Investment Incentive
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Tax Reduction
(Foreign Investment Promotion Act article 9, Tax Restriction and Exemption Control Act article 121 of 2)
Reducing national tax for 7 years and local tax for 15 years as much as the ratio of foreign investment, from a tax year when the first income is generated after foreign investment company operates (Duty, VAT, and individual consumption tax have nothing to do with the ratio of foreign investment.
Basic Reduction Conditions
Reduction condition | Reduction period | ||||
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National Tax | Local Tax | ||||
A. Industrial Support Service Business and High Technology Business (Foreign-invested companies establishing plant equipment)
※ High Technology Business, Industrial Support Service Business
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Total 7 years (5 years: 100%, 2 years: 50%) |
for 15 years 100% |
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B. Individual Foreigner Investment Zone (FIZ) Enterprise (In case of establishing plant equipment)
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Division | Foreign investment | Employment | Total 7 years (5 years: 100%, 2 years: 50%) |
for 15 years 100% |
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① Manufacturing, Computer Progamming, System Integration and Management, Data Processing • Hosting Services | USD 30 million or more | ||||
② Tourist Hotel Business, Water Tourist Hotel Business and Korean Traditional Hotel Business, Special Resort Business, General Resort Business and Amusement Business, International Conference Facilities, Resort Condominium Business, Youth Training Facilities | USD 20 million or more | ||||
③ logistics project, social overhead capital (SOC) facilities | USD 10 million or more | ||||
④ R&D project | USD 2 million or more | 10 Masters or more who have three years of research experience | |||
⑤ Foreign-invested companies with at least 2 staff members | USD 30 million or more | ||||
C. Enterprises in complex type foreign investment zone |
Manufacturing | USD 10 million or more | Total 5years (3 years: 100%, 2 years: 50%) |
for 15 years 100% |
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Logistics | 5USD 5 million or more |
Reduction
Division | Reduction | Record date | Application of reduction | Remarks | |
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National tax |
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A·B: 100% for 5 years, 50% for next 2 years C: 100% for 3 years, 50% for next 2 years |
The fastest tax year among the following
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Until the end date of the tax year that includes the opening date of business (For capital increase, 2 years from its filing date) |
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Local tax |
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A·B·C: 100% reduction for 5 years from the opening date of business |
opening date of business (For acquisition before the opening date: date of acquisition) |
- | |
Others |
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A·B: Exemption of duties, special consumption tax and VAT C: Exemption of duties only |
- | For import declaration, apply to the customhouse director |
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Rent Reduction of National Property
Division | Contents |
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Legal basis | Foreign Investment Promotion Act article 13, Enforcement Ordinance for Same Act article 19 |
Subject of property | Individual type of foreign investment zone, national industrial complex, national property in general industrial complex |
Rent period | Within the range of 50 years (rent renewal is possible within the range of 50 years) |
Standard rental fee | More than 1/100 of land(property) price |
Reduction conditon | When the ratio of foreign investment is more than 30% or the first stockholder is a foreigner |
Reduction standard and ratio |
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Special Cases of Rent and Sale of National and Public Properties
Division | Supports |
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National and public properties in industrial complexes, agricultural industrial complexes and knowledge industrial centers |
Supporting to purchase national and public properties in industrial complexes at the construction cost If a lump sum payment is difficult, payment in installments is allowed
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Supporting Subsidies for Employment and Training
Standard for Financial Support
Division | Employment subsidy | Training subsidy |
---|---|---|
Support target | A foreign-invested company that has over 20 new regular employees after its registration | A foreign-invested company that has over 20 new regular employees after its registration |
Number of people | Provide subsidies to the extra workers when a foreign-invested company hires more than 20 new employees | Provide subsidies to all trainees, when a foreign-invested company hires and trains more than 20 new employees |
Support amount | Support monthly KRW 1 million at the most per person for six months | Support monthly KRW 1 million at the most per person for six months |
Payment period | Up to five years since the registration of a foreign-invested company | Up to five years since the registration of a foreign-invested company |
Cash Grant
Division | Supports |
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Support target |
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Support scale | Support more than a certain percentage of foreign investment (up to 30% of FDI, up to 40% of R&D center) |
Support content | Legal Use: Subsidies for employment and training, land purchase, rental fee, construction cost, infrastructure installation cost, capital goods and research equipment costs |
Others
Division | Supports |
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Infrastructure supports |
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※ Tax reduction and investment incentives are decided through prior consultations of the government departments and a vote from the Committee on Foreign Investment.