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Investment Incentive

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Foreign Investment Business Support

Contents of Foreign Investment Business Support
Incentive Description
Tax
Reduction
Customs Duties
  • [100% reduction over 5-year period]
    • Capital goods imported
National Tax
(Corporate Tax/
Income Tax)
  • [100% reduction over 3-year period, 50% reduction over 2-year period]
    • Manufacturing industry (over $10 million)
    • Tourism industry (over $10 million)
    • business·information·fictive art·service industry(over $10 million)
    • Logistics industry (over $5 million)
    • R&D (over $1 million & regular employment of more than 10 researchers holding a degree higher than masters)
    • Business developers (more than $30 million or foreign investment ratio over 50% with total business expenses over $500 million)
  • [100% reduction over 5 years, 50% reduction over 2 years: Free Trade Zone Committee review and resolution project ]
    • Manufacturing industry (over $30 million)
    • Tourism industry (over $20 million)
    • Logistics industry (over $10 million)
    • R&D (over $2 million and regular employment of over 10 researchers holding a degree higher than masters)
Regional Tax
  • Acquisition tax : 100% over 15 years
  • Property tax : 100% over 10 years, 50% over 3 years
Location
Support
Lease
  • Possible leasing of national and public sites within 50-year period
  • The rent is calculated by multiplying the rate by more than 10/1,000 of the land value
Rent Reduction
  • [Total reduction]
    • More than $1 million in advanced technology industry
    • More than $20 million in external investment
    • More than 300 daily average employees
    • More than 50% of production as exports, 100% procurement of national parts and raw materials
    • Exportation is 100% of entire production
  • [75% reduction]
    • Foreign investment sum between $10-20 million
    • Average daily employment of 200 to 300 people
    • More than 50% of production as exports, between 75-100% procurement of national parts and raw materials
    • Between 75-100% of production as exports
  • [50% reduction]
    • Foreign investment rate between $5-10 million
    • Average daily employment of 100-200 people
    • Greater than 50% of production as exports, procurement of national parts and raw materials between 50-75%
    • Between 50-75% of production as exports
Sale
  • (National and public property) Sale of composition cost possible through optional contract
Subsidy Support
(Foreign investment rate over 30%)
Location Subsidies
  • Normal sale price contract support limited to sale price margin
  • Cannot exceed 50% of normal sale price,
  • Business plan consultation project must be managed for over 10 years.
Facility
Subsidies
  • In the case of new construction or expansion exceeding 30 billion won, 2 billion won per business, within 2% of equipment cost in excess of 30 billion won.
Education
Subsidies
  • Up to 500,000 won per person within a 6-month time in the event of new domestic employment of over 20 people
  • Cannot exceed 2 billion won per business
Employment
Subsidies
  • In the case of a foreign investment business establishment, support of up to 500,000 won per month If new regularly employed personnel exceed 20 people
  • Employee support per additional employee within 5 years after business commencement
Promotion Results
Compensation
  • As a public official or private citizen in an MOU contract, foreign investment payment is limited to the occasion in which a foreign investment is made, and annual promotion results are reviewed and resolved by the Foreign Investment Promotion Committee
Business Transfer
Subsidies
  • More than 40 billion won in previous fiscal year sales (more than 10 billion won in logistics businesses and knowledge based businesses)
  • Up to 300,000 won per person and 300 million won per business for head offices and research centers who exceed regular employment of 20 people
  • Up to 200 million won per business for logistics and knowledge based businesses, covering 30% of building's purchase price or 1 year of rent
Funding
  • Receive same financial support as national businesses
Infrustructure Support
  • National treasury preferential support for infrastructure within FEZ (total and partial)
Administrative Support
  • One-Stop administrative support, resident foreign investment company management, and ombudsman management for daily life issues
  • Association of Commercial Arbitration for commercial dispute resolution and maintenance of order in international business

Improved Living Conditions for Foreigners

contents of Improved Living Conditions for Foreigners
Incentive Description
Provision of
Foreign Language Service
  • Issuance official documents in foreign languages, and receipt and processing of foreign language official documents
Superior Education
Environment
  • Establishment and management of foreign education facilities (elementary, middle, and high schools, and universities)
  • Provide funding support or building space for facility construction and school management
  • Eased regulations on foreign education facility establishment and management through special law enactment
  • * Permission of domestic elementary, middle, and high student enrollment (up to 30% of enrolled students)

Safe Medical
Environment
  • Construction and management of foreigner medical facilities and private foreigner pharmacies
  • Recognition of services related to special medical cases (such as a hot spring)
  • Enactment of special act for foreigner medical facilities
Other
  • Approval of private foreigner casinos (over $500 million foreign investment sum)
  • Expansion of foreign channels in cable broadcasting
  • Provide from 1/100~10/100 (of the total number of households) houses for private foreigner use

Easing of Regulations and other Business Burdens

Contents of Easing of Regulations and other Business Burdens
Incentive Description
Eased Labor Regulations
  • Exclude persons of national merit, the disabled, and the elderly from employment duty
  • Elimination of regulations regarding dispatched laborers and target businesses
  • Unpaid holidays, unpaid leave period allowed
Elimination of
Metropolitan Area
Maintenance Plan Law
  • Non-application of foreign investment-related Metropolitan Area Maintenance Plan law Article 7 (overcrowding control domain restriction), Article 8 (growth management areas restriction), Article 12 (imposition of overcrowding charges), Article 18 (total restriction of overcrowding facilities), and Article 19 (restrictions on large-scale development business).
Freedom in Foreigner Exchange Trading
  • Direct provision of routine business costs through foreigner exchange

Simplification of Administrative Procedures

Contents of Simplification of Administrative Procedures
Incentive Description
Plan Designation and
Approval Consideration
  • In the case of Free Economic Zone designation, consideration of designation, establishment, and approval of the following:
    • Designation of urban development area and establishment of urban development plan
    • Scheduled district designation and housing site development plan approval
    • Designation of national industrial complexes, general local industrial complexes, and advanced urban industrial complexes
    • Designation of tourism sites and tourism complexes
    • Designation of logistics complexes
    • Approval of Ministry of Land, Transport, and Maritime Affairs for establishment and modification of urban development plan
    • Modification of public waterway reclamation plan
    • Unified shore management plan and modification of shore management area plan
    • Modification of basic waterway plan, basic capital area maintenance plan, and basic sewage maintenance plan
Notice or Announcement
  • In the case of implementation plan approval announcement
    • Notice and announcement of approval of 39 individual laws, including the Grassland Law, Production Area Law, and Agricultural Land Act.

Tax Reduction Request Process

  • * If a "foreign investor or foreign investment company" is seeking a tax (national or local) reduction... the foreign investment company must make a request to the Ministry of Strategy and Finance by the end of the tax year in which the business commenced.

Contencts of Tax Reduction Request Process