If the capital goods are used in the business which is the subject to tax deduction and introduced as investment in kind, or the capital goods imported by cash within the rage of investment, customs duties are exempted regardless of the rate of foreign investment.

The duty for imported items is decided by the added trade price according to the price condition that actually made or will be made for sales items in order to export.
However, if there is no market price for investment in kind because it is specially produced, the customs duty calculation will not be applied under the Article 30 or 33 of the Customs Act. In this case, customs duty will be calculated under the Article 34 of the Customs Act, it adds i) raw material cost and other cost to be spent for assembling or manufacturing, ii) general profit and expenditure, occurred when the items are sold, iii) transportation and insurance fee to import port.
Therefore, if a foreign investor specially produced machinery for investment in kind, the price will be calculated based on estimated value. If the price can not be calculated by the estimated value, it can be calculated appropriate standard based on the Article 30 or 35 of the Customs Act under the Article 35 of the Customs Act. 

Following capital goods are needed to receive confirmation of the declaration of capital goods import

In order to receive confirmation of the declaration of capital goods import, documents to prove capital goods’ price, including three copies of application for import clearance of the goods with a quantity, standard, price and manufacturer of the items and offer sheet, are need to be submitted to a foreign exchange bank or KOTRA. 

Under the Article 121.3.1 of the Special Tax Treatment Act, capital goods, introduced by a foreign invested company from a foreign investor registered based on the Article 5.1 of the Foreign Investment Promotion Act, and capital goods introduced for investment in stock by a foreign investor, are can be exempted for duties.
Therefore, for the capital goods, except for investment in stock, customs duties can be exempted within the range of investment made from a foreign investor according to notification of FDI, and if the actual investment is less than the required amount to get approval for tax deduction, customs duties abated within the introduced investment. 

In order to receive tax deduction, the imported capital goods has to be used directly in the business sector which is eligible for tax exemption with regard to foreign investment through the acquisition of new stocks.
Therefore, foreign investment by means of long-term loan is not eligible for any benefits regarding duty exemption, but it is accepted as FDI. 

It is unreasonable that a foreign invested company that reserve investment as won tries to exchange won to foreign currency to make a payment even though it has foreign currency from loan or business activities in order to receive custom exemption, and it is impossible to examine the origin of money when invested fund and other fund are deposited and withdrew in the same account.
Therefore, even though a foreign invested company makes a payment by additional foreign capital, if the company secures initial investment invested from foreign investors and the payment is in the rage of investment from the foreign investors and it is declared within three years from the date of FDI notification under the Customs Act, it is reasonable to be exempted from duties.  

According to the Article 2.1.7 of the Foreign Investment Promotion Act, the standard of investment in stock can be not only Won but also foreign currency in order to calculate the customs exemption limit.
It will help to reduce the disadvantage occurred when the exchange rates are fluctuated and improve the foreign investment environment by easy payment and simple investment procedure.
Therefore, the customs exemption limit can be calculated with the currency that the foreign invested company chose among the foreign or domestic payment under the Article 121.3.1.1 of the Special Tax Treatment Control Act. 

No, not all capital goods imported by a foreign-invested company are eligible for duty exemption.
In order to receive duty exemption, it is necessary to be following capital goods used in the business that is eligible for corporate and income tax exemption and completed an import notification within three years from the date of notification by newly issued share.

* Capital goods introduced as a means of foreign payment or domestic payment from the foreign investors
* Capital goods invested to buy stocks by a foreign investor 

In order to receive customs exemption for capital goods, the business sector has to be verified the subject of tax deduction by the Ministry of Finance and Economy.

Therefore, capital goods, even if they are from a foreign investor, can not be exempted from duties if they are invested before receiving the approval for tax deduction from the Ministry of Finance and Economy. 

In order to be exempted from duties, capital goods have to be invested as a means of foreign or domestic payment or investment in stock under the Article 2.1.7 of the Foreign Investment Promotion Act.
Therefore, capital goods invested through the lease agreement can not be the subject to customs exemption.