Foreign Investment Incentives

Incentives for Foreign Investment Companies Tax reduction for foreign investment companies (Articles 121-2 and 121-3 of the Restriction of Special Taxation Act)

Types Eligibility Requirements Support Details
Customs Duties Local Taxes
Provincial Tax (Acquisition Tax) City/County Tax (Property Tax)

Investment Companies in New Growth Engine Industries

(Article 116-2(2) of the Enforcement Decree of the Restriction of Special Taxation Act)

For Foreign Investments(Article 2(1)4 of the Foreign Investment Promotion Act)

Industries of New Growth Engine Projects(Schedule 7 of the Enforcement Decree of the Restriction of Special Taxation Act)

Investment Amount: Over 2 million USD(Article 51(1) of the Enforcement Rules of the Restriction of Special Taxation Act)

Investment Capital Goods Duty-free, individual consumption tax-free, and VAT-free for capital goods imported within 5 years

Foreign Investment Companies

100% exemption on acquisition tax for real estate used for business purposes for 15 years The amount of acquisition tax exemption = Calculated tax amount x Foreign investment ratio

According to the ordinances of each city/county, e.g., Changwon City

Foreign Investment Companies

100% exemption on property tax for real estate used for business purposes for the first 10 years 50% exemption on property tax for real estate used for business purposes for the next 5 years The amount of property tax exemption = Calculated tax amount x Foreign investment ratio

Investment Companies in Development-Type Foreign Investment Zones

(Article 116-2(3) of the Enforcement Decree of the Restriction of Special Taxation Act

When Applicable to Foreign Investment (Article 2, Paragraph 1, Subparagraph 4 of the Foreign Investment Promotion Act)

Manufacturing and others: 30 million USD or more

Tourism and others: 20 million USD or more

Logistics and others: 10 million USD or more

R&D and others: 2 million USD or more (Article 25, Paragraph 1 of the Enforcement Decree of the Foreign Investment Promotion Act)

Investment Companies in Complex-Type Foreign Investment Zones

(Article 121-2(1)2-5 of the Restriction of Special Taxation Act)

Businesses Operated by Foreign Investment Companies in Foreign Investment Zones

Manufacturing: Over 10 million USD

Logistics, etc.: Over 5 million USD (Article 116-2(16) of the Enforcement Decree of the Restriction of Special Taxation Act)

Investment Capital Goods Duty-free for capital goods imported within 5 years

Investment Companies in Free Economic Zones

(Article 121-2(22)2 of the Restriction of Special Taxation Act)

Foreign Investments in Free Economic Zones

Manufacturing and Tourism, etc.: Over 10 million USD

Logistics and Medical Institutions, etc.: Over 5 million USD

R&D, etc.: Over 1 million USD (Article 116-2(5) of the Enforcement Decree of the Restriction of Special Taxation Act)

Investment Companies in Free Trade Zones

(Article 116-2(9) of the Enforcement Decree of the Restriction of Special Taxation Act))

Manufacturing : Over 10 million USD

Logistics : Over 5 million USD(Article 116-2, Paragraph 9 of the Enforcement Decree of the Restriction of Special Taxation Act)

Deferred Customs Duties (Non-Tariff Area)

Rent Reduction for Foreign Investment Companies (Article 19 of the Enforcement Decree of the Foreign Investment Promotion Act)

Types Eligibility Requirements Support Details
Reduction Rate Lease Period and Rent

Individual-Type Foreign Investment Zones

 - 100%

Lease Period : Unlimited (10-year contract)

Rent : 1% of land price (Higher of official land price or development cost applied)

Component Material Complex

More than 5 million USD

Complex-Type Foreign Investment Zones

New Growth Engine Industry (Enforcement Decree of the Restriction of Special Taxation Act [Appendix 7]) & 1 million USD

Manufacturing: 2.5 million USD & more than 200 full-time employees

Manufacturing: 2.5 million USD & 150 ~ 200 full-time employees

 90%

Manufacturing: 2.5 million USD & 70 ~ 150 full-time employees

 75%

Manufacturing: 5 million USD

Income Tax Reduction for Foreign Workers

Tax Support for Highly Skilled Foreigners (Articles 18 and 18-2 of the Restriction of Special Taxation Act) Income Tax

Income Tax Reduction for Foreign Engineers

Technical Providers under Engineering Technology Introduction Contracts

R&D Center Researchers

 50% Reduction for 10 Years

Special Taxation for Foreign Workers

Foreign Workers

 Choose between Comprehensive Income Tax Rate or Flat Rate (19%)

  • Cash Support System

Support Limit and Method
Support Limit and Method

Within 30% of the total amount of foreign investment (excluding long-term loans)

Up to 40% for high-tech industries, up to 50% for national strategic technologies, and national high-tech strategic technologies Investments in converting to new industries (replacing existing factory facilities with new industry facilities) are also recognized as investments One-time payment within 1 year or in 10 installments over 5 years after the cash support decision
Support Items

Land/building purchase or rent, construction costs, capital goods, infrastructure installation costs, employment subsidies, and training subsidies
Types Eligibility Requirements Support Details
Support Eligibility Companies in the National Strategic Technology Field

Restriction of Special Taxation Act, Article 10(1)2 - 6 fields

Semiconductors, Secondary Batteries, Vaccines, Displays, Hydrogen, Future Mobility
Companies in the Advanced Strategic Technology Field

Special Measures Act for Strengthening and Protecting the Competitiveness of National Advanced Strategic Industries, Article 11 - 4 fields

Semiconductors, Displays, Secondary Batteries, Bio
Companies with New Growth Engine Technologies

Restriction of Special Taxation Act, Article 12-2 - 13 fields * 260 technologies

13 fields: Future Automobiles, Intelligent Information, Next-Generation SW/Security, Content, Next-Generation Electronic Information Devices, Next-Generation Broadcasting Communications, Biohealth, New Energy Industries/Environmental Convergence Materials, Robots, Aerospace, Advanced Materials/Components/Equipment, Carbon Neutrality
Companies in Advanced Technologies and Advanced Products Management

Notice No. 2022-36 by the Ministry of Trade, Industry, and Energy, [Appendix 1] 35 Fields * 3,043 Technologies

35 fields: Carbon/Nano Convergence, Textile/Apparel, Chemical Process Materials, Ceramics, Bio, Metal Materials, Production Base, Semiconductors, LED/Optical Applications, Displays, Networks, Mobile Communications, Broadcasting, Radio Waves/Satellites, Information Home Appliances, Smart Services, Information Security, Medical Devices, Secondary Batteries, Production Systems, Robots, Automobiles, Shipbuilding/Marine, Aerospace, Drones, Energy Resources, Nuclear Power, Renewable Energy, Power, Basic SW Computing, Convergence SW, Embedded SW, Knowledge Services, Plant Engineering, Clean Base
Companies in the Materials/Components Industry

Enforcement Rules for Special Measures Act for Strengthening the Competitiveness of the Materials/Components/Equipment Industry (Schedule 1) - 15 sectors

Textiles, Pulp, Chemicals, Pharmaceuticals, Rubber and Plastics, Non-Metallic Minerals, Primary Metals, Metal Processing, Electronics and Computers, Medical/Precision, Optical Instruments, Electrical Equipment, Machinery and Equipment Automobiles and Trailers, Transport Equipment, Publishing Industry
Large-Scale Job Creation

300 or more employees: Manufacturing, Construction, Transportation, Information Services

200 or more employees: Wholesale/Retail, Accommodation, Finance/Insurance, Professional/Scientific/Technical, Leisure Services
Research and Development (R&D) Centers

Hiring of 5 or more researchers and establishment/expansion of research facilities

*Master's degree or higher in New Growth Engine fields or Bachelor's degree with 3 or more years of experience
Regional Headquarters of Global Companies

Establishment of 2 or more bases in Korea (satisfying all conditions below)

Overseas parent company's revenue of 3 trillion KRW or more (average of the last 5 years) Foreign investment share of 50% or more Employment of 10 or more full-time employees per key function (production, sales, logistics, HR)
Others

If it pertains to regional specialized industries and metropolitan cooperation projects necessary for creating local jobs and enhancing competitiveness, and its contribution to regional economic development is recognized