SEJONG/SEOUL, Sept. 27 (Korea Bizwire) — South Korea plans to soften regulations on overseas remittance and allow mega-sized investment banking (IB) firms to issue foreign currency-denominated promissory notes, as part of its effort to push for deregulations, the country’s finance ministry said Thursday.
The government also plans to allow duty-free shops at arrival terminals in a bid to reduce discomfort experienced by tourists and boost domestic consumption, according to the ministry.
Under a set of deregulation moves unveiled at a meeting of economy ministers, a South Korean in overseas countries can receive up to US$50,000 per day, from the current ceiling of $20,000, without submitting related documents.
A local resident can remit up to $50,000 per year overseas without the need to submit documents, the ministry said.
Also, brokerages and credit card firms will be allowed to engage in overseas remittance with an annual ceiling of $30,000 per case.
But the ministry said it will beef up the supervision of foreign exchange-related businesses in order to stem illegal foreign exchange transfers.
The deregulation measures moreover include allowing a large-scale IB to issue foreign currency-denominated promissory notes in order to raise foreign funds at lower rates.
The new license will be issued during the fourth quarter of the year, according to the ministry.
The government said it seeks to permit arrival duty free-shop business. As an initial step, the country’s first arrival duty free-shop will be set up at Incheon International Airport, before June next year, and gradually be expanded to major airports in the country as well.
The measures come after President Moon Jae-in ordered his staff to review the plan, saying that tourists currently have to carry around the items they purchase before departure for the duration of the trip due to the absence of duty-free shops at arrival halls.
The chief executive pointed out that arrival duty-free shops could raise domestic spending both by locals and foreign visitors.
Small and medium-sized duty-free operators welcomed the move, as the government said only smaller firms will be allowed to take part in the bidding to set up such shops.
Larger duty-free operators, meanwhile, forecast the new policy will have limited impact on the current landscape that is dominated by major retail conglomerates.
“Smaller firms can’t sell products at a lower price through economy of scale as their larger competitors can,” an industry source said. “They will likely draw some customers who used to shop in-flight, rather than actually taking away business from the duty-free shops in urban centers or at departure halls.”