Industrial locations include areas to support foreign investors such as free economic zones, foreign investment zones and free trade zones, and locations supported in the form of lease or sale. These areas are subject to tax relief as well as location support when certain requirements are met.
There are, in some cases, exceptions to those restricted by other legislation.
1. Free Economic Zone
A free economic zone is a special economic zone designed to create a business-friendly environment for foreign-invested companies and improve their employees’ living conditions. This area guarantees alleviation of various regulations and free business activities and is considered as a strong inducement to attract foreign direct investment.
Saemangeum(cancelled from Free Economic Zone on April, 2018) is a national project developed and supported by government in accordance with the Special Act on Saemangeum, and provides inexpensive land and flexibliity in the land utilization plan.
Free Economic Zones in the Country & Saemangum
North Chungcheong Province / Cheongju International Airport
The airport is located in the central inland area, guaranteeing the shortest access nationwide. It is the backbone of IT and BT convergence and home to next-generation strategic industries such as photovoltaic, semiconductor, and bio clusters. This region aims to be the hub of the Northeast Asian aviation maintenance industry.
Yellow Sea /
Pyeongtaek Port , Dangjin Port Pyeongtaek Port, located in the middle of the Pan-Yellow Sea region and an international cooperation hub, has been developed as an advanced base for export and import to China and a knowledge-based special economic zone. It is expected to become a cluster for global multinationals.
East Coast / Yangyang International Airport, Eastern port
The region is a repository for non-ferrous metal mineral resources and was the venue for the 2018 Pyeongchang Winter Olympics. It includes Korea's largest nonferrous metal cluster and is the center of green material industry, international logistics, and high-end marine tourism throughout all four seasons.
Daegu- Gyeongbuk / Daegu International Airport The region is the center of Korea’s key industry cluster including the top domestic automobile parts production, IT/SW industry, medical and steel industries, and offers abundant human resources.
Gwangyang Bay /
Yeosu Airport , Gwangyang Port Strategically located in the heart of the Pacific route, this area provides a natural environment and infrastructure for convenient production and logistics.
The region aims to become an international trade city that combines new industries with cultural tourism.
Busan / Jinhae
Gimhae International Airport/Busan New Port Busan Port, the world's sixth-largest port by volume, is the largest logistics hub in Korea and linked to major feeder ports in Japan, China and Russia. It is the center of industrial clusters of shipbuilding, automobiles and machinery, as well as recreation and leisure.
Incheon / Incheon International Airport/
Incheon Port
Highly efficient business environment centered on world-class Incheon International Airport, port infrastructure and international business complex. Development of logistics, medical care, education, high-tech industry
Saemangum
The area aimed to be a center of global free trade including economy, industry and tourism based on its rich industrial foundation such as Gunsan Industrial Complex.
2. Foreign Investment Zone
Foreign investment zones are categorized into three types: complex-type, individual-type and service-type. Complex-type and individual-type zone provide lower rent fees and additional reduction of rent fees and tax exemption when certain requirements are met. Service-type zones provide incentives for the support of rental fees but no tax exemptions.
Designated Foreign Investment Zones As of end-December 2018 Complex-type Individual-type Service-type
Number of FIZs 26 84 3
INFORMATION
Complex-type Foreign Investment Zones for each region
As of end-December 2018
Gangwon Province Munmak FIZ Chungcheongbuk Province
Ochang FIZ, Jincheon Sansu FIZ, Chungju FIZ
North Gyeongsang Province Gumi FIZ, Gumi Parts FIZ, Pohang Parts FIZ
Daegu Metropolitan City Dalseong FIZ
Busan Metropolitan City Jisa FIZ, Mieum Parts General Industrial Complex
Gyeongsangnam Province Sacheon FIZ, Changwon Parts FIZ Chungcheongnam
Province Cheonan FIZ, Inju FIZ, Cheonan5 FIZ, Songsan2 FIZ, Songsan2-1 FIZ
Jeollabuk Province Iksan Parts FIZ, Iksan Food FIZ Jeollanam Province
Daebul FIZ, Gwangyang Sepung General Industrial Complex Gyeonggi Province Jangan High-Tech 1 FIZ, Jangan High-Tech 2 FIZ, Dangdong FIZ, Oseong FIZ
Gwangju Metropolitan City Woljeon FIZ
Regional Rental Fee of Complex-type Foreign Investment Zones
as of end-December 2018 Complex Monthly
Rent(KRW/㎡)Complex Monthly
Rent(KRW/㎡)Complex Monthly Rent(KRW/㎡) Cheonan
(Chungnam) 310 Jangan 2
(Gyeonggi) 303 Wouljeon
(Gwangju) 1st 190 2nd 250
Chungcheong) 223 Pohang Parts 127 National Food
(Jeonbuk) 126
Jangan 1
(Gyeonggi) 258 Iksan Parts 103 Chungju
(Chungbuk) 160
Inju(Chungnam) 161 Changwon Nammun Parts
451 Songsan 2-1
(Chungnam) 290
Dangdong
(Gyeonggi) 383 Miuem Parts 425 Gwangyang
Sepung (Jeonnam)
248
Jisa (Busan) 438 Cheonan5
(Chungnam) 207
3. Free Trade Zone
It is a designated region by special law to focus on promoting certain industry.
A Free Trade Zone is a special area which guarantees free operation in the fields of manufacturing, logistics, distribution, and trade, and provides various privileges including tax exemption, rent fee reduction and supportive facilities.
In particular, it is more advantageous for import and export activities than any other region because it is a tariff reserve area.
Overview of Free Trade Zones
Overseas Free Trade Zone
Carrying goods into Ko rea Deemed as import (import clearance) Carrying domestic goods in Deemed as export(Tariff refund) Production and logistics
(Manufacturing and logistics industry) (Production, load and unload, transportation, storage, exhibition, trade)
Free Trade Zones in the Country As of end December 2018(Unit : Thousand ㎢) Airport-type Seaport-type Industrial complex-type
East Sea
4. Location of Specific Industry Development Areas
It is a designated region by special law to focus on promoting certain industry. Specialized industries and linkage industries for manufacturing are eligible to move into industrial land in the special zones according to regulations. Since operation and management of the complex are based on its own basic management plan, a company which intends to move into the complex should check the overall plan to ensure that occupancy is feasible.
Designated Regions for the Sites Promoting Certain Industries
Type of Special Zone Designated Region Related Law High-Tech Medical
Complex
Daegu Sinseo Innovation City Chungbuk Osong Bio-Health Science Technopolis
Special Act on the Designation and Support of High-Tech Medical Complexes Special Research and
Development Zones Daejeon, Gwangju, Daegu, Busan,
Jeonbuk Special Act on Promotion of Special Research and Development Zones Shindong, Dungok, and Doryong Special Act on Establishment of and Foreign-invested companies, companies
whose main purpose is export among companies that operate manufacturing businesses, knowledge businesses, domestic companies that relocated to Korea and companies operating a wholesale business mainly for export and import whose portion of export among sales accounted for 50 percent or more for one or more consecutive years
during the three preceding years are eligible to move in. In addition, a service company which intends to conduct business in loading and unloading, transport, etc., as well as public institutions are eligible to move in.
※ Related law : Article 10 of the Act on Designation and Management of Free Trade Zones
In Detail
Foreign Direct Investment Procedures
Incorporation Registration of
Capital Increase - Capital increase without consideration (capitalization of reserves, revaluation reserves, etc.) - Corporate merger/split, all-inclusive
stock exchange/transfer - Foreigner’s purchase, inheritance,
testation, donation