Invest Korea

Foreign investment zones are locations designated and announced by mayors or provincial governors to facilitate foreign investment and attract large-scale investors in accordance with the Foreign Investment Promotion Act.

Foreign investment zones are classified into complex-type, individual-type, and service-type zones. Each type has different conditions, requirements, limits, and investment incentives.

Complex-type foreign investment zones are designated for long-term leases at low cost, rather than direct ownership of land, considering the characteristics of foreign investment which requires sites for business operation for certain periods of time.

To occupy complex-type foreign investment zones, companies must be registered as a foreign-invested company where the share of foreign investment must be at least 30%. Eligible businesses (mostly manufacturing) are stipulated in a basic management plan. Limits on occupancy are as follows: contracted investment and the completion of factory establishment must be finished within five years from the date the occupancy contract is signed, and though the factory area may vary depending on the type of business, it must in general be at least 12% of the total leased area.

On the other hand, individual-type foreign investment zones are tailored for large-scale investors. Foreign investors can choose the location of their investment. Area is limited to the equivalent of 50% of the foreign investment amount invested by the occupying company.

Service-type foreign investment zones are designated for lease to foreign-invested companies that are engaged in high added-value services, such as research and development. The minimum investment amount in service-type foreign investment zones must be equal to or more than the price of the land or building to be leased, and the building area must be 40% of the standard factory area ratio, which is two times higher than the highest ratio. The foreign-invested companies must hire the minimum number of full-time workers per industry (five to fifteen workers). The execution of business plans (FDI, building construction area, hiring the minimum number of workers) must be completed within three years from the date of the occupancy contract is signed.