Forthcoming plansⅢ.

Main performances after new government’s launch

Ⅱ.

Deregulation for improving business environment

Ⅰ.

Expanding Korea’s economic growth potential systemically through continued improvement of the business environment

Creating more ‘decent jobs’ in the long-term, benefiting all citizens

Ⅰ. Deregulation for improving business environment

Supporting business activities by making institutional improvements from the perspective of the private sector

Improving business environments via a ‘Matrix approach’

※ vertical : inclusion of cost factors & regulatory infrastructurehorizontal : correspondence to the processes of business-cycle

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Framework for improving business environments

Ⅱ.

1. Lessening burdens upon business activities

2. Helping to do creative businesses without regulatory restrictions

3. Facilitating market functions by stimulating competition

4. Strengthening the competitiveness of SMEs

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Promoting large and long-term projects through reducing business uncertainties

Ⅱ-1. Lessening burdens upon business activities

Alleviating tax burdens to the level of competing countries

* corporate tax cut trends(%) : [China] 33→25 (08) [Singapore] 20→18 (08) [Taiwan] 25→17.5 (10) [Germany] 25→15 (08)

Broadening conveniences in the multiple areas including foreign exchange transactions, administrative regulations, etc.Stimulating corporate investment by reducing burdens

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1. Lessening corporate tax burdens

Cutting corporate tax rate & Increasing the threshold between high and low rate brackets

Adopting ‘Consolidated tax return scheme’⇒ Paying less corporate tax in the perspective of entire group(parent +

subsidiary) than current corporate tax scheme applied to individual companies

Extending applicable carry-forward period of operating loss (current : 5 yrs)

Increasing tax exemption rate of R&D facilities investment : 7% → 10%

Current

Tax Base

Below ￦ 100 mil. 13%

Above ￦ 100 mil. 25%

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Revised 08 10

Below ￦ 200 mil. 11% 10%

Above ￦ 200 mil. 22% 20%

Ⅱ-1. Lessening burdens upon business activities

Adopting ‘Consent order scheme’, allowing corporations to compromise remedy plans for actions against fair trade laws with authority

Adopting ‘No-action letter scheme’, enabling inquiry of regulations to authorities before proceeding with business (’08)

2. Lessening business burdens & Enhancing business convenience

Foreign exchange transaction

Administrative regulations

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Increased the limit of FX remit between headquarters and overseas subsidiaries, up to which firms are not obliged to make a report. (Jun.)

Abolished the amount limit to overseas real estate investment (Jun.)

Included intangible assets into objectives of overseas investment (Jun.)Abolishing the credit limit on each individual overseas subsidiaries (Feb., ’09)

Shifting administrative sanctions from transaction closure to fine penalty (Feb., ’09)

Ⅱ-1. Lessening burdens upon business activities

Exempting tax audit for corporations which exercised good tax practices (the 2nd half of this year~)

Established ‘Finance Service Center’ to provide one-stop service for financial civil affairs including approval and authorization (Jun.)

Establishing ‘Ubiquitous Customs Office’, making customs service available anytime and anywhere (’09)

Domestic tax

Customs

Finance

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Increased threshold for deferring tax payable without collateral (Jul.) : 30mil→ 50mil

Ⅱ-1. Lessening burdens upon business activities

Ⅱ-2. Helping to do creative businesses without regulatory restrictions

Reshuffling corporate laws to meet global standards

Changing conglomerate regulations systematically into the direction of market-oriented self-regulatory system

All levels of companies are growing into global players with global competence

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‘Less restricted and more creative’ business environments are introduced

1. Rationalizing corporate laws

Enlarging the breath of corporate configuration

Enriching legal bases for corporate pattern by adding ‘Limited Partnership’ and ‘Limited Liability Corporation’

Operating shareholder meeting efficiently and effectively

Streamlining procedures of shareholder meeting (meeting call & actions of voting rights)

Alleviating burden of issuing real securities

Adopting the electronic registration system for stocks and bonds

Facilitating capital finance Adopting ‘no-par stock’ system

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Ⅱ-2. Helping to do creative businesses without regulatory restrictions

Facilitating corporate finance Formulating ‘special provisions

securitizing movables, obligatory rights, and intellectual property rights’

2. Relaxing regulations against conglomerates

Stimulating investment sentiments of conglomerates

Nullifying the ‘ceiling on total amount of share holding in other domestic companies’

Reduced the no. of targeted conglomerates under authorities’ supervision (79→41)

Ensuring flexibility in making financial decisions

Relaxing restrictions on holding company system

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Ⅱ-2. Helping to do creative businesses without regulatory restrictions

Increased the threshold of classifying regulated conglomerates and unregulated ones (2tril.→ 5tril., Jul.)

Ⅱ-3. Facilitating market functions by stimulating competition

Alleviating entry barriers in specific industries

Relaxing discriminative regulations between manufacturing and service areas

Scaling down unnecessary regulations related to business activities

Opportunity to strengthen competitiveness

Increased consumer surplus

Enterprise

Consumer

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Ⅱ-3. Facilitating market functions by stimulating competition

Permitted/permitting conglomerates with book value of assets under ￦ 10tril. to enter into IPTV (12 Aug.) and general broadcasting (’08) business

Ameliorating regulations in reference to participants’ relative market shares in cable TV industry (’08)

Rationalizing an activity-related regulation via nullifying the restriction in reference to supply channel announcement (Sep.)

Alleviating tax and non-tax burden, and regulatory procedures of tourism industry to the level of manufacturing industry (Jun., ’09)

Broadcasting industry

Tourism industry

Refined-oil industry

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Ⅱ-4. Strengthening the competitiveness of SMEs

Mitigating various problems in the process of business activities including raw material procurement, securing finance, business information acquisition, product sales, etc.

Creating a level playing field between SMEs and SMEs /large corporations

Reducing burdens of SMEs, allowing them to acquire more value-added

opportunities

Helping SMEs gain competitiveness

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1. Reducing activity-related burdens & breaking bottlenecks

Mandating large corporations to comply with sales price adjustment upon SMEs’ request when raw material prices skyrocket, allowing each to take partial burden (Nov.)

Facilitated public guarantee for SMEs in order to get credits for procuring raw materials via guarantee fee cut(0.2%p) and guaranteed credit ratio increase (80% → 85%) (Aug.)

Carried out ‘urgent import tariff cut scheme’ twice (120 products, Apr., Aug.)

Shortened the period for making decisions to determine whether public funds will be granted (30days→ 20days, Apr.)

Alleviated the scope of guarantors who should provide guarantees for SMEs themselves when they acquire credits (May)

Raw material procurement

Securing finance

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Ⅱ- 4. Strengthening the competitiveness of SMEs

Providing business consulting and expert recommendation as well as givingpublic policy information (’09)

Made government procurement procedures better thru ①determining sales price as soon as possible (Mar.) and ②(de)escalating sales price in correspondence with the fluctuation of raw material price (May)

Revised provisions for government to repay export duties paid as soon as products are exported (May)

Alleviated the condition required for importers who can pay customs on a monthly basis (Apr.)

Business information acquisition

Product sales

Export and Import

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Ⅱ- 4. Strengthening the competitiveness of SMEs

2. Creating competing fields for SMEs

Enlarged opportunities for local SMEs to participate in construction projects induced by local government (Jun.)

Formulated and distributing now ‘standard contract documents’ in chartering, leasing or lending construction equipment, contributing to preclude unfair trade (Apr.)

Building “the integrated information system against unfair subcontract” in order to root out unfair subcontracting (Nov.)

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Ⅱ- 4. Strengthening the competitiveness of SMEs

Institutionalizing issues fixed by authorities

Improving business environment constantly

Finding regulations not commensurate with global standards, and then reflecting revised provisions into public policies

‘The second-phase policy package for improving business environments’ will be unveiled in mid-Sep.

Listening to voices from corporate sectors in order to prompt investment project (the summit jointed by private and public sectors)

Ⅲ. Forthcoming Plans

Rapidly implementing follow-up tasks including legalization for regulatory reform measures to take full effect

Dissolving specific bottlenecks to deter corporate investment

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