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HOME > Investment > Investment Incentive

Investment Incentive

We will introduce specialinvestment benefits in EFEZ.

The EFEZ provides FDI incentives via tax supports.

Exemption and Reduction of Tax

Incentives Main Contents Applicable Laws
  • Manufacturing · tourism industries (over $10 million), logistics industry · medical institutions (over $5 million), R&D (over $1 million and regular employment of more than 10 researchers with MA degree or higher)
  • Development agencies (over $30 million or total project cost over $500 million with more than 50% of Foreign Investment Ratio)
The Free
EconomicZone Act,
Sec. 16, ①.

The Special Tax
Control Law,
Sec. 121, 2,3
  • Tariff: tariff cuts by 100% for 5 years (applies to imported capital goods)
  • Acquisition · Property taxes (local tax): tax cuts by 100% for first 7 years and by 50% for next 3 years
Support for Infrastructure
  • Priority support of national treasury for infrastructure within the Free Economic Zone (government expenditure 50%, province and city expenditure 50%).
    ※ If Free Economic Zone Council considers and votes on agendas, up to 100% tax/tariff cuts.
The Free
Economic Zone
Act, Sec. 18.
Freedom of Foreign
Exchange Transaction
  • Foreign exchange transaction without reporting is permitted up to 20,000 dollars.
The Free Economic
Zone Act, Sec. 21.

Application Procedures

Tax Reduction Preliminary approval application- Submit to : Ministry of Strategy and Finance(Department for Overall foreign Economic Affairs 02-2150-7622)- Review to confirm eligibility for tax Exemption and reduction▶Foreign Investment Report (new or additional investment)- Application is possible until end of the tax year in which business commenced- Increased  investment: According to new investment- Modification : within 2 years from the occurrence of a cause▶Tax Reduction Request- Simultaneous investment reporting and request is possible- Request is still necessary in the case of advance tax reduction confirmation▶Tax reduction Decision and Notification- Decision deadline : Within 20 days of tax reduction request submission date- Notifying organizations : Applicant, Director of National Tax, Director of Customs Office,Head of the relevant Local Government

Business Support

Legal Grounds
  • Special Act on Designation and Management of FEZ
  • Foreign Investment Promotion Act
  • Local Regulation on Managing Public Properties
  • Foreign investor may lease the state and/or public properties for up to a 50 year period.
  • Lease fee shall be determined by applying the rate (above 10/1000) to the property value (which shall be determined by the agency in charge).
Exemption and Reduction of Lease Fee 100% of lease fee will be waived
  • Business involving cutting-edge technologies with more than $1 million investment
  • Foreign investor invests more than $20 million
  • Average daily employment of over 300 workers
  • More than 50% of the total production will be exported and 100% of parts, components, materials will be locally procured
  • 100% of the total production will be exported
75% of lease fee will be waived
  • Foreign investor invests $10~20 million
  • Average daily employment of 200~300 workers
  • More than 50% of the total production will be exported and more than 75% of parts, components, materials will be locally procured
  • More than 75% of the total production will be exported
  • Foreign investor invests more than $5~10 million
50% of lease fee will be waived
  • Average daily employment of 100~200 workers
  • More than 50% of the total production will be exported and 50~75% of parts, components, materials will be locally procured
  • About 50~75% of the total production will be exported
Purchase Foreign investor may purchase state or public properties through a private-negotiated contract at a price equal to the original property cost
Financial Support
  • The purchase price may be postponed or paid in installments: state property (postponed for up to one year, paid in installments within 20 years), public property (paid in installments within 20 years at the annual interest rate of 3%)
  • Companies in an industrial park may be subsidized: the difference in the lease fees and the parcel price (up to 50% of the regular lease fee and parcel price)

    * No double accounting will be allowed to a party who receives a cash subsidy

  • Cash subsidy: 5% of the investment amount (more than $10 million) within the upper limit of 5 billion won per company
  • Employment subsidy: where more than 20 persons are hired, a subsidy of 500,000 won per month may be paid for each new hire (for up to 6 months and the aggregate limit of 500 million won)
  • Education and training subsidy: 100,000~500,000 won per month for each new hire (for up to 6 months and the aggregate limit of 500 million won)


Main contents
Legal Grounds Special Act on Designation and Management of FEZ
Relief from Control on Labor Affairs
  • Unpaid holidays, unpaid leave period allowed.
  • Elimination of regulations regarding dispatched laborers and target businesses.
  • Not bound by the legal ban on the entrance into specially designated small company businesses by big companies
  • Exclude persons of national merit, the disable, and the elderly from employment duty
Relief from the policy controlling the overcrowding of the metropolitan Seoul area 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)
Improvement on financial environment Direct provision of routine business costs through foreigner exchange.(up to a limit of $10,000)
Others A foreign-invested firm may lease a state or public property for a maximum of 50 years, and may construct permanent fixtures in the leased property

Living Conditions

외국인 생활여건 지원
Main contents
Legal Grounds Special Act on Designation and Management of FEZ
Foreign Language Service Public documents are issued in foreign languages and the public agency accepts and processes public documents in foreign languages
Educational Environment Foreign educational institutions may be established with the approval of the Minister of Education and Science.
Medical Environment
  • Foreign medical institutions or foreigner-specific pharmacies may be established and run.
  • Special exceptions may be allowed for subsidiary businesses (e.g. convalescent hot spring) to be run by a medical institution.
  • A special law for foreign medical institutions will be enacted
  • Foreigner-only casinos will be allowed for foreign investors (who are investing more than $500 million).
  • Foreign broadcasting channels will be expanded, organized and operated through the local cable network.
  • FEZ will provide the residential lots for the construction of foreigner houses of up to 10% of the total number of housing supply in the FEZ.

Administrative Support

Main Contents
Plan Designation and Approval Consideration
  • In the case of Free Economic Zone designation, the following will be presumed to have been simultaneously designated, confirmed or approved :
    • Designation of urban development area and establishment of urban development plan
    • Designation of a state or local industrial park, an urban cutting-edge industrial complex
    • Designation of a tourism district or tourism complex
    • Designation of a logistics complex
    • Approval of the Minister 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 plan for river management, basic plan for water supply management, or basic plan for sewage management

Notice or Announcement

(Article 11 of FEZ Act)

  • 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 Agriculture Land Act.