Repost from Yahoo:
Clement, I would like to address an issue you raised in post #2851.
<TPP will however have a legislative advantage in their sector of the world because of government encouragement and local political intervention.
Let's talk about the corporate tax incentives offered by the Polish government versus South Korea (applicable due to possible JV with Hyundai).
Poland's corporate tax rate for 1997 was 38%. That drops by 2% a year until year 2000. ALL BUSINESS ENTITIES IN POLAND ARE SUBJECT TO THIS CORPORATE TAX. Interest and dividends are subject to a 20% tax.
By contrast, "to encourage foreign investments accompanied by the introduction of high technology in Korea", effective April 1, 1995, qualifying foreign-invested enterprises are EXEMPT from corporate income tax (and withholding tax on dividends) beginning in the first profit-earning year and extending the following FOUR years.
Then, there's a 50% tax reduction period for THREE years. (applied to these brackets: 17.6% for taxable income up to W100 million, 30.8% for over W100 million).
Finally, in addition to the tax exemption on corporate income tax and dividend withholding tax, such foreign-invested enterprises are EXEMPTED from property taxes, acquisition taxes and land taxes at 100% for the first FIVE years and at 50% for the next THREE years.
TALK ABOUT "GOVERNMENT ENCOURAGEMENT"! Does TTRIF qualify for this GIVEAWAY?!... "to encourage foreign investments accompanied by the introduction of high technology in Korea". I think so. I invite all to follow the following link, which outlines cases eligible for tax exemption or reduction
nca.or.kr
Or this one...
accesskorea.com:80/investax.html
The above link specifies the seven high-tech industrial areas:
1-electronics, information and electrical
2-precision machinery and advanced processes
3-new alloys and industrial metals
4-new materials and biological industry
5-optical and medical equipment
6-aerospace and transportation
and most importantly...
7-environment and energy
However, the EXCITING part is...
<as a leading developing country, Korea is ready to cooperate with other developing countries to transfer its environmental technologies and to share development experience.
The above is taken from the following link describing Korean's "Action Plan"...
moenv.go.kr
Korean's economy is bigger than the ASEAN countries combined (Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Viet Nam), even though ASEAN has SEVEN times the population of Korea! Korea wants to take this business model (and hopefully the tax incentives) and champion it through out Asia!
I know...International TTRIF/Hyundai haven't signed contracts...yet.
IMO, TMP's will be built first where most economically compelling...market-driven as you say. I don't see lower wages as really being material (largely automated process) compared to:
1)much higher tipping fees. I've heard $80.00/ton is average. Did you know South Korea has the third highest population density on the planet- 467 humans per square kilometer(countries with less than 5,000 km^2 excluded)
2)cost of importing animal feeds/fertilizers from US (Korea is US's SECOND largest feed grain market). As I'm sure you're aware, the Korean Won has lost 58.4% of it's value (as of 3-13-98) versus the US Dollar since mid-November '97 causing imported US feed grains to be 2.3 times more expensive in Korean dollars than they were four months ago. The Indonesian Rupiah has lost 203.9% versus the US Dollar over the same time frame meaning US feed grains are over 8 TIMES more expensive! BTW, did you know Indonesia is the world's FOURTH most populous country?
I welcome your feedback.
Regards,
David Pickering |
