Starting next year, corporations that make large-scale investments in the provinces will be able to get back up to half of their capital expenditures.
The government approved the "2027 budget proposal" at a Cabinet meeting on the 1st. The core aim is to support the provinces to ease polarization and promote growth for all.
To spur province-led growth, the government plans to provide up to 50% of capital expenditures as Growth Engine Special Grants to corporations that invest in the provinces. The eligible projects are those selected as growth engines under the 5 Hubs and 3 Special Autonomies. The 5 Hubs and 3 Special Autonomies system is designed to overcome the capital area–centric structure by dividing the nation into five mega-regions (capital area, southeast, Daegu–Gyeongbuk, central, Honam) and three special self-governing provinces (Gangwon, North Jeolla, Jeju) to cultivate region-specific growth drivers.
Previously, three to four growth engine projects were selected for each region, and corporations that make large-scale investments related to those projects can receive Growth Engine Special Grants. The benchmark for large-scale investment is 300 billion won for large corporations and 100 billion won for mid-sized corporations. The specific amount of each corporation's Growth Engine Special Grant will be finalized after considering job creation and contributions to the local economy. The government allocated 700 billion won for this program.
The budget also includes 5 trillion won in integrated incentive funds for the Jeonnam–Gwangju Integrated Special City and 3.5 trillion won in Local Future Growth Support Funds to improve living conditions in the regions. An official at the Ministry of Planning and Budget said, "The 5 trillion won in integrated incentives is in the nature of a local fund managed by the Jeonnam–Gwangju special city mayor."