Korea pushes action to win $ 30 billion in overseas construction deals

With signs of a recovery in the global construction market, the government said on Monday it would do everything possible to meet its goal of securing $ 30 billion in overseas construction contracts this year.

“The demand for large-scale infrastructure investments from developed and developing countries is expected to increase as the global construction market is expected to recover this year,” Finance Minister Hong Nam-ki said.

Korean construction companies won overseas orders worth $ 14.7 billion in the first six months of the year, down 9% from a year earlier, the pandemic of COVID-19 having dealt a severe blow to the sector. They made deals worth $ 35.1 billion overseas last year.

To meet the $ 30 billion goal, the country’s political lender, Export-Import Bank of Korea, plans to expand lending and reduce lending rates or fees to Korean companies investing in projects in the world. ‘foreign.

In order to take riskier bets, the lender will provide a 1.8 trillion won financial support program for infrastructure projects to be carried out in countries rated below B +.

Following its $ 5 billion loan deal with Abu Dhabi National Oil Company, the UAE’s state-owned oil company in June, Eximbank will seek similar framework agreements with other bidders, such as Saudi Arabia. Aramco and Qatar Petroleum. These agreements aim to help Korean bidders win orders by promising the issuance of credits.

The government has said it will continue its political support to prevent the contraction of overseas business due to COVID-19. For a businessman who needs to attend an urgent business trip, the government will provide an accelerated vaccination system to reduce the time between requesting vaccination and completing the second vaccination from three months to less than one month.

It will also offer up to 12 hours of legal consultation per company to help them resolve disputes such as the inevitable delays in construction work resulting from the pandemic.

Meanwhile, the finance minister has pledged a strong response to ensure the national interest is not damaged by new digital taxes and global minimum corporate taxes approved by 130 countries and jurisdictions last week.

“In the digital tax discussion process, we will respond in depth to the impact on Korean businesses and the distribution of taxing rights from a national interest perspective,” he said. .

Hong said he would actively join the discussion when he attended the G-20 finance ministers meeting in Venice, Italy this week. The new international tax rules are expected to come into effect in 2023, after the details of the deal are finalized by October.

Among Korean conglomerates, Samsung Electronics and SK hynix are likely to be subject to the new tax rule that requires multinational companies to pay taxes when they carry out sustained and significant activities, even if they are not physically present there. .

By Park Han-na ([email protected])

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