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Types of Support by Sector | |
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| 1. Advanced Technology and Service Business that Support Domestic Industry |
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Reduction of national and local taxes: |
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- National taxes: 10 years (100% for the first 7 years, and 50% for an additional 3 years)
- Local Taxes: 100% for 15 years |
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Rental of state land including national industrial parks at 1% of the total cost of the land |
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In Foreign Investment Zone, up to 100% rental may be exempted depending on the investment amount |
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Designation of the investment area as a Foreign Investment Zone for large scale FDI Projects |
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Tax reduction incentives on foreign capital goods for investment and industrial facilities |
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Corporate and income tax incentives for importing or supplying technology | |
| 2. Manufacturing |
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Business investing on a large-scale will be given special incentives including designation of the investment areas as a Foreign Investment Zone, foundation facilities, financial support to help cover development costs and tax reductions |
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| - Criteria : |
a) Companies investing at least USD 50 million.
b) Companies that hold at least 50% of the shares in the invested company and have at least 1,000 full-time employees
c) Companies investing at least USD30 million and having at least 300 full-time employees in all or part of a national or local industrial complex | |
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Criteria of renting or purchasing state property
- Rent :
50~100% deduction for companies that invest USD 5~20 million and companies that create 100~300 new jobs (1% land price)
- Purchase :
Foreign companies moving into a Foreign Investment Zone, companies investing over USD 500 million and companies that have between 500~1000 full-time employees will receive a 25~100% reduction in land price
- Purchasing in installments :
When purchasing local government property, the purchase price can be paid over a 20 year period at an annual interest rate of 4% |
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Industrial complexes :
- When moving into a national or regional industrial complex, companies will receive 100% exemption from land acquisition tax and registration tax- Property taxes and aggregate land taxes will be reduced by 50% one year. | |
| 3. Tourism and Logistics |
| (Tourism) |
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Tax benefits and financial support for companies that invest over US$20 million in tourist hotels, international convention centers, or construction companies that invest at least US$30 million to general leisure industries and general resort facilities industries by tourism promotion law. |
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Support upon purchase or lease of state land worth US$20 million: possibility to purchase the land under the free contract with Gyeonggi-Do. |
| (Logistics) |
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Support in Foreign Investment Zones:
An investment of at least USD 30 million in :
- Combined freight terminal business under the Freight Circulation Promotion Law.
- Joint collection and distribution complex formation and operation business under the Distribution Industry Development Law.
- Port facilities operation business under the Port Law.
- Logistics Business under the Law in Tax Exemption Limit in the Rear Complex of Ports
* Conditions : New investment must be reported by December 31, 2003. |
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Support by Sale or Lease of States Property: State property in a Foreign Investment Zone or an area of at least USD20 million investment may be sold through free contract, or may be leased for not more than 50 years at a 50~100% reduction in rent | |
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| 4. SOC Projects |
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Items: 34 project items including roads, railways, seaports, etc. specified in the civil investment law on social overhead capital. |
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Reduction of charges including taxes
- Exemption from or reduction in acquisition tax, registration tax, VAT, etc. on a case by case basis under tax exception limit law, local tax law,
etc. |
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Financial Support for facilities that will revert to government:
- A subsidy or a long-time loan may be given during construction or operation to allow the investor to carry out the business effectively | |
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Shared Exchange Risk
- In cases where exchange rate change brings about loss or gain on foreign exchange transaction, tall age may be adjusted; financial support may be given by the state or local autonomous body or the gain on foreign exchange transaction may be redeemed. |
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Claim for Purchase and Termination of Agreement
- -Central or local government will purchase completed facilities if required, including contingent business when it becomes impossible to construct or manage/operate SOC due to inevitable reasons such as acts of God. | |
| 5. Joint Venture |
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The Gyeonggi Government will assist in business partner search and provide a variety of administrative services to reduce bureaucracy and simplify the investment procedure. |
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The Gyeonggi Government will provide interpretation and translation service to aid in contract negotiations. |
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The Gyeonggi Government will assist in business search as well as offer tax incentives |
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Advanced technology and high-tech support service industries will receive tax reductions, rent and purchase of state properties, support for foundation facilities and financial support for development costs and mandatory fees |
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Depending on the size of investment, manufacturing industry sites may be designated Foreign Investment Zones, making them eligible for tax reductions, rent and purchase of state property, support for foundation facilities and financial support for development costs and mandatory fees. | |
| 6. Capital Goods |
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Facilities and equipment imported for investment and use in advanced technology businesses may be exempted from customs duties, special taxes consumption and value added taxes.
* Capital goods imported for investment and use in non-advanced technology businesses are not exempted from tax. | |
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| 7. Importation of Technology |
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The import of the advanced technology and its royalties are exempt from corporate tax and income tax for five years |
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Depending on the technology import contract, foreign technical assistants sent to Korea may be exempt from earned-income tax for five years | |
| 8. Export-oriented Business |
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Companies which export over 50% of their total output will receive a 50~100% reduction when renting state property. |
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Companies which export over 50% of their total output will receive a 25~50% reduction when purchasing state property. | |
| 9. Support for Use of Domestic Raw Materials |
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Manufacturing companies purchasing at least 50% of their total raw materials domestically will receive a 50% reduction when purchasing and a 50~100% reduction when renting state property (depending upon the percentage of raw materials used). | |
| 10. Investment by Expatriate Koreans |
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The Special Act on the Immigration and Legal Status of Korean Expatriates Overseas, promulgated on September 2 1991, lifted various limitations on the activities of Korean expatriates. Accordingly, they can invest in any field and their legal rights are recognized. |
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Korean expatriates can freely buy/sell real estate and make banking and foreign exchange transactions with the same rights as Korean citizens, thus enjoying social welfare benefits. | |
| 11. Business Extension and Site Relocation |
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Companies that wish to extend their business or move to Gyeonggi Province from another region will receive a 50~100% reduction when renting state property | |
| 12. Promising Foreign Small and Medium-Sized Business |
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Gyeonggi Province provided support only to promising foreign-invested small and medium-size companies with less than a 50% foreign investment ratio. But after 1999, it extended support to all foreign invested companies. |
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Promising small and medium-sized companies selected by Gyeonggi Province will be eligible for loans for operating capital, restructuring capital, credit guarantees and other assistance |
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Selected companies are also provided with a variety of information and materials about industry, technology and management | |
| 13. Real Estate Acquisition |
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Following the opening of the real estate market in April 1998, foreigners and foreign corporations have the same rights as Korean citizens to buy and sell real estate in Korea |
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A 100% exemption from acquisition tax and registration tax is given for 15 years to projects for which the Minister of Finance and Economy has made a tax reduction. |
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Gyeonggi Province will fully investigate any complaints regarding real estate transactions, permits and approval procedures. | |
| 14. Employment and Training Subsidies |
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Employment subsidies may be provided to companies with foreign investment exceeding 30% or having a foreign principal shareholder that construct or expand factory facilities and employ a number of full-time workers not less than specified by the provincial governor.
- Rate: Not more than KRW500,000 per employee per month . |
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Training subsides may be provided to companies with foreign investment exceeding 30% or having a foreign principal shareholder that construct or expand factory facilities, conduct training in public vocational performance development and training facilities, etc. and employ a number of full-time workers not less than specified by the provincial governor.
- Rate: Not more than KRW500,000 per employee per month for a maximum of 6 months. | |
| 15. Residential Support |
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Support for living environment facilities including medical, educational and housing may be provided to companies established in large-scale Foreign Investment Zones (not less than 166,500 m2 - Final decisions will be made by the foreign investment committee (presided over by the Minister of Finance and Economy) |
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Various services will be provided to foreign employees working at foreign-invested companies including help in purchasing housing, receiving and extending visas and arranging schools for dependents children | |
