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National/Public Property Lease & Rent Reduction

Land, factories, and other national or public properties owned by the country or local governments may be used, leased or sold to foreign-invested companies through a private contract. The lease period may be up to 50 years. Upon maturity of the lease period, the contract may be renewed up to 50 years, or factories and other permanent facilities may be constructed on leased land on the condition that they will be donated to the country, local governments, or returned to the original state.
When leasing national property, rents may be reduced up to 50-100% through certain procedures for foreign invested areas, or for lands that are in the national·local·urban hi-tech industrial complex and agriculture & industry complexes, according to the law on industrial location and development. In leasing public property, the rent may be reduced according to local government regulations.
Eligibility & Rate of Rent Reduction for National Property
Eligibility & Rate of Rent Reduction for National Property : Reduction Rate, Reduction Eligibility, 100% Reduction, 75% Reduction, 50% Reduction
Reduction Rate Reduction Eligibility
100% Reduction
  • Foreign invested companies in stand-alone type foreign investment areas
  • High degree technology businesses of 1 million USD and over in complex type foreign invested areas
75% Reduction
  • Manufacturing businesses of 5 million USD and over in complex-type foreign investment areas
  • Businesses contributing to SOC expansion, industry structure adjustment·local government financial independence
50% Reduction
  • Land within national industrial complex, local industrial complex, urban hi-tech industrial complex, and agricultural complex
Rent Reduction Application Procedures
Application for Rent Reduction for National Properties
Please refer to the information below
  • Application for rent reduction for national properties (foreign-invested companies)
  • Check for eligibility for reduction (national property management office)
  • Reduction decision
Large view of images
Application for Rent Reduction for Public Properties
Please refer to the information below
  • Application for rent reduction for public properties (foreign-invested companies)
  • Check for eligibility for reduction (head of local government)
  • Reduction decision
Large view of images
Required documents
  • Documentary evidence of facility operator, or eligibility for rent reduction
  • 1 copy of lease contract on land etc.
If it is acknowledged that lump-sum payment of purchasing costs for land is difficult, the payment due date may be delayed, or the payment may be made in installments (4% and less interest rate applied). For national properties, the payment due date may be delayed up to 1 year or paid in installments for up to 20 years. For public properties, the payment due date or installments are possible according to regulations.

Project Manager (PM) Designation and Operation

In order to efficiently support foreign investors or investments by foreign-invested companies, the government designates and operates project managers. Project managers may be designated for an individual foreign investor or a foreign-invested company (designated by the head of KOTRA. Designated PM is notified to the foreign investor or foreign-invested company.
Eligibility for Project Managers
  • Employee of KOTRA
  • Dispatched officer
  • Officials or employees of foreign investment related central administrative institutions, local governments, government investment institutions and public institutions under the basic law on government
  • investment management. These cases require approval from the heads of institutions or organizations.
Key tasks include collection and provision of data or information, interview setup upon the request of foreign investors or foreign-invested companies, foreign investment related support and coordination of administrative matters as proxy, provision of help with housing lease and school entrance to help executives and staffs of foreign-invested companies and their families settle, and all other foreign investment related tasks.

Exception to Restriction on Total Investment Amount

Under the Anti-Monopoly Act and the Fair Trade Act, domestic companies have restrictions on their investments. Company groups with more than 10 trillion won in total assets of domestic companies in the same company group (total investment amount restricted company group) are not allowed to acquire or hold shares of other domestic companies above the amount of 40% of its net asset (investment limit amount).
However, there are no restrictions on the total investment amount in acquiring or holding shares of foreign invested companies under the Foreign Investment Promotion Act with one foreigner holding more than 10% of issued shares. But, if the portion of the company's shares held by foreigners falls below 10% of the total shares issued by the company, the exception to the total investment amount shall apply for only 6 months after such the date.
※ Company Groups with Total Investment Amount Restrictions (as of April 13, 2007)
11 company groups: Samsung, Hyundai Motor, SK, LG, Lotte, GS, Kumho Asiana, Hanjin, Hyundai Heavy Industries, Hanhwa, Doosan.

New Factory Construction in the Capital Area

In overcrowding control areas, managed growth areas and nature preservation areas, new constructions·expansions, transfer, or change to business type are banned for factories of 500 and wider square meters in the building area (including apartment-type factories).
However, foreign-invested companies within managed growth areas that satisfy the following conditions are allowed to newly build or expand factories 500 square meters and larger in building area. However, the exception only lasts until 2010.
  • 25 industries including industrial gas producers etc.
  • 50% and over of foreign investment ratio. But foreign investment ratio may be 30% and over for foreign invested companies establishing factories in industrial complexes stipulated in Paragraph 3, Article 7 of the Act on Industrial Location & Development according to Paragraph 2, Article 7, or Articles 6, 7 of the same act for the purpose of attracting foreign invested companies prior to December 31, 2003.
Business Categories Permitted for New Construction/Expansion
  • 24121 Industrial gas manufacturing
  • 24212 Bio-pharmaceuticals manufacturing
  • 26129 Other industrial glass product manufacturing
  • 29172 Air conditioning system manufacturing
  • 30013 Computer in·output device and other peripheral device manufacturing
  • 30021 Copy machine manufacturing
  • 32111 Diode, transistor and similar semiconductor manufacturing
  • 32112 Electronic integrated circuit manufacturing
  • 32192 Printing circuit board manufacturing
  • 32196 LCD manufacturing
  • 32201 Wired communication device manufacturing
  • 32202 Broadcasting and wireless communication device manufacturin
  • 32300 Receiver and other A/V device manufacturing
  • 33199 Other medical device manufacturing
  • 33213 Electromagnetic measuring, testing and analyzing device manufacturing
  • 33215 Speedometer and meter manufacturing
  • 33216 Auto measuring and controlling device manufacturing
  • 33220 Industrial process control device manufacturing
  • 33321 Fiber optic and optic element manufacturing
  • 33322 Camera, projector and other related device manufacturing
  • 34301 Automotive engine part manufacturing
  • 34302 Automotive body part manufacturing
  • 34309 Other automotive part manufacturing
  • 35310 Airplane, spacecraft and auxiliary device manufacturing