While many of the companies said they are investing overseas to enter new markets, 44 percent blamed problems at home, including high labor costs and strict government regulations.

According to the survey released Thursday by the Federation of Korean Industries (FKI), Korean companies will increasingly move overseas unless the government reforms its regulations.

The survey was sent to Korea's top 500 companies in terms of revenue, and 354 or 70.8 percent responded.

The survey showed that six out of 10 companies or 61.9 percent have plans for direct investment abroad. Fifty seven percent said they plan to invest overseas this year, and 93.3 percent said that they plan to do so within three years.

Some 73.8 percent of companies that have entered foreign markets said they will invest in the same business or a new sector while maintaining their factories in Korea, and 11.7 percent said they will build up existing facilities abroad.

Another 2.1 percent said that they plan to move to another country and shut down their facilities in Korea.

Almost half or 48.8 percent said their investment was going to China, followed by 29.8 percent who said Southeast Asia, 11.9 percent Northern America, and 6.5 percent Europe.

As to the reasons for investing abroad, 40 percent said it was to enter local markets.

Some 37.6 percent cited cheap labor costs and convenient supply of materials, good infrastructure, low tax rates, and other desirable business circumstances.

Another 6.7 percent pointed to excessive regulations in Korea, difficulties in securing land for facilities, powerful labor unions and other unfavorable business circumstances here.

Altogether 44 percent of the companies are planning on foreign investment to avoid an unfavorable business environment at home.

An FKI official said, "The Japanese manufacturing industry is seeing a u-turn back to Japan with 12.6 percent increase in domestic investment because of eased regulations to block concentration in urban areas and improved circumstances for businesses. The Korean government should also induce domestic investment by reforming such regulations."

(englishnews@chosun.com )