South Korea and Ethiopia are looking to boost political and economic ties. South Korean companies are trying to make inroads into Ethiopia’s market. Ethiopia is pushing to create a textile industrial complex for South Korean companies and is considering a move to offer tax benefits to South Korean textile companies to attract investment.
The two countries are expected to sign a double taxation avoidance pact that could facilitate South Korean companies’ investments in Ethiopia as the deal could reduce tax burden on South Korean companies.
South Korea feels its textile companies can export intermediate goods that can be made into finished products in Ethiopia. These goods can be shipped to the United States and the European Union without tariffs, a move that could offer a competitive edge to South Korean companies.
Youngone Corporation, a South Korean textile and footwear manufacturer, is ready to invest in the apparel and textile manufacturing industries of Ethiopia. The corporation wishes to invest hugely in Ethiopia for it sees textile as its gateway to Ethiopia’s market.
Youngone may lure other South Korean textile manufacturers to Ethiopia. South Korea has provision for a 500 million loan dollar to Ethiopia from 2016 to 2018.