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FAQ

  • Title
    What are the rules for establishing factories in the Seoul Metropolitan Area?
  • Content

    Act but also overpopulation control area, growth management area and nature conservation area classified by The Seoul Metropolitan Area regulates the permission or restriction of the establishment, expansion or relocation of a factory in accordance with not only the regulation on total quantity of the factory establishment of the Seoul Metropolitan Area Readjustment Planning the asterisk of the enforcement ordinance of the Industrial Cluster Development and Factory Establishment Act. 

  • Title
    What is the procedure for a tenant company in an industrial complex to sell its factory after its construction?
  • Content

    The company will have to declare its sale to the management agency in accordance with Article 39.2 of the Industrial Cluster Development and Factory Establishment Act and Article 50 of the enforcement ordinance of the Act.  

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    In the case, the sale price will be calculated by multiplying the acquisition cost by the producer price index from the date of acquisition and adding that to the maintenance cost of the industrial complex. The sale price of the factory will be decided considering the market value appraisal. 

     

  • Title
    What is the procedure for a factory acquisition in an indsutrial complex through auction?
  • Content

    The party, which has purchased an industrial site or a factory of tenant companies or support agencies in accordance with auction or other laws stated under Article 40 of the Industrial Cluster Development and Factory Establishment Act, will have to sign a move-in contract within a year from the date of acquisition.

    The acquisitor, who has failed to sign a move-in contract within a year from the date of acquisition and is not  the Korea Land and Housing Corporation, Korea Water Resources Corporation, Small & Medium Business Corporation and financial institutions, will have to transfer the acquisition to a third party within a year.  

  • Title
    Should a company meet the standard factory area ratio even after the construction and registration of a factory in accordance with the standard factory area ratio?
  • Content
    The standard factory area ratio is a system to prevent establishing factories for the purpose of speculation. Therefore, a company needs to maintain the construction area larger than the standard factory area ratio.
  • Title
    Can a company, which does not have a factory in Korea but owns one abroad, register a factory?
  • Content

    Factory registration is when an administrative organization registers the fact that the corresponding place of business is equipped with the legitimate requirements in accordance with Article 2 of the Industrial Cluster Development and Factory Establishment Act and the enforcement ordinance of the Act. Therefore, if a company does not have a factory in Korea, it will not be possible to register a factory. 

  • Title
    What is the procedure for factory registration if a factory site has several lot numbers due to the factory expansion and supplement of additonal facilities?
  • Content

    A factory site that is composed of several lot numbers can be registered as a factory if the factories are connected. A factory, which is not connected with the others, will have to register as a separate one.    

  • Title
    To attract companies, can a local government purchase land or building in an industrial complex and rent it to a company?
  • Content

    The nation or a local government can provide sites to companies by purchasing industrial sites and factories in the industrial complexes. In the case, the company should sign a move-in contract with the relevant management agency in accordance with Article 38 of the Industrial Cluster Development and Factory Establishment Act.  

  • Title
    What are the types of industrial zones to attract foreign investment?
  • Content

    A foreign investment zone (FIZ) is divided into an individual-type FIZ and a complex-type FIZ. An individual-type FIZ was adopted to attract large-scale investors in the post Asian financial crisis period. A complex-type FIZ was established to attract small- and medium-sized foreign investors in the advanced industries. Since both types of FIZ aim to promote foreign investment, they were unified in 2004.

    A free trade zone (FTZ) is a special zone first adopted in 1970 along with the industrialization of Korea. A FTZ is a tariff-free zone to promote trade. There is no customs procedure for import of raw materials and export of products. Initially, FTZ was operated as a free export zone of the manufacturing industry. Then, a tariff-free zone for logistics was established. In 2004, they were unified. A FTZ and FIZ are similar in that the tenant companies will benefit from tax reduction and factory site rent. A FTZ, however, is a non-tariff zone to promote trade.

    A free economic zone (FEZ) has been adopted to swiftly build a foreigner-friendly business and living environment at a certain region. A FEZ is different to a FIZ for a FEZ is larger than a lower-level local government, its relevant authority holds the administrative jurisdiction and it creates a foreigner-centered environment including building foreign schools and hospitals. 

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