Incentive of foreign investment

Location support

  • To attract foreign investment in foreign investment area, incentive is provided for businesses in the appointed area, and they are divided largely by complex-formed foreign investment area and individual-formed foreign investment area. Complex-formed foreign investment area means the area appointed for lease or ownership of a lot in advance with the purpose of attracting small-sized foreign investment business among national or general local industrial complex which is in fact managed for the purpose of leasing site. On the other hand, individual-formed foreign investment area is for attracting investment of large investors. It is formed with combination of location, time, and incentive preference of the investors to be appointed by the business unit.
  • comparison of complex-formed foreign investment area and individual-formed foreign investment area
comparison of complex-formed foreign investment area and individual-formed foreign investment area
Classification complex –formed Foreign investment area individual –formed Foreign investment area
Introduction Move in by appointing location in advance for small-sized foreign investment attraction (‘94~) Desiring area registration from large investors(‘97~)
location industrial complex no limitation (desired area)
Appointed (moving) requirement over 30% of foreign share investment amount of more than least amount by each business
(manufacturing industry, 30 million dollars Tour industry 20 million dollars, distribution industry, more than 10 million dollars)
Location support lease of location after land purchase Support land purchase payment (if requested) )
- 40% of capital area of government expenditure , 75% others - 40% of capital area of government expenditure , 75% others %
Benefit when appointed Tax reduction
  • requirement of reduction
    • - manufacturing industry : more than 10 million dollars
    • - distribution industry : more than 500 million dollars
  • eriod of reduction
    • - national tax 5 years(3 years 100%, 2 years 50%)
    • within 15 years of local tax
  • No additional requirement of reduction
    • - same as requirement of designation
  • period of reduction
    • - national tax 7 years (5 years 100%, 2 years 50%)
    • - within 15 years of local tax
Lease payment reduction ~100% reduction
(lease of land purchase by central and local government if needed)
100% reduction
(lease of land purchase by central and local government if needed))

※ Larger benefit of lease, reduction, and tax for individual-formed designation than complex-formed

  • Procedure of designation (Article 18 of act of foreigner investment promotion)
    • Procedure of designation (Article 18 of act of foreigner investment promotion) >① Attract negotiation(local government ↔ Foreign investor)>② decision of investment (Foreign investment business ↔ local government)>③ Establishment of development plan(review)(local government ↔ The Ministry of Land, Transport and Maritime Affairs, of over 330 thousand ㎡)>④Designation request of Foreign investment area(local government → department of knowledgeAnd economy )>⑤ review of designation validity of Foreign investment area(department of knowledge and economy )>⑥ deliberation of Foreign investment Practices committee(chairman : loan from department of knowledge and economy )> ⑦ approval of Foreign investment committee (chairman : Economy minister) > ⑧ announcement of designation(local government community)
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