The free trade zones are based on the Act on Designation of Free Trade Zones with the purpose to designate zones nearby harbors and airports as well as industrial complexes for attracting foreign direct investment, promote trade and develop the surrounding area. Presently, eight zones are designated as free trade zones, and they are located in Masan, Iksan, Gunsan, Daebul, Incheon harbor, Busan harbor, Gwangyang harbor, and Incheon airport. The businesses eligible to move into the free trade zones are manufacturing companies, logistics, trade and supporting service companies:
– Logistics companies in the sectors of storage, freight, transportation, packaging,
exhibition, sales;
– Wholesale companies with the main purpose of import and export trade;
– Supporting service companies in the sectors of finance, customs clearance, information
management, and welfare of workers.
The lender of the site is the government and it is possible to receive various benefits such as reduction of rent and withholding of customs as well as one-stop service for administrative support. For the manufacturing sector with an investment of more than US$10 million, and for the logistics sector with an investment of more than US$5 million, tax reductions are given for corporate and income tax (100% reduction for five years, and 50% for two years), as well as for local tax (100% for three years and 50% for two years).
