Invest KOREA

If the employment status has been modified from a fixedterm worker to a temporary agency worker merely to evade the maximum contract period limit for a fixed-term worker (two years), this is technically considered a measure to avoid the regulations of Article 4 of the Act on the Protection, etc. of FixedTerm and Part-Time Workers. In this case, it should be deemed that the fixed-term worker is hired for more than two years under Article 4(2) of the same Act, and it is reasonable to regard the worker as having signed a non-fixed term employment contract.

A part-time employee means an employee whose contractual work hours per week are shorter than those of a full-time employee engaged in the same kind of work at the workplace concerned. Some regulations do not apply to part-time employees whose work hours are significantly shorter than those of a fulltime employee (those who work less than 15 hours per week). The relevant laws are as follows: ◎ Article 8(2) of the Act on the Protection, etc. of Fixed-Term and PartTime Workers states that no employer shall give discriminatory treatment to any part-time employee on the ground of his/her employment status compared with full-time employees engaged in the same or similar kinds of work at the business or workplace concerned. There is no different treatment per the length of the work hours among part-time employees. ◎ The Labor Standards Act states that the terms and conditions of employment of part-time employees shall be determined on the basis of the relative ratio computed in comparison to those work hours of full-time employees engaged in the same kind of work at the pertinent workplace. It also states that the criteria and other necessary matters to be considered shall be prescribed by Presidential Decree. However, according to Article 18(3) of the same Act, holidays (Article 55) and annual paid leaves (Article 60) do not apply to employees whose contractual work hours are significantly short (those who work less than 15 hours per week). Therefore, not applying the holiday and annual paid leave clauses to employees who work less than 15 hours per week on an average of four weeks cannot be considered discriminatory treatment.

The discrimination rectification system was newly introduced under the Act on the Protection, etc. of Fixed-Term and Part-Time Workers and the Act on the Protection, etc. of Temporary Agency Workers. It was introduced to prohibit unfavorable treatment against non-regular workers on the ground of his/her employment status compared with other workers engaged in the same or similar kind of work at the business concerned in terms of wages or other working conditions without any justifiable reasons. The aforementioned non-regular workers include fixed-term employees, part-time employees, and temporary agency workers, while the aforementioned other workers include non-fixed term contract workers, full-time employees, and directly-employed workers. Any non-regular worker who has received discriminatory treatment may request a correction to the Labor Relations Commission. ◎ The prohibition of discriminatory treatment against non-regular workers is not meant to demand the same treatment as regular workers in all working conditions, but to ban unfavorable treatment without any reasonable ground. Different treatments are allowed on reasonable grounds, such as differences in labor intensity, labor quality, authorities, and responsibilities. The discrimination rectification system for non-regular workers applies to all businesses or places of business with five full-time employees or more.

A reduction in the foreign investment amount by more than 30 percent is a significant change, not a minor one. In this regard, the foreign-invested company and the local government should hold a preliminary meeting with the Ministry of Trade, Industry and Energy to revise the project plan and submit the amended project plan to the Ministry of Trade, Industry and Energy for the foreign investment committee’s deliberation. The mayor/provincial governor should subsequently put up a notice of change in FIZ designation. The foreign-invested company should attach the notice of change and report a change in tax reduction or exemption and then attach the notice of change and report change of tax reduction or exemption to the Minister of Economy and Finance.

It is possible if an FIZ tenant company with a foreign investment ratio of 30 percent or higher requests that its contractor without any foreign investment be permitted to use a part of the tenant company's factory facilities in order to shorten the process and cut costs, and obtains the agreement of the Minister of Trade, Industry and Energy. At the request of the tenant company, the FIZ management agency may sign a contract with the tenant company's contractor permitted to move in. The contract should be renewed every five years, and its period should be within the remaining period of the contract with the tenant company. The contractor is allowed to occupy up to 30 percent of the total factory area of the tenant company.

Yes, but only when recognition of the foreign investment committee it is obtained. Article 23(3) of the Guidelines for Operation of Foreign Investment Zones defines the case of installing new factory facilities and the case of installing new facilities as follows: ◎ Where factory facilities (referring to a place of business in the case of a business other than manufacturing business categorized in the Korean Standard Industrial Classification) are newly installed or where any machinery or installations, equipment are newly installed in an existing building ◎ Where the same corporation installs any factory facilities, or any machinery, installations or equipment, which are recorded on a separate accounting book from that of the existing factory facilities ◎ Where business activities are conducted after obtaining an approval to use a building under the Building Act after acquiring a building the construction of which is incomplete (However, the Foreign Investment Committee may choose not to acknowledge it depending on the stage of progress of the construction work.)

It is possible. In the case of a manufacturing business, a foreigninvested company has to invest a minimum of USD 30 million to be designated as an individual FIZ. However, provided certain requirements are met, two or more foreign-invested companies can combine their invested amounts to meet the requirements for an individual-type FIZ designation. ◎ Article 18(2) of the Foreign Investment Promotion Act stipulates the designation of an individual-type FIZ by two ore more foreign investors. Article 25(5) of the Enforcement Decree of the same Act defines specific requirements as follows: – The total amount invested by two or more foreign investors shall be no less than the amount of foreign investment for the business category in the individual-type FIZ. – The business operated shall be a business subject to designation as a an individual-type FIZ. – The facilities shall be placed adjacent to each other.

There are restrictions, but they are limited to restriction of permitted business categories, which are also applied in general industrial complexes. ◎ The following business categories are eligible for occupancy in a complex-type FIZ. Business categories allowed to move into each FIZ are determined by the basic management plan for each complextype FIZ, under Article 10 of the Guidelines for Operation of Foreign Investment Zones. – Businesses involving technologies for new growth engine industries prescribed under Article 121-2(1)1 of the Restriction of Special Taxation Act – Businesses applying or manufacturing advanced technologies or advanced products defined under Article 5 of the Industrial Development Act – Research institutes affiliated with enterprises under subparagraph 3(c) of Article 2 of the Special Act on Support of Scientists and Engineers for Strengthening National Science and Technology Competitiveness and research and development businesses under subparagraph 4(a) of Article 2 of the same Act – Businesses prescribed by Articles 25(1)3(a) and 25(1)3(b) of the Enforcement Decree of the Foreign Investment Promotion Act – Other business categories that a management agency determines, taking account of the industrial characteristics of the relevant region ◎ Before signing the tenancy contract, a company shall review the basic management plan of the FIZ that it wishes to move into and check which business categories are permitted.

An FIZ tenant company that is provided a leased site may apply for cash grant. However, calculation of the cash grant ceiling shall be based on the Operation Guidelines for the Cash Grant System, and the amount of reduced or exempted rent that the FIZ tenant company has received until the cash grant contract is signed shall be included in the cash grant ceiling, resulting in a reduced cash grant amount. ※ Related regulations: Article 10 of the Operation Guidelines for the Cash Grant System

No tax reduction or exemption benefits are provided for service-type FIZ tenant companies under the Restriction of Special Taxation Act. ◎ The Restriction of Special Taxation Act defines individual-type FIZ and complex-type FIZ tenant companies as eligible for tax reduction or exemption under Article 121-2(1)2 and Article 121-2(1)2-5. Service-type FIZ tenant companies are not included.