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Application Criteria for Local Investment Promotion Subsidy

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Application Criteria for Local Investment Promotion Subsidy

Grounds: MOTIE Notice No. 2023-243 (effective on January 1, 2024)
지방투자촉진보조금 지원기준 표로 지역구분,보조금유형,지원비율(대기업,중견기업,중소기업),국가의 보조비율 정보 제공
By Region Type of Subsidy Scope of Subsidy Rate of State Subsidy
Large-Sized Enterprises Middle Market Enterprises SMEs
Balanced Growth
Middle region
(Jeonju, Gunsan,
Iksan, Wanju)
Location - Within 15% of land purchase price Within 30% of land purchase price Up to 65/100 of subsidy
Equipment Within 6% of equipment investment Within 8% equipment investment Within 10% equipment investment
Balanced Growth Lower
Lower
(Other regions)
Location - Within 25% of land purchase price Within 40% of land purchase price Up to 75/100 of subsidy
Equipment Within 9% of equipment investment Within 12% of equipment investment Within 15% of equipment investment
Industrial Crisis
Response
Special Region (Materials, Parts, Equipment Enterprises)
Location - Within 30% of land purchase price Within 50% of land purchase price Up to 75/100 of subsidy
Equipment Within 12% of equipment investment Within 20% of equipment investment Within 25% of equipment investment
지원대상 및 지원범위에 대한 표
Eligible Enterprise
& Scope of Support
  • Investment companies eligible for subsidies shall be limited to those in manufacturing, information and communications industry, and knowledge service industry while engaging in New Establishment and Extension (Art. 9 ), Mutual-Growth Jobs (Art. 10-2), and Local Enterprises in the Kaesong Industrial Complex (Art. 12).
    * Regulation for exceptional support for enterprises which are not eligible for it, including construction business (approval required in the deliberation that main business is manufacturing)
  • It is necessary to objectively prove the fact of closure at the time of purchase of an abandoned building (electricity and water bill payment confirmation and on-the-spot inspection of Complex Corporation on-site inspection)
  • The total sub (criteria that determines the distributed amount) supported to a single project should not exceed KRW 10 billion (KRW 15 billion for mutual-growh job companies), and the total amount of state funds supported to a single company should not exceed KRW 20 billion.
Relocation to Provincial Area
from Seoul Metropolitan Area
  • (Existing Business)
    1. ① An enterprise which has operated its business for at least three consecutive years or has its head office, research institute, etc. in the Seoul Metropolitan Over-concentration Control Area.
    2. ②Over 30 full-time workers employed in the business site to be relocated
      * 10 or more full-time workers when relocating to development growth lower region or industrial crisis response regions (exception)
  • (To-be invested business sites)
    1. ①Relocation of independent business sites, such as the head office, factories, and research institutes, from the Seoul Metropolitan Over-concentration Control Area to provincial areas
    2. ②The category of business of the existing business sites and that of Korean Standard Industries Classification shall belong to the same sub-classification (three digit number)
    3. ③At least 30 full-time workers + Over KRW 1 bn investment (KRW 30 bn for large sized companies)
    4. ④Closure or sale of the existing business site is required before the completion of investment in it (If there are unavoidable reasons, the sale is required before the end of the business period)
New Establishment or Expansion
in the Province
  • (New Establishment) A new business site shall be purchased for the use of new construction, change of use of an existing building, or purchase of an abandoned building when facilities are installed in it
  • (Expansion) Increases in the total floor area of the building at the existing business site
  • (Requirements)
    1. ① Operating in the manufacturing industry, information communication industry and knowledge service industry for more than one consecutive year in Korea
    2. ② More than 10 full time workers in existing business sites (all business sites located in Korea)
    3. ③ 10% of the existing business sites or more (min. 10 ppl) of new full-time workers at invested business sites
      * In the case of SMEs with 20 or more, MMEs with 30 or more, and Large enterprises with 70 or more full-time workers, it is deemed qualifying even when falling short of 10% of the existing site's full-time workers (furthermore, for MMEs in the national high-tech strategic industries, it is deemed qualifying when employing 20 or more full-time workers even when below the 10%)
    4. ④Investment amount of KRW 1 bn or more (large-sized companies, KRW 3 bn or more,
    5. ⑤Maintenance of existing business sites (prohibition of sale, closure, reduction of lease)
      * There is no obligation to maintain existing business sites in the Seoul Metropolitan Over-concentration Control Area
      * In case of the companies going through business restructuring, those reducing the existing business site (except when closing or selling all of the existing business sites) according to the business restructuring plan and make more new investment would not be disqualified from subsidy
      ** *If the existing business is disposed of within one year before subsidy application or after the date of investment MOU, it is disqualified from subsidy
    6. ⑥Those failing to meet the above-mentioned conditions still are able to make applications when belonging to the Article 10-9 of Notice, including future vehicles, autonomus driving accident cause identification technologies, etc.
Mutual-growth
local jobs
  • (Requirements)
    1. ①10 or more new full-time workers at the business site
    2. ②KRW 1 bn or more investment amount (KRW 30 bn or more for large-sized enterprises)
    3. ③Maintain existing business sites(Ban on sales, closure, and reduction)
      * Except for the business site located in the Seoul Metropolitan Over-concentration Control area and new corporate approvded by the Mutual Growth Local Job Deliberation Commitee
Exception Provisions
  • Additional points according to the number of new hires (2-10% added to equipment subsidy rate)
  • Enterprises whose main business engages in locally specialized industries : up to 10% added to equipment subsidy rate (large-sized companie 3%, MMEs 5%, SMEs 10%)
  • New business site is located in structurally enhanced industrial complex (Gunsan, Gunsan 2 National Industrial Complex, Iksan National Industrial Complex), Companies moving-in or investing in industrial complexes specializing in materials, parts and equipment, Companies moving-in or investing in high-tech investment districts, Companies moving-in or investing in National Innovation Convergence Industrial Complex, etc.: 2% added to equipment subsidy rate
  • Companies moving in Opportunity Development Zone (ODZ): 5% added to equipment subsidy rate
    → Additional points for locally specialized industries and for structurally enhanced industrial complex‧ industrial complexes specializing in materials, parts and equipment‧high-tech investment districts cannot be summed up)
  • Additional points for mutual-growth jobs companies (large-sized companies 3%, MMEs 5%, SMEs 10%) → Additional rates from new hires cannot be summed up
    * Maximum subsidy rate that can be additionally supported is up to 20% (up to 25% for companies moving in ODZ)
  • If main industry in the new business site belongs to one of the knowledge service industries in any of 'SW developing and supplying, telecommunication, computer programming, system integration and management, information and service, and R&D', preferential treatment for investment in construction investment and labor environment improvement facilities
Investment MOU
  • The conclusion of an investment MOU is required prior to the date of actual investment (Companies in the restructuring are deemed to have signed an investment MOU at the time of business restructuring plan approval, and a mutual-growth agreement with an enterprise creating mutual-growth jobs is regarded as an investment MOU)
  • When applying for location subsidy, the initial location contract signing date (when expanding from the initial area, the change contract signing date)
  • When applying for equipment subsidy, the initial construction reporting date (for companies in restructuring business, business restructuring plan approval date is considered the construction reporting date)
    * The investment MOU must not exceed 3 years from the date of subsidy application
Application
for Subsidy
  • Location subsidy : within 1 year from the date of the conclusion of the location contract, Equipment subsidy : within 3 months from the date of report on the commencement of construction (or within 3 months from the date of reporting the commencement of construction if it has come earlier)
    * Seperate application only for location subdisy is not allowed, location subsidy should not exceed equipment subsidy
  • Feasibility evaluation scores shall be 60 or higher (project performance scores 25 or higher)
    * Industrial Crisis Response Region 50 scores or higher (project performance scores 20 or higher), Conduct feasibility study for mutual-growth jobs (excluded if the mutual contract signed prior to Jan 1. 2023)
  • The date of completion of the investment shall not exceed 3 years from the date of the first report on the commencement of the construction
Implementation of Investment
  • Must implement investment until the investment completion date according to the business plan approved by the deliberation committee, after reporting the commencement of construction within 1 year from the notification of subsidy decision
Subsidy
Settlement
  • Within 3 months from the date of investment completion
    * The entire subsidy shall be returned if settlement is not made until more than 1 year has passed after the investment completion date
Follow-up management
  • Auxiliary projects will be implemented for 5 years since the date the investing company applies for settlement
    - Operating business, maintaining full-time workers as submitteed in the investment plan 사
  • (State fund grant limit) The total sub (criteria that determines the distributed amount) supported to a single project should not exceed KRW 10 billion, and the total amount of state funds supported to a single company should not exceed KRW 20 billion.
    * mutual-growh job company's project : KRW 15 billion (State funds)
  • The Seoul Metropolitan Over-concentration Control Area (Table 1 of the Enforcement Decree of the Seoul Metropolitan Area Readjustment Planning Act) : Effective on July 1, 2020
    1. ①The entire area of Seoul Metropolitan City and Incheon Metropolitan City [Ganghwa-gun, Ongjin-gun, Seo-gu, Daegok-dong, Dullo-dong, Majeon-dong, Geumgok-dong, Oryu-dong, Wanggil-dong, Dangha-dong, Wondang-dong, Incheon Free Economic Zone (including areas previously under the Free Economic Zone) and the Namdong National Industrial Complex are excluded.]
    2. ②Uijeongbu-si, Guri-si, Namyangju-si (Hopyeong-dong, Pyeongnae-dong, Geumgok-dong, Ilpae-dong Ipae-dong, Sampae-dong, Gaun-dong, Sudok-dong, Jejege-dong, and Donong-dong only) Hanam-si, Goyang-si, Seongnam-si, Anyang-si, Bucheon-si, Gwangmyeong-si, Gwacheon-si, Uiwang-si, Gunpo-si, Siheng-si [Banwol Special Area (including areas canceled from Banwol Special Area) is excluded]

Application Procedures for Local Investment Promotion Subsidy



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