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Lee says raid causes confusion, may impact Korean

investment in

U.S.

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South Korea seeks visa process improvements with the U.S

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Lee emphasises Trump's role in North Korea diplomacy

(Adds quotes and more comments throughout)

By Joyce Lee

SEOUL, Sept 11 (Reuters) - South Korean President Lee

Jae Myung said on Thursday a U.S. immigration raid resulting in

the detention of hundreds of workers at a Hyundai Motor ( HYMLF ) business

project could have an impact on U.S. investment decisions made

by Korean companies.

The raid was a confounding event and caused a great deal of

confusion, Lee told a news conference, adding it was likely to

leave South Korean businesses "hesitant" about investing in the

United States.

Last week's raid at a Hyundai Motor ( HYMLF ) project site in the

state of Georgia led to the detention of about 300 South Korean

workers, sending shockwaves through South Korea and raising

questions about the viability of doing business in the United

States.

There had been no review yet by the government on whether

there should be a new approach to business cooperation between

the two countries, Lee said.

"But our businesses that have entered (the United

States) are likely in a state of serious confusion," he said.

The 316 South Koreans who are now held at a detention center

will leave that facility at 3 p.m. Korean time on Thursday and

board a chartered plane to South Korea, Lee said.

South Korean Foreign Minister Cho Hyun has flown to

Washington to resolve what has become a diplomatic quagmire

after 475 people working at the site in Georgia were detained by

U.S. immigration authorities last week.

At a meeting with U.S. Secretary of State Marco Rubio,

Cho said Koreans were "hurt and shocked" by the arrest of

workers "who came to the U.S. to transfer technology and

know-how to contribute to the Trump administration's efforts to

revive the U.S. manufacturing industry,"

Korean businesses have complained about strict U.S.

limits on visas for skilled foreign workers, which they say make

it difficult for them to oversee the construction of factories

or to train local workers.

The allies were now discussing ways to improve the visa

process for South Koreans and Washington was likely to seek a

reasonable solution, Lee said.

"But in this situation, our businesses that are

investing in the United States will no doubt be very hesitant,"

he added.

'TRUMP HAS UNIQUE ROLE ON NORTH KOREA'

Lee also said he did not see a need to follow through on

a plan to revise the country's capital gains tax that was

intended to increase tax revenue from stock investors.

The president said he now considered it unnecessary to lower

the threshold defining "large shareholders" subject to paying

capital gains tax. The planned tax change has caused a public

backlash among South Korean investors.

South Korea will continue to make efforts to improve ties

with North Korea and establish peace on the Korean Peninsula,

even though Pyongyang has so far remained cold to the peace

outreach by Seoul, Lee said.

Considering the unique role that U.S. President Donald Trump

can play in efforts to reopen dialogue with North Korea, Lee

said Seoul did not necessarily have to take the lead in

diplomacy with Pyongyang.

North Korea's nuclear and missile capabilities have

reached a level that make them a complicated issue that directly

involves and impacts the United States, Lee said.

Trump said after talks with Lee last month that he

wanted to meet North Korean leader Kim Jong Un this year. The

U.S. president held two summits with Kim in his first term,

though the talks produced no deal on North Korea's nuclear

programme.