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K-Beauty Aesthetics Expands Global Business with Direct Sales and Distribution Networks Domestic medical aesthetics companies are accelerating their efforts to penetrate overseas markets. Building on the growing demand for K-aesthetics, they are establishing direct sales systems in the U.S. and securing local distribution networks, moving beyond simple exports to strengthen their global business foundations.According to Shinhan Investment Corp. on August 3, the global medical aesthetics market is expected to grow from $25.9 billion in 2024 to $46.3 billion by 2030. As interest in non-surgical cosmetic procedures rises, domestic companies are speeding up their business expansion, particularly in international markets.Hugel is enhancing its global market strategy with its botulinum toxin product, Letybo. Following its recent entry into the Indian market, the company has launched a hybrid sales model in the U.S. that combines direct sales and partner sales. The U.S. is the largest botulinum toxin market in the world, and establishing a direct sales system is expected to improve both distribution efficiency and profitability. Hugel has initiated direct sales in the U.S. this month, building local personnel and order systems, with the average selling price (ASP) in the U.S. reported to be about 8 to 10 times higher than in Korea.A Hugel representative stated, "The biggest change this year is the parallel implementation of direct sales in the U.S. We are continuously expanding our approvals in key botulinum toxin markets such as the U.S., China, Europe, and Brazil." The company aims to increase the number of countries with botulinum toxin approvals from over 70 to more than 80 by 2028.Classys also identifies strengthening its overseas business foundation as a key driver for long-term growth. In March, it acquired Brazilian medical device distribution group JL Health and secured distribution companies in Colombia and Argentina. Previously, in 2024, Classys merged with skincare medical device company Iruda to expand its product range to include microneedle radiofrequency (RF) and lasers, while pursuing entry into the U.S. and China and establishing a direct management system in Brazil.A Classys representative remarked, "Internalizing the distribution network is not just about securing sales channels; it is part of building a global business platform that encompasses customer experience, branding, clinical, education, and marketing. Based on this, we aim to maximize growth potential in each country and lead the global medical aesthetics market."Pharmarich is broadening its overseas business focus, particularly in the Middle East and Latin America. In February, it signed an exclusive supply agreement for its product, Rejuran, with Brazilian aesthetics company Dermadream and launched its botulinum toxin product, Lientox, in Thailand. The company plans to expand its overseas sales, currently at about 40%, based on a product portfolio that includes medical devices and cosmetics.Industry experts believe that the growing demand for non-surgical cosmetic procedures will drive growth in the global aesthetics market. The rise in new cosmetic demands, such as skin tightening and volume restoration following the spread of obesity treatments, also supports market expansion. However, regulatory differences, exchange rates, and tax changes in various countries remain variables.An industry insider noted, "In overseas markets, it is crucial to consider the regulatory systems and market structures of each country. To expect long-term success, companies must possess not only quality and price competitiveness but also local distribution and regulatory capabilities."* This article has been translated by AI. 2026-08-03 18:12:10
Establishment of Defense Counterintelligence Agency Marks New Era “The establishment of the Defense Counterintelligence Agency marks a turning point in ending the dark history of being a tool of power and completing the reconstruction of the 'military of the people.' You must prove yourselves as the 'people's counterintelligence agency' that the citizens can trust and rely on.” Ahn Gyu-baek, Minister of National Defense, made these remarks during the establishment ceremony of the Defense Counterintelligence Agency held at the headquarters in Gwacheon on August 3. He stated, “What we are parting with today is the entire dark past of the counterintelligence agency that became a 'tool of power' from the May 16 military coup to the December 12 coup, the May 17 martial law, and the December 3 insurrection.” In line with the disbandment of the Military Counterintelligence Command (CIC), three new organizations, including the Defense Counterintelligence Agency, were officially established to take over the existing CIC's responsibilities. The three key functions of counterintelligence, security, and security investigations, which were previously concentrated in the CIC, have been transferred to the newly established Defense Counterintelligence Agency, the Defense Security Support Group, and the Security Investigation Division within the Defense Investigation Agency. Minister Ahn emphasized, “We have designed the Defense Counterintelligence Agency as a specialized organization that fundamentally abolishes the function of power and concentrates its capabilities on its original mission.” Major General Pyeon Mu-sam, who previously served as the commander of the CIC, has been appointed as the acting head of the Defense Counterintelligence Agency. He is expected to be formally appointed as the head of the agency soon. Pyeon Mu-sam stated, “Over the past 20 months, we have deeply reflected on the illegal martial law of December 3, but we lost the trust of the people and fell into deep self-reproach. We worried about the identity and existence of our unit, and many colleagues had to leave without their positive functions and good missions being recognized.” He added, “While we cannot turn back the past marred by the illegal martial law of December 3, we can all work together to create a just and clear future for the Defense Counterintelligence Agency. I will do my utmost to uphold constitutional values and transform it into an elite counterintelligence agency trusted by the people.” The Defense Counterintelligence Agency aims to enhance its core functions and evolve into a specialized military counterintelligence organization. It plans to strengthen counterintelligence capabilities against North Korea and foreign military intelligence activities, as well as terrorist threats, while focusing on preventing military secrets from leaking in the defense sector. The agency will also explore new areas of work, including counterintelligence support for U.S. Navy vessels' maintenance, repair, and overhaul (MRO) and key strategic assets. In the cyber domain, the agency will support the implementation of the Korean Risk Management Framework (RMF) within the military and focus on blocking security threats in cyberspace, including advanced technology security support involving artificial intelligence (AI) and satellites. The newly established Defense Security Support Group is an independent and specialized organization that takes over the security functions of the CIC. It will be responsible for central security audits and security incident investigations for units at the corps level and above, ensuring military security and the protection of military secrets. The Security Investigation Division, newly established within the Defense Investigation Agency, will handle the security investigation functions of the CIC. This division will combine the investigative expertise of the Defense Investigation Agency with the security investigation capabilities of the CIC to investigate crimes that threaten national security, such as espionage, military secret leaks, and treasonous acts. The Defense Counterintelligence Agency, the Defense Investigation Agency, and the Defense Security Support Group will continue to operate a 'Security Investigation Council' to share information and intelligence related to security investigations and to cooperate in joint responses with relevant agencies. The functions related to monitoring and personnel intelligence, as well as the collection of illegal and corrupt information that had repeatedly caused controversy within the CIC, have been institutionally abolished.* This article has been translated by AI. 2026-08-03 18:12:00
Kim Yong-beom Faces Criminal Complaint Over Leverage ETF Directive Kim Yong-beom, the chief policy officer at the Blue House, has been criminally accused in connection with the single-stock leverage exchange-traded funds (ETFs) that have been cited as a cause of rapid stock market fluctuations. On August 3, former Seoul City Councilor Lee Jong-bae (People Power Party) announced that he filed a complaint against Kim with the Supreme Prosecutors' Office for abuse of power, coercion under criminal law, and obstruction of business through intimidation. Lee claims that Kim abused his authority by directing financial authorities to consider the introduction of single-stock leverage ETFs during a media interview in January, where he questioned, “Why can it be done in Nasdaq but not in our country?” He further argued that if there was external pressure from the Blue House, it would also constitute coercion and obstruction of business through intimidation. According to materials submitted by the Financial Services Commission to Kim Mi-ae, a member of the People Power Party, the commission indicated that it was reviewing plans to amend regulations and establish a system to launch the product in the second half of this year after a report on easing asymmetric ETF regulations was prepared in January. Lee stated, “If it were not for Kim's directive, the financial authorities would not have hastily introduced single-stock leverage ETFs, which are expected to cause severe side effects, just before the elections, and investor losses could have been minimized.” He added, “Among industry experts, there was a prevailing opinion that the introduction should occur in the second half of the year after sufficient simulations to ensure market stability. They warned that single-stock leverage could trigger negative compounding effects and significant forced selling, exacerbating overall index declines.” Lee criticized the situation, saying, “Despite warnings from industry experts and the Financial Services Commission about the risks, the hasty introduction of single-stock leverage ETFs right before the elections has created numerous victims. This is a horrific case of stock manipulation by the state and a major abuse of power.” The People Power Party has announced plans to pursue a national investigation into the introduction of single-stock leverage ETFs and has called for Kim's dismissal, stating, “Kim has only offered evasive excuses, claiming that ‘this is not unique to our market’ and ‘leverage ETFs are not the only cause.’” In response to a question about the recent decline in the domestic stock market during a briefing in Brazil on July 28, where President Lee Jae-myung was visiting, Kim stated, “There have been significant fluctuations due to various factors, and the past two to three months have not been unique to us.” He also mentioned, “We plan to conduct a comprehensive review of the structural factors contributing to the volatility, not just focusing on leverage ETFs.”* This article has been translated by AI. 2026-08-03 18:12:00
Chinese Appliance Brands Target South Korea's Home Appliance Market Chinese appliance manufacturers are leveraging their brand recognition gained from robot vacuums to expand into the broader home appliance market in South Korea. Companies like Roborock and Dreame, which dominate the domestic robot vacuum market, are actively broadening their product lines this year to include mops, washer-dryers, and air purifiers, targeting the smart home sector.According to the electronics industry on August 3, Dreame will hold the "Dreame in Seoul" event on August 20-21 at Banpo Hangang Park in Seocho-gu, Seoul, where it will unveil its brand vision and new product lineup for the second half of the year. This marks the company's first large-scale brand event since entering the Korean market, reflecting its commitment to strengthening its image as a comprehensive appliance company. Actor Ji Chang-wook, recently appointed as the official brand ambassador in Korea, will also attend the event. The company aims to enhance its premium image and expand its reach among local consumers through this partnership.This year, Dreame has rapidly expanded its product portfolio in Korea, launching air purifiers, mops, hair dryers, and air fryers. The company is transitioning from its core focus on robot vacuums to a broader range of home appliances, positioning itself as a smart home brand. Plans for localized marketing, including TV ads and digital campaigns, are also in the works.Dreame has already secured a leading position in the global robot vacuum market. According to market research firm Euromonitor International, Dreame ranked first in global robot vacuum sales last year. In 18 countries, including Germany and Nordic nations, its market share exceeds 40%, competing closely with Roborock for global leadership. The company plans to leverage its brand power gained abroad to intensify its efforts in the domestic home appliance market.Roborock, the top player in the domestic robot vacuum market, is also accelerating its expansion in Korea. Recently, the company launched an all-in-one washer-dryer, the "ZeoX," following its vacuum mop. By introducing a one-person model priced around 1 million won, it aims to enhance its competitiveness in a market where premium products typically cost around 4 million won.Roborock has established a strong foothold in the domestic robot vacuum market, maintaining the top sales share for four consecutive years since 2022, with estimates suggesting its market share exceeded 50% last year. Earlier this year, the company introduced on-site after-sales service for its major robot vacuum direct supply station models, further enhancing its service competitiveness in the domestic market. It offers specialized cleaning services for robot vacuum bodies and docks at 15 official service centers and supports repair requests at over 315 Lotte Hi-Mart stores nationwide.This strategy reflects how Chinese companies are leveraging the brand trust gained from robot vacuums to expand into other home appliances. While past strategies focused on price competition with low-cost products, recent efforts emphasize premium brand image and service quality to attract Korean consumers.However, analysts caution that the domestic appliance market is characterized by a strong consumer preference for durability, quality, and after-sales service, raising questions about the success of washer-dryers and air purifiers. One industry insider noted, "While Chinese companies have been recognized for their technology and price competitiveness in robot vacuums, brand trust and service are even more critical in the washing appliance market. The future success will depend not only on product competitiveness but also on after-sales service and distribution network establishment." 2026-08-03 18:08:00
Bank of Korea to Purchase Gold for First Time in 13 Years Amid Geopolitical Risks The Bank of Korea is set to resume gold purchases, shifting its long-standing preference for stocks as geopolitical risks increase the demand for safe assets.On August 3, the central bank announced it has established a trading system to buy domestically produced gold in collaboration with local gold producers, the Korea Exchange (KRX), and the Korea Securities Depository (KSD). The purchases will be based on the international gold price for quantities intended for export.The process will involve gold producers presenting the available quantities and desired timing for sales, with the Bank of Korea making decisions based on its gold management plans and market conditions.Since the purchases will target quantities intended for export, the impact on domestic gold supply and prices is expected to be limited. The bank plans to use a negotiated bulk trading method to minimize market effects.Historically, the Bank of Korea has been cautious about expanding its gold holdings, citing that gold is a non-yielding asset with lower long-term returns compared to foreign stocks. Earlier this year, the bank stated it had no plans to purchase gold.However, with the recent normalization of geopolitical risks and the trend of central banks worldwide increasing their gold reserves, the Bank of Korea has determined that it is necessary to boost its holdings, especially given that its gold reserve ratio is lower than that of other countries. The diversification of purchasing routes for domestically produced gold has also influenced this decision.Jung Hee-seop, head of the bank's foreign exchange management division, noted, "While it is difficult to say that gold prices are at an appropriate level, the recent decline in prices has somewhat eased the burden of purchasing." The bank has already begun investing in gold ETFs, with Jung stating, "We are considering ETFs as one of the channels for gold investment and started a small purchase in the second quarter of this year."However, the timing and scale of actual domestic gold purchases have yet to be determined. Since the structure requires domestic producers to present quantities intended for export, the decision to purchase will depend on market conditions. The Bank of Korea plans to proceed with domestic gold purchases once the KSD's gold storage infrastructure is fully established.Since 2013, the Bank of Korea has not made any additional gold purchases due to its lower liquidity compared to bonds or stocks. As of the end of last year, the bank's gold reserves stood at 104.4 tons, ranking 39th among central banks worldwide.* This article has been translated by AI. 2026-08-03 18:08:00
Deputy Minister Lee Hyung-il: Tax Reforms to Support Economic Growth Deputy Minister of Economy and Finance Lee Hyung-il announced on August 3 that the government will support a major economic leap for South Korea through tax reforms aimed at fostering strategic industries such as artificial intelligence (AI) and semiconductors, while also focusing on the livelihoods of citizens and local support.The 59th Tax Development Advisory Committee convened in Seoul, where Lee noted that while the South Korean economy is experiencing growth momentum due to the AI and semiconductor boom, uncertainties remain due to factors like the Middle East conflict.The Ministry of Economy and Finance has set the goal of the tax reform plan as 'supporting an irreplaceable South Korea's economic leap,' establishing three core directions: supporting potential growth rates, aiding livelihoods and local economies, and establishing fair taxation.Lee stated, "We will introduce a 'Domestic Production Tax Credit' to support items of strategic importance in terms of global economic security and green transition, aiming to boost potential growth rates." The sectors targeted include solar power, wind power, secondary batteries, semiconductors, key materials, and AI robot components.Additionally, the government plans to include future energy sectors such as small modular reactors (SMRs) and micro modular reactors (MMRs) as national strategic technologies.He also mentioned the introduction of a tiered structure that maintains certain benefits for small businesses even after graduation, and the establishment of a 'Productive Finance Individual Savings Account (ISA)' focused on long-term investments in the domestic stock market to channel funds into productive sectors of the economy.The tax reform plan also includes support for livelihoods and local economies. The government plans to significantly expand the Earned Income Tax Credit (EITC) and raise the limit for monthly rent tax deductions. A 'Youth Productive Finance ISA' will be introduced, offering a 10% income deduction on contributions for young people.Furthermore, the tax system will be restructured to provide more benefits to local areas. Lee explained, "We will apply regional coefficients to the Domestic Production Tax Credit, R&D tax credits, and integrated investment tax credits, ensuring that tax benefits for local areas are up to 1.5 times greater than those in the metropolitan area."Lee also addressed the highly discussed real estate tax policies in the reform plan. The comprehensive real estate tax rate system will be unified based on housing value, and the threshold for taxing single-family homes will be raised from the current assessed value of 1.2 billion won to 1.4 billion won.For primary residences, the tax burden will be reduced for properties valued between 2 billion and 3 billion won, while those valued between 3 billion and 4 billion won will see minimal tax changes. Lee emphasized, "We will normalize taxation for homes valued between 4 billion and 5 billion won."The reform plan also includes a focus on primary residences. For unoccupied homes and multiple properties, the basic deduction amount will be reduced, and the long-term holding special deduction for capital gains tax will be excluded. For primary residences, a maximum deduction of 80% will apply for up to 10 years.Lee stated, "For homes sold after more than 10 years of residence valued at 3 billion won or less, we will increase the basic deduction from 2.5 million won to 25 million won to reduce capital gains tax."Additionally, measures such as a maximum 50 million won capital gains tax exemption for single-home owners relocating to local areas, expanded deferral of comprehensive real estate tax payments, and temporary easing of capital gains tax for multiple property owners were also announced.The government plans to normalize the comprehensive real estate tax from next year through 2028, with a grace period for capital gains tax in 2024, followed by a phased implementation starting in 2028.Finally, Lee announced plans to revise the business succession tax exemption. He stated, "We will redesign the eligible industries, requirements, and exemption limits to align with the original intent of the system, ensuring that 'the succession of specialized skills and know-how' is eligible for tax exemptions. We will also introduce special provisions to provide tax benefits to both sellers and buyers when a business is transferred to a third party rather than a family member."* This article has been translated by AI. 2026-08-03 18:08:00
2026 Tax Reform Plan Ends Tax Benefits for Hybrid Cars Amid Domestic Demand Concerns The South Korean government announced that tax benefits for hybrid electric vehicles (HEVs) will end on December 31, 2026, as part of its 2026 tax reform plan. The tax benefits for electric vehicles (EVs) and hydrogen fuel cell vehicles (FCEVs) will also be gradually reduced starting next year, with a complete phase-out by December 31, 2028.According to industry sources on August 3, the government revealed a tax law amendment that will terminate the tax reductions for HEVs, including individual consumption tax, education tax, and acquisition tax, by the end of this year. The tax reduction program was introduced in 2009 to promote the purchase of eco-friendly vehicles, initially offering a 1 million won tax break per vehicle, which has since been adjusted to 700,000 won per vehicle. The government has decided not to extend the tax reduction period, stating that the objectives of the tax support have been achieved.Tax benefits for EVs and FCEVs will also be phased out. Currently, EVs receive a 3 million won tax reduction, which will decrease to 2 million won in January 2027 and 1 million won in January 2028. Similarly, the tax reduction for FCEVs, which is currently 4 million won, will drop to 3 million won in January 2027 and 1.5 million won in January 2028. Both tax benefits for EVs and FCEVs will expire on December 31, 2028.Concerns have been raised that these changes may dampen demand for eco-friendly vehicles. The elimination of the HEV tax benefit could add up to 1 million won to the actual purchase cost for consumers, as it includes 700,000 won in individual consumption tax, 210,000 won in education tax, and 90,000 won in value-added tax. For EVs and FCEVs, the loss of tax benefits translates to an increase in consumer prices by 4.29 million won and 5.72 million won, respectively.An industry representative stated, "With eco-friendly vehicles accounting for nearly 60% of new car registrations, the end of tax benefits will effectively mean a price increase for consumers, directly impacting demand. This comes at a time when both exports and domestic sales are struggling, and the industry has been relying on stable demand for HEVs and EVs to weather the storm."However, the government plans to enhance the efficiency of the program by converting tax benefits into financial support. The Ministry of Economy and Finance is currently discussing plans to expand subsidies for EVs and FCEVs with relevant departments. A government official noted, "By gradually reducing the tax benefits for EVs and FCEVs and transitioning to financial support, we aim to improve the efficiency of the policy and ensure that assistance is directed where it is needed. We believe that the subsidy program can sufficiently offset the reduced tax benefits." 2026-08-03 18:08:00
LG Electronics India Achieves Record Sales Nearing $4 Billion with Localized Production LG Electronics' Indian subsidiary has achieved record sales, driven by a localization rate of 55% in parts. The company is looking to further expand with the construction of a third factory and an increase in exports to 22 countries in Asia and the Middle East.On August 3, LG Electronics India submitted its business report for the 2026 fiscal year (April 2025 to March 2026) to the National Stock Exchange of India (NSE), reporting total annual revenue of 246.04 billion rupees (approximately $3.7 billion). This marks the highest performance since the company entered India in 1997. Over the past five years, the compound annual growth rate (CAGR) has been 9.75%, surpassing the domestic growth rate of 9%.The localization rate for key components, such as compressors and motors, has increased to 55.2%. This improvement in quality control, production speed, and price competitiveness has solidified the market dominance of locally produced electronics in India.The home appliance sector accounted for 73.8% of total sales (approximately 272.22 billion rupees), driving growth. The Pune factory is the only local manufacturer producing large-capacity side-by-side refrigerators in the 600-700 liter range, catering to premium demand, while specialized appliances designed for voltage instability and low water pressure have strengthened its market position. LG's OLED TVs hold over 60% market share in India.As the company grows, it faces challenges related to rising global raw material prices and a weakening rupee, which have increased cost pressures. Consequently, net profit (PAT) fell to 16.85 billion rupees (approximately $252.9 million), a 23.5% decrease compared to the previous year.LG Electronics plans to enhance profitability through the early completion of its third factory and increased exports to neighboring countries. A significant portion of the 180 billion rupees raised from its listing on the Indian stock market last year will be invested in expanding the Sri City factory in Andhra Pradesh. This will be LG's third production base in India, following Noida and Pune, with a total project cost of 90 billion rupees. The completion target has been moved up from next year to this year, with trial operations set to begin soon. The company aims to significantly reduce logistics costs by establishing a foothold in southern India.The 'Make in India Global' strategy to expand the overseas market for Indian-made electronics is also gaining momentum. The 'LG Essential' series, launched in India last November, will lead this initiative. The essential lineup, which includes air conditioners, refrigerators, washing machines, and ovens, is set to be rolled out in 22 countries, including Indonesia, Saudi Arabia, Vietnam, and Egypt, by the end of this year.Song Dae-hyun, Chairman of LG Electronics India, stated in the report, "The record performance in our first year of listing is a result of the explosive growth of the Indian consumer market combined with our solid business framework. We will strengthen our product and logistics competitiveness to achieve sustainable growth in line with India's rapid premiumization trend." 2026-08-03 18:08:00
Qualcomm and TSMC Signal Chip Price Increases, Pressuring Samsung's Premium Strategy Qualcomm and TSMC have announced upcoming semiconductor price increases, which are expected to raise cost pressures on Apple and Samsung Electronics' mobile businesses. As Samsung competes fiercely with Apple, analysts suggest that the company will need to raise the average selling price of its Galaxy premium products while expanding the use of its own application processor, Exynos, to maintain profitability.According to industry sources, Qualcomm plans to raise mobile chip prices by double-digit percentages starting September 1. In a letter to clients, Qualcomm explained that it has reached its limit in absorbing cost increases from suppliers.Earlier, TSMC indicated it would raise prices for semiconductor foundry services, including advanced processes below 7 nanometers, by 5% to 10% starting in 2027. This is attributed to increased investments in AI data centers, which have prioritized advanced process and memory production capabilities for server semiconductors.For Samsung, this means that the purchase price of Snapdragon chips for its Galaxy flagship devices and the production costs of its own AP could both rise. Even if Samsung reduces its reliance on Qualcomm, it may still face rising costs from TSMC and its own foundry's advanced processes.Apple has also identified a lack of advanced semiconductor production capacity as a supply chain burden. However, the company reported a 16% increase in revenue and a gross margin of 50.1% in the third quarter of the 2026 fiscal year, indicating it has managed to absorb cost increases relatively well, better than Samsung.Samsung has already begun raising prices with the Galaxy S26 series, adjusting the previously frozen prices of the Galaxy S series to reflect rising component costs.Looking ahead, price increase pressures are likely to continue. However, experts warn that simply raising prices in response to rising costs may lead to consumer resistance.Improvements in camera technology, on-device AI, battery performance, and foldable usability must support price increases to be perceived as part of a premium strategy. Samsung's efforts to increase the sales proportion of high-end products like the Ultra and Galaxy Z8 series align with this strategy.The expansion of its own AP is also seen as a critical factor for future profitability. The Galaxy S26 series features the Exynos 2600, produced using Samsung's 2-nanometer process, but the top-tier S26 Ultra still uses Qualcomm's Snapdragon regardless of region.Continued reliance on Qualcomm for the highest-priced Ultra model raises concerns about the limits of price negotiations for APs. Analysts suggest that Exynos must be applied to the top-tier products to serve as a viable alternative in negotiations with Qualcomm.However, there are concerns that rushing to apply its own chips in the name of cost reduction could burden the Galaxy brand. It is suggested that Samsung should first ensure that its chips match Snapdragon in performance, heat generation, and battery efficiency before expanding their use.Samsung possesses capabilities in AP design, foundry production, and smartphone manufacturing. If the system where the System LSI division designs chips, the foundry division produces them, and the MX division applies them to Galaxy devices operates smoothly, it could enhance Samsung's ability to respond to external semiconductor pricing policies.In the mid-range segment, Samsung is expected to continue its strategy of applying Qualcomm, Exynos, and MediaTek chips based on region and price range. This could lead to a more segmented AP strategy, securing performance and brand trust in flagship models while enhancing cost competitiveness in budget models.An industry insider noted, "The price increases from Qualcomm will be reflected in the profitability of set manufacturers after a delay as existing inventory is depleted. Exynos must be applied to the Ultra models to create real alternatives in pricing negotiations with Qualcomm."* This article has been translated by AI. 2026-08-03 18:04:20
2026 Tax Reform Plan: Local Investment Tax Credits Increased by 1.5 Times, Income Tax Exemption for Youth in Declining Areas Extended to 10 Years Government plans to apply differential tax credits for research and development (R&D) and facility investments based on region. Higher credits will be offered in non-metropolitan areas compared to the capital region, and young workers employed by small businesses in areas experiencing population decline will see their income tax exemption period extended to a maximum of 10 years, encouraging the relocation of businesses and workforce to these regions.The Ministry of Finance announced the '2026 Tax Reform Plan' on August 3 during a meeting of the Tax Development Advisory Committee.The government will apply higher tax credit rates for R&D expenses and integrated investment tax credits by multiplying them with regional coefficients. The same method will be applied to a newly established domestic production tax credit aimed at items with a weak domestic production base.The regional coefficients will be set at 1.0 for the capital region, 1.1 for metropolitan cities outside the capital, 1.3 for other non-metropolitan areas, and 1.5 for designated preferential areas. For example, if a business receives a tax credit of 10 billion won in the capital region, it would receive 11 billion won in metropolitan cities outside the capital, 13 billion won in other non-metropolitan areas, and 15 billion won in preferential areas.The specific scope of preferential areas will be determined based on a 'local preferential index' that reflects distance from Seoul, population, and socio-economic conditions. The government plans to finalize the specific regions by amending the Enforcement Decree of the Restriction of Special Taxation Act in February next year.In addition to corporate investments, income tax exemptions for employees of small businesses will also be applied differentially based on the location of the workplace. Currently, young workers receive a 90% income tax exemption for five years regardless of location, but under the new plan, this period will be extended to six years in metropolitan cities outside the capital, seven years in other non-metropolitan areas, and ten years in preferential areas. The capital region will remain at five years. The annual exemption limit is set at 2 million won.The exemption period for seniors over 60, people with disabilities, and those with career interruptions will remain at three years, but the exemption rates will vary: 70% in the capital region, 75% in metropolitan cities outside the capital, 80% in other non-metropolitan areas, and 90% in preferential areas. The regional exemption system will be in effect until the end of 2029.For businesses relocating to non-metropolitan areas or establishing or expanding operations in these regions, relocation allowances paid to existing employees will be exempt from income tax for three years, subject to a monthly limit. The basic non-taxable limit is set at 200,000 won per month, which can be increased to 500,000 won in preferential areas.To ensure that tax benefits translate into actual local economic growth, a clawback mechanism will be established. If companies that relocate or settle in a region fail to invest in local R&D, employment, or cooperative funds during the exemption period, and the amount spent falls below 30% of the exempted tax amount, the difference will be reclaimed.Tax reductions for local startups will also be expanded. The income tax and corporate tax reduction rates for general startup small businesses will be differentiated as follows: 25% for the capital region excluding overcrowded areas, 50% for metropolitan cities outside the capital, 60% for other non-metropolitan areas, and 70% for preferential areas. Young startup businesses in non-metropolitan areas will receive a 100% exemption. The reduction rates for jump-up small businesses and young innovative small businesses will also vary by region.Additionally, tax credits for hometown love donations will be differentiated by region. Donations exceeding 100,000 won but less than 200,000 won will receive a 40% credit in metropolitan cities outside the capital and a 50% credit in other non-metropolitan and preferential areas. For donations exceeding 200,000 won but less than 20 million won, the credit rate will be increased to 25% in preferential areas.* This article has been translated by AI. 2026-08-03 18:04:20