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INVESTMENT INCENTIVES


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Tax Reductions Or Exemptions For Foreign-invested Companies

Basic Qualifications
Tax reductions or exemptions for foreign-invested companies – Basic Qualifications
Qualifications Period for tax reductionor exemption

A. Business accompanying high technology and industry-supporting service business
(foreign-invested companies that build factories and facilities)

7 years
(5 years : 100 %
2 years : 50 %)

B. Companies in an individual-type foreign investment zone (companies that build new factories and facilities)

Category Foreign Investment amount Number of employees, etc.
Manufacturing USD 30 million or more
(Maritime) Tourism and hotel business, Traditional Korean, hotel business Specialized /general recreation facilities, general resort facilities International convention facilities USD 20 million or more
Logistics (distribution) USD 10 million or more
Social infrastructure facilities USD 10 million or more
R&D USD 20 million or more Employment of over 10 people with a master’s degree or higher
Foreign-invested company with two employees or more USD 30 million or more
C. Companies in a complex-type foreign investment zone or a free trade zone Manufacturing USD 10 million or more 5 years
(3 years : 100 %,
2 years : 50 %)
Logistics (distribution) USD 5 million or more
Corporate tax / Income tax / Dividend tax
Tax reductions or exemptions for foreign-invested companies – Corporate tax / Income tax / Dividend tax
Tax reduction or exemption Period Application for tax reduction or exemption Remarks
A/B : 100 percent for five years and 50 percent for the next two years
C : 100 percent for three years and 50 percent for the next two years
* Regarding restrictions of corporate tax, confer Tax Reduction and Exemption Control Act
The earlier of the two following tax years

  • The first tax year when profit is made
  • The tax year in which the 5th anniversary of business opening occurs
By the end of the tax year, when the business opens (within two years after an additional investment report is submitted, in the event that an additional investment is made) Submitted to the Minister of Strategy and Finance Taxes on business profits can be reduced or exempted, according to the share of foreign investment
Acquisition tax / Property tax
Tax reductions or exemptions for foreign-invested companies – Acquisition tax / Property tax
Tax reduction or exemption Period Application for tax reduction or exemption Remarks
Reduction or exemption from 7 to 15 years starting from the business opening date Business opening date (acquisition date, if the acquisition is made before the business opening date) The exemption decision should be made before property is acquired
Customs duty on the import of capital goods / Import tax / Individual Consumption tax / Value added tax
Tax reductions or exemptions for foreign-invested companies – Customs duty on the import of capital goods / import tax / Individual Consumption tax / Value added tax
Tax reduction or exemption Period Application for tax reduction or exemption Remarks
A/B : Exempt from customs duties, special consumption tax, and value added tax
C : Exempt from customs duties only
An import report should be submitted to the Head of the Customs Office Imported goods should be directly used for the business exempt from taxes and reported to the authorities in less than Five years from the investment registration date

Procedure Of Application For Tax Reduction Or Exemption

Notification of foreign investment

Public/common property in foreign investment zones, national industrial complexes and general industrial complexes

Application for tax reduction or exemption
Advanced technology industry designation application

Due dates

  • New investment : By the closing date of the tax year in which the company starts its business
  • Capital increase : Within two years from the notification date of the capital increase
    (Need to apply for tax reductions every time a capital increase occurs)
  • Investment change : If the substance of the business for which tax reductions were granted has been changed, it should be done within two years from the date on which the reason for the change occurs (In this case, tax reductions apply only to the remaining period)

Submit an application to :

The Ministry of Strategy and Finance (+82-44-215-4531)

* Pre-Confirmation system of Tax Exemption/Reduction

  • This program helps foreign investors make investment decisions more easily by confirming in advance whether a business is eligible for advanced technology industry.
  • Even though a business is confirmed in advance, the business has to apply for designation separately after reporting its foreign investment.
Consultation with relevant departments

The competent minister holds consultation about whether the applying company is eligible for tax reductions (eligible if its business belongs to the advanced technology or industrial support service category)

Decision and notification
(within 20 days)

The Minister of Strategy and Finance decides whether to grant a tax exemption/reduction based on the results of consultations with related government departments.

Reduction Or Exemption Of Rent Fee For National And Public Properties

Online_reduction_info_table
Property subject National or public properties within foreign investment zones, national industrial complexes and industrial complexes
Rent period Rent period Rent contract can be signed within the range of 50 years (renewable every 10 years)
Qualifications Qualifications Corporates having more than 30% of total stock or total investment amount with voting rights of FICs
Reduction or exemption criteria and rates
Reduction or exemption of rent fee for national and public properties – Reduction or exemption criteria and rates
Category Complex-type Foreign Investment Zone
(Jangan l, Jangan ll, Dangdong, Oseong)
Rent Industrial Complex Exclusive for FICs
(Hyeongok, Eoyeon-Hansan, Chupal, Poseung)
Owned by the State
  • Business accompanying advanced technology & investment amount of USD 1 million or more
100%
  • Business accompanying high technology & investment amount of US$ 1 million or more
50%
  • Manufacturing business of USD 2.5 million or more & with regular workers more than 200
100%
  • Manufacturing business of USD 5 million or more
50%
  • Manufacturing business of USD 2.5 million or more & with regular workers more than 150
90%
  • Manufacturing business of USD 2.5 million or more & with regular workers more than 70
75%
  • Manufacturing business of USD 5 million or more
75%
Owned by Gyeonggi-do
  • Business accompanying advanced technology & investment amount of USD 1 million or more
100%
  • Business accompanying advanced technology & investment amount of USD 1 million or more
100%
  • Manufacturing business of USD 20 million or more
100%
  • Manufacturing business of USD 20 million or more
100%
  • Manufacturing business with 300 regular workers or more on average per day
100%
  • Manufacturing business with 300 regular workers or more on average per day
100%
  • Manufacturing business of USD 10 to 20 million
75%
  • Manufacturing business of USD 10 to 20 million
75%
  • Manufacturing business with 200~ 300 regular workers on average per day
75%
  • Manufacturing business with 200~ 300 regular workers on average per day
75%
  • Manufacturing business of USD 5 to 10 million
50%
  • Manufacturing business of USD 5 to 10 million
50%
  • Manufacturing business with 100~ 200 regular worker on average per day
50%
  • Manufacturing business with 100~200 regular worker on average per day
50%
Online_reduction_info_table2
Application for reduction or exemption Qualified companies should submit an application for rent reduction or exemption to the head of the local government

Contact Us

Investment Promotion Division of
Gyeonggi-do Provincial Government

  • Websiteinvest.gg.go.kr
  • FaxInvestment Environment Team +82-31-8008-2768
    America & China Team +82-31-8008-2719
    Japan & Europe Team +82-31-8008-2186
    Service Industry Promotion Team +82-31-8008-2181
  • E-mailinvest@gg.go.kr
  • SNSGyeonggi-do Investment Promotion Facebook
  •  facebook.com/investgg
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