A Free Trade Zone (hereafter FTZ) is a zone for free manufacturing, logistics and distribution receiving benefits and incentives pursuant to relevant laws such as the Customs Act, and Foreign Trade Act. An FTZ is an area as defined in the Act on the Designation of Free Trade Zones. It is a new version of integrating the existing “Free Trade Zone”, which was focused on the manufacturing sector and the “Customs Free Zone”, focused on logistics.
The FTZs enjoy free customs clearance and exemption from customs and taxes. Furthermore, the carrying in and out of freight as well as simple manufacturing processes can be freely undertaken.
The foreign-invested companies in the FTZ, which are in the high-technology, industry-supporting sector, manufacturing companies with an investment of more than U$10 million, as well as companies in logistics with foreign investment of more than U$5 million, enjoy extensive tax benefits, cheap leases and other incentives when moving into the area.
The FTZs eligible for the benefits are the ones in Masan, Gunsan, Iksan, Daebul, Busan harbor, Gwangyang harbor, and parts of the Incheon harbor.