Support to FDI

  1. Tax Support

For foreign investments that meet certain qualifications, corporate tax and income tax on business income, payment for technology introduction, earned income, etc. and customs duties on imported capital goods are reduced or exempted in accordance with the Resriction of Special Taxation Act. For properties acquired or held for the purpose of operating a business subject to tax reduction or exemption, acquisition tax and property tax are reduced or exempted under local government ordinances mandated by the Restriction of Special Taxation Act.

  1. Cash Grant

For foreign investments that satisfy certain conditions, the central and local governments of Korea may provide cash grants. In the process, the Korean government takes into account whether the relevant foreign investment involves advanced technology, the effect of technology transfer, the scale of job creation, whether the foreign investment overlaps with domestic investment, the propriety of the location in which the foreign investment is to be made, the effect on the local and national economy, the viability of the investment, etc.

ndustrial Site Support

Industrial sites, i.e. spaces for performing industrial activities, are divided into: planned sites that are developed under a plan; and individual sites that a business selects and develops for the construction of its own factory. ‘Planned sites’ refers to industrial locations developed under a plan in an area selected for establishing or developing factories collectively by the central or municipal governments or private businesses. It includes state industrial complexes, general industrial complexes, urban high-tech complexes, and rural industrial complexes. On the other hand, ‘individual sites’ refers to areas where individual businesses build their factory by obtaining the necessary permits or licenses by purchasing a factory site in an area outside an industrial complex.

The planned sites for promoting or inducing foreign direct investment include foreign investment zones designated under the Foreign Investment Promotion Act, free trade zones under the Special Act on Designation and Management of Free Trade Zones, and free economic zones under the Special Act on Designation and Management of Free Economic Zones. Among these, foreign investment zones are divided into complex type, individual type and service type. Individual type foreign investment zones can be regarded as individual sites.

The locations designated for foreign direct investment may vary in terms of eligibility for occupation, targeted industries, and investment incentives (rent, taxation, customs duty, and cash grant) depending on their purpose of designation. Therefore, it is advised to carefully examine and analyze the investment sites, even for planned sites where the approval procedure for factory establishment is easier compared to others.

  1. Policies for the Favorable Treatment of Foreign Investors

The Korean government provides foreign investors with a variety of benefits in relation to their arrival, departure, and stay. There are immigration checkpoints dedicated exclusively to processing foreign investors, and permanent residency is granted provided that certain conditions are met. Also, the Investment Consulting Center of KOTRA provides a one-stop service for foreign investors with services ranging from investment consulting to the resolution of grievances during an investor’s stay in Korea.

For further details anybody may look into “Doing Business in Korea” published by KOTRA or visit Website: