot meet the financial demand of the maritime capital region," and "we need to build a financial ecosystem in which private capital naturally flows into the maritime industry, and we need institutional mechanisms that allow policy finance institutions to share risk with one another and with private financial institutions."
The policy recommendations also included fostering BNK Financial Group's specialized maritime finance bank and ensuring that the Mayor of Busan, treated as the head of a special maritime capital city, attends Cabinet meetings chaired by the president.
[email protected] By Byeon Ok-hwan Reporter