InvestKorea | What Investors Need to Know | Operational Issues

Factory Establishment

A factory is established by selecting the factory site, obtaining approval (authorization and permission) of factory establishment, building the factory and notifying the completion of the factory.

Definition of factory & factory establishment process

Factories as defined in the Industrial Cluster Development and Factory Establishment Act

Factories are places of business prescribed by Presidential Decree for conducting manufacturing business prescribed by Presidential Decree, equipped with buildings or structures, manufacturing facilities, such as machinery or equipment which constitutes manufacturing processes, and their ancillary facilities.

Factory establishment

Factory establishment is a concept that covers all of the following processes: approval of factory establishment, expansion, relocation, change of business category, and installation of manufacturing facilities; registration of a new factory (smaller than 500m²); and revision of registration.

Factory establishment process

Factory Establishment
Classification	Process	Reference
Factory site selection	Decide type of factory site Site inspection and analysis (regional, individual) Select site Draw up factory establishment plan Prepare required documents Civil engineering and design (individual) Application for factory establishment approval (incl. agenda processing) Approval of factory establishment or movie-in agreement (individual sites) Completion of civil engineering work (individual sites) Construction design Application for permission of construction Usage test and notification of completion of factory establishment Issuance of factory registration certification (notification)	Land use and industrial complexes
		Required documents - Land use plan confirmation - Cadastral (forest) map - Certified copy of land and building register
		Feasibility of the site Environment-related matters Feasibility of construction permission Feasibility of logistics and labor supply and demand
Approval, authorization, permission of factory establishment		Required documents (Individual sites) Documents for application for legal fiction Local governments: deliberation of civil petitions Industrial complex management organization
		Departments responsible for authorization and permission of factory establishment
Factory construction and notification of completion of construction		Installation of manufacturing facilities for factory operation Land merger and change in land category Within 2 months from the installation of machinery Notification of completion of factory establishment and confirmation on whether the notification matches the approved matters Notification within 3 days from acceptance of factory establishment completion notification