MOTIE to Completely Overhaul Reshoring Support System... Subsidies Only for Regional Investments

Hearing Difficulties Faced by Reshored and Foreign-Invested Companies
Amendment to the Enforcement Decree of the U-turn Act Pre-Announced
...To Be Implemented as Early as October

The Ministry of Trade, Industry and Energy (MOTIE) has consecutively visited companies that have reshored their operations to Korea as well as foreign-invested enterprises to discuss ways to promote reshoring and local investment. MOTIE announced plans to completely overhaul its support system starting next year, including providing subsidies only to companies that establish themselves outside the Seoul metropolitan area, in order to encourage more businesses to return to Korea.

According to MOTIE, Kang Gamchan, Director General for Trade and Investment, will be visiting Daegu on August 13 to review the investment status of Daedong, a mid-sized agricultural machinery manufacturer that has reshored its business, and Valeo Mobility Korea, a foreign-invested enterprise producing key components for autonomous vehicles. During the visit, he will listen to the companies’ difficulties and suggestions.

The Asia Business Daily Database

This visit has been arranged as a joint effort among MOTIE, local governments, Korea Trade-Investment Promotion Agency (KOTRA), the Korea Industrial Complex Corporation, and other related organizations. The purpose is to form a 'one team' on-site, directly meeting with reshored and foreign-invested companies to discuss measures to promote local investment.

On this day, Director General Kang will tour the Daegu factory of Daedong, which was selected as the third reshored company this year, inspecting production sites for tractors and other machinery. Daedong recently decided to exit its overseas business sites and invest approximately 80 billion won to expand its factory as part of its reshoring initiative. Notably, this investment involves building a dedicated plant for manufacturing AI-powered autonomous tractors through the adoption of an artificial intelligence (AI) factory. MOTIE expects that, through the transition to AI-powered manufacturing (M.AX), this will strengthen Daedong’s capabilities in advanced agricultural machinery production and contribute to local economic growth.

MOTIE is working swiftly on follow-up measures to the 'Redefining and Promoting Reshoring' plan announced on May 29, 2026. The ministry pre-announced a revision to the Enforcement Decree of the 'U-turn Act (Domestic Business Reshoring Support Act)' on July 6. This amendment is scheduled to go into effect as early as October this year, after the necessary processes. Additionally, the government plans to entirely revamp the subsidy support system through a notice revision by the end of the year, to be implemented from next year. MOTIE will introduce a negotiation-based approach to determine the size of subsidies with individual companies and will provide subsidies only to companies that establish outside the Seoul metropolitan area, thereby promoting local investment through tailored support.

Kang will also visit Valeo Mobility Korea, a foreign-invested company based in Daegu. Valeo, a global French automotive parts manufacturer with total sales of 20.9 billion euros in 2025, entered Korea as a joint venture in 1988. It currently operates 14 production facilities and three research centers in Korea, establishing itself as a leading foreign-invested company that has contributed to the growth of the Korean automotive industry. Established in 2022, Valeo Mobility Korea manufactures and develops critical components and control systems for autonomous driving, including ultrasonic sensors, radar, and cameras, which are essential for Advanced Driver Assistance Systems (ADAS), at its Daegu production plant and Gyeongsan R&D Center.

Director General Kang stated, “In order to effectively respond to the spread of AI and external uncertainties, strategic corporate investment has become increasingly important. The regions must become the center of such investments to ensure the continuous growth of both the nation and its companies. We will comprehensively support competent companies so they can invest and grow in the provinces.”

This content was produced with the assistance of AI translation services.