IFEZ Journal

Key Strategies and Challenges for 2024

continuous growth

Additional Designation of FEZs

IFEZ was designated as Korea’s first free economic zone in 2003. Over the past 20 years of history, IFEZ has developed remarkably. 

However, IFEZ’s growth has not yet reached its endpoint. 

The additional designation of a free economic zone demonstrates IFEZ’s efforts to secure sustainable growth engines.

1. Incheon Inner Port

A New Breeze Rolls into the Port — Jemulpo Port Renaissance

Incheon Inner Port FEZ

Area  6.06 ㎢

Budget KRW 3.9 billion

Period 09.2023 – 02.2026(30 months)

Progress

06.2023 – Establishing the contract-promotion plan

07.2023 – Deliberating on the contract

09.2023 – Starting the contract

Upcoming Plan Late 2025 – Applying for FEZ designation

On December 21 last year, the government announced the 3rd Basic Plan for Free Economic Zones. As local governments frequently change their method of designating FEZs, IFEZ has also been pushing to designate some additional areas as FEZs.

There are four major areas where IFEZ plans to designate additional free economic zones: Incheon Inner Port(Jung-gu), the former Songdo Amusement Park(Yeonsu-gu), the southern end of Ganghwado Island, and Yeongjongdo Island. First of all, the incorporation of Incheon Inner Port and the former Songdo Amusement Park as FEZs is a necessary prerequisite for the Jemulpo Port Renaissance, a large-scale development project being promoted by Incheon Metropolitan City around the original downtown area, and the creation of Harbor City, where history and culture coexist.

The Jemulpo Port Renaissance project aims to recreate the original city center with culture, tourism, and industry, centering around Jung-gu and Dong-gu. This plan is being promoted with a focus on projects in four areas: the original downtown, culture and tourism, the industrial economy, and development of Incheon Inner Port. Incheon Inner Port will provide a water-friendly space for citizens and a space for marine tourism, also serving as a base for future growth industries and youth startups through designation as a free economic zone.

To this end, IFEZ has designated a 6.06 ㎢ site around the inner harbor as “Jemulpo FEZ” and is seeking to promote foreign investment and attract companies to the area. To this end, IFEZ began feasibility work in November of last year for KRW 3.9 billion, scheduled to be completed in May 2026. Using the FEZ designation of Incheon Inner Port as a driving force, IFEZ plans to lead the new growth of the declining Incheon Inner Port by attracting high-tech industries, such as the business bio cluster, Incheon Venture Harbor Park, and Jemulpo Mobility Hub, and by expanding the networks for road and rail transportation.

2. The Former Songdo Amusement Park Transformed into a High-Tech 

Industrial Complex

FEZ Expanding to the Former Songdo Amusement Park

Area 3.16 ㎢

Budget KRW 3.2 billion

Period 08.2023 – 08.2025(24 months)

Progress

04.2023 – Establishing the contract-promotion plan

08.2023 – Contracting and starting services

09.2023 – Kickoff meeting

Upcoming Plan

Late 2024 - Applying for FEZ designation

Songdo Amusement Park in Yeonsu-gu was a representative vacation spot for Incheon residents. Virtually every citizen born and raised in Incheon has memories of this park. It was opened in 1937 as an amusement park with a saltwater pool, later reopening in 1963 with more modern facilities, such as an artificial beach drawn from the sea. This park will now be transformed once again into an FEZ.

When it was designated as the nation’s first amusement park facility in 1970, the site began to fill up with tourists. Although this amusement park received much love over the next few decades, it fell into its earnest decline around 2008. After its closure, the 910,000 ㎡ area of the amusement park was designated as the Songdo Tourist Complex. However, in 2014, the plan to create the tourist complex became invalid and ultimately came to nothing. Since then, the site has served as a complex for exporting used cars.

As it was recently mentioned as an additional site for FEZ designation, expectations were raised once again for the former Songdo Amusement Park. IFEZ is pursuing the designation of an FEZ for 3.16 ㎢ of land around Songdo International City, including this area. The plan is for this region to attract investment in the bio and high-tech industries, which are currently lacking, by featuring high-tech industries, tourism, leisure, and residential functions. IFEZ will carry out services with a total project cost of KRW 3.2 billion, and it plans to apply for additional designation in the second half of this year.

Though the land is currently tied to an amusement park, development restrictions will likely be lifted soon — as with the nearby areas. The surrounding conditions continue to improve, and the value of this site, which holds endless development potential, will increase significantly with its future release from the amusement park facilities and with designation as an ‘FEZ’.

3. The Southern End of Ganghwado Island

Strategically Enhancing Cultural Values by Revitalizing Local Features

FEZ in the Southern End of Ganghwado Island

Area 18.92 ㎢

Budget KRW 3.6 billion

Period 07.2023 – 12.2025(30 months)

Progress

05.2023 – Establishing the contract-promotion plan 

07.2023 – Contracting and starting services

09.2023 – Kickoff meeting

Upcoming Plan  Late 2024 – Applying for FEZ designation

IFEZ is pursuing a plan to designate a portion of the southern end of Ganghwado Island as an FEZ. Areas subject to review include Hwado-myeon, Gilsang-myeon, and Yangdo-myeon(18.92 ㎢, Ganghwa-gun). Ganghwado possesses a variety of historical-cultural values ranging from prehistoric times to the founding of Gojoseon, the Three Kingdoms period, and the Korean War. Additionally, this area boasts an abundance of farmland and beautiful natural scenery.

IFEZ plans to implement a differ-entiation strategy based on these characteristics, as it is advantageous to identify a development direction that takes advantage of different characteristics from those of existing FEZs. Therefore, in keeping with its nature as an FEZ, IFEZ plans to promote high-tech industries and attract industries that take advantage of the regional characteristics of Ganghwado Island.

This idea aims to attract multi-national companies and financial institutions connected with Yeongjong and Cheongna International Cities. To this end, in preparation for future inter-Korean exchanges, construction of the Yeongjong-Ganghwa section of the West Sea Peace Road(Phase 1 Yeongjong-Sindo(under construction) and Phase 2 Sindo-Ganghwa) must first begin in order to materialize the plan.

IFEZ is also considering the Seo-gu metropolitan area landfill(16.85 ㎢) near Ganghwado as an additional site for FEZ designation. The designation of a landfill in the metropolitan area as an FEZ requires the termination of its current use. However, the timing of the closure has not yet been clearly determined, meaning the specific implementation schedule remains to be set. Therefore, according to the recent agreement with Seoul, Gyeonggi-do, and the Ministry of Environment, the FEZ must find an alternative landfill site or create its own. Once the end-use period is cleared, IFEZ’s position is to solve the problem of underdeveloped conditions by pursuing ‘FEZ’ des-ignation for the area.

4. Yeongjong

The Cornerstone of Administrative Reform Expanded into an FEZ

Yeongjeong FEZ

Area 65.5 ㎢

Budget KRW 3 billion

Period Early 2024 – Late 2026(30 months)

Progress

05.2023 – Reflecting the budget

06.2023 – Preliminary review of the contract

Upcoming Plan

04.2024 – Carrying out services

Early 2024 – Contracting and starting services

In addition to Yeongjong International City, which is currently included in IFEZ, other areas of Yeongjongdo Island are also being promoted as free economic zones(65.5 ㎢ in Yeongjong-dong and Yongyu-dong). In 2003, IFEZ designated the Yongyu and Muui areas of Yeongjongdo Island(40 ㎢) as an FEZ. However, this designation was lifted in 2011 due to various development plans, including 8city, and the slow rate of progress.

Incheon judged that the region’s infrastructure and residential connectivity functions were lacking and that systematic development guidance was needed to prevent haphazard development. In particular, a planned and systematic development plan for undeveloped land was needed in response to changing regional conditions, such as the push for administrative system reform. Currently, the city is pursuing administrative system reform by merging Jung-gu and Dong-gu to form Jemulpo-gu with a population of 100,000 by 2026, and Yeongjong region is separately designating Yeongjong-gu.

Since March 1995, Incheon has maintained an administrative system of two counties(-gun) and eight districts(-gu). However, as the inland areas of Jung-gu and Dong-gu(the original downtown area of Incheon) declined and the population of the Yeongjongdo area and Seo-gu of Jung-gu increased, the need to reorganize the administrative system arose. In particular, Jung-gu had a problem of severe administrative inefficiency due to the separation of residential areas into the inland area and the Yeongjongdo area. Administrative reorganization has been promoted as a way to solve this problem.

As a cornerstone of this administrative system reform, Incheon last year promoted a preliminary review of the service to establish a development strategy for undeveloped land in Yeongjong. Once the review is completed in April this year, the city plans to sign a service contract and start construction in the first half of 2024.