The government has raised the cap on subsidies for companies investing in less-developed balanced development areas and industrial crisis response zones to 30 billion won. The Ministry of Trade, Industry and Energy said on Feb. 9 it revised the notice on the Local Investment Promotion Subsidy and will implement it from Feb. 10.

The Local Investment Promotion Subsidy is a programme under which the central government and local governments jointly provide support equal to 4 to 50 percent of investment for companies relocating from the Seoul metropolitan area to regions, or making new or expanded investment in regions. From 2004 to 2025, it投入 274.39 billion won into 1,596 companies. It induced about 36.3 trillion won in investment and employment of about 81,000 people.

Under the revision, the subsidy cap for investment in less-developed balanced development areas and industrial crisis response zones is raised to 30 billion won per case and per company. Previously, the cap was 15 billion won per case and 20 billion won per company, the same as for upper and mid-tier balanced development areas. Large companies relocating to those areas, as well as small and mid-sized firms making new or expanded investment, will also receive location subsidies covering part of land purchase costs.

For investment using AI-related technologies, the equipment-subsidy rate will be increased by 2 percentage points. Eligible investments are those using detailed technologies in the AI field designated as national strategic technologies under the Restriction of Special Taxation Act, including generative AI technology, agent AI technology, advanced learning and inference technology, and low-power AI computing technology. The recognised scope for investment in worker-environment improvement facilities such as dormitories and convenience facilities will also be expanded to 20 percent from 10 percent of equipment investment.

The limit on investment periods will also be eased. If investment is delayed for unavoidable reasons such as an electric vehicle chasm, the investment period can be extended once, up to 1 year and 6 months, after review. The maximum investment period will be increased to 5 years from 3 years and 6 months. An application to extend the investment period must score 60 points or higher in a feasibility evaluation to be submitted to the review committee.

Rules restricting resubmission of subsidy applications will also be improved. Even if actual investment falls short of the original plan due to cost reductions from technological innovation, a company can immediately resubmit without a 1-year waiting period if the review committee recognises it as a justified reason. Previously, if the investment or employment achievement rate was below 70 percent, resubmission was restricted for 1 year even if unavoidable reasons were 인정받았다.

The ministry said it plans to overhaul the system so that support becomes thicker the farther a region is from the Seoul metropolitan area. It also plans to pursue additional revisions to the notice to support RE100 industrial complexes and the 5-pole 3-special strategy. The revised notice will apply to subsidy applications filed from Feb. 10, and companies can apply for subsidies to the ministry through the local government with jurisdiction over the investment area.