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East Coast Free Economic Zone (EFEZ)

Date

2014.05.27

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5285

■ Development Plan

Item	Location	Area(㎢)		Development Concept	Project Budget (KRW 100 mil.)
Item	Location	1st phase	Stepwise	Development Concept	Total	Central Government Budget	Local Government Budget	Private Investment
Total	4 districts	8.25	13.76		13,036 (100%)	1,196 (9.2%)	1,574 (12.0%)	10,266 (78.8%)
Bukpyeong ICI (International Compound Industry) Area	Songjeong-dong (Donghae Port) and Danbong-dong, Donghae-si	4.61	1st phase:4.61 2nd phase:0.87	ㆍNon-ferrous metal/Hi-tech material parts complex ㆍLogistics and Distribution Complex ㆍForeign Investment Complex	7,854	560	560	6,734
Mangsang Flora City	Mangsang-dong, Donghae-si	1.82	1st phase:1.82 2nd phase:2.64 3rd phase:1.37	Development of maritime/compound luxury tourist city	2,665	186	186	2,293
Okgye Hi-tech material convergence industry district	Okgye-myeon, Gangneung-si	0.71	1st phase:0.71 2nd phase:0.63	ㆍHi-tech material parts and R&D ㆍLease-based industrial complex for foreign companies	966	294	672	-
Gujeong Zero-carbon city	Gujeong-myeon, Gangneung-si	1.11	1st phase:1.11	Apartment + commercial/office + International schools + Specialized colleges, etc.	1,551	156	156	1,239

■ Locations

■ Incentives

Incentives			Description				Laws/Regula-tions
Tax Reduction	5 Year	Condition	○ Manufacturing/Tourism (USD 10 mil. or more,) Logistics/Medical business (USD 5 mil. or more) ○ Developer				Item 1, Article 16 of Free Economic Zones Act Article 121-2, Restriction of Special Taxation Act
		Benefits	○ Corporate Tax/Income Tax (Taxed by the central government): 100% tax reduction for 3 years, 50% for 2 more years ○ Customs Duty: 100% for 5 years (for imported capital goods only) ○ Acquisition Tax/Property Tax (Local Tax): 100% exemption for 15 years
	7 Year	Condition	○ Manufacturing (USD 30 mil. or more,) tourism (USD 20 mil. or more) and logistics business (USD 10 mil. or more) ○ R&D (USD 2 mil. or more and full-time employment of master's degree-level researchers by 10 or more)
		Benefits	○ Corporate Tax/Income Tax (Taxed by the central government): 100% tax reduction for 3 years, 50% for 2 more years ※ The tariff, acquisition tax, and property tax remain the same as those in 5-year conditions.
Property Support	Lease		○ 50-year lease for publicly owned land ○ The rent is 10/1000 of the land price.				Items 2 and 4, Article 16 of Free Economic Zones Act
	Rental Fee reduction			100%	75%	50%
			Foreign investment (USD 10 mil.)	2	1~2	0.5~1
			Employment (number of employees/day)	300	200~300	100~200
			Export ratio (%)	100	75~100	50~75
	Purchase		○ Non-tender contracts with the price set at the development cost without margins (publicly owned properties)				Item 5, Article 16 of Free Economic Zones Act
Cash Support	Condition		○ Foreign direct investment company registered in Korea wherein the ratio of shares owned by foreigners is 30% or more ○ Building or expanding factories to make parts or materials related to hi-tech. - Investment amount of USD 10 mil. or more to build a new -- or expand an existing -- R&D facility hiring 10 or more researchers with masters' degrees				Article 14-2 of Foreign Investment Promotion Act
	Subsidies		○ To be determined by discussion, at least 5% or more of the minimum FDI
Infrastructure Support			○ Priority in support grants from the central government’s fund for infrastructure in FEZ. (50% from the central government budget, 50% from the local budget)				Article 18 of Free Economic Zones Act
Mitigation of the labor regulation			○ Exemption from the duty to hire disabled people, regulations on the duration and type of works available for dispatched workers lifted; the employer may also give their employees unpaid vacations.				Article 17 of Free Economic Zones Act
Freedom of foreign exchange transactions			○ Foreign exchange transactions possible without reporting to the authority within the limit of USD 10 mil.				Article 21 of Free Economic Zones Act
Administrative support			○ One-Stop administrative support (FEZ Bureau, PM-designated) ○ Official letters from public offices may be sent in English if requested by a foreign direct investment company.				Article 27-2 of Free Economic Zones Act Article 20 of Free Economic Zones Act

□ Investment Contacts

ㆍInvestment Inducement Team 1, Office of East Coast FEZ: T.+82-33-539-7653
www.efez.go.kr
ㆍGangwondo Global Business Department: T.+82-33-249-2082

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