1. Foreign Investment Protection
Foreigners are not subject to investment restriction in Korea except for special cases specified by the Acts and subordinate statutes. The Foreign Investment Promotion Act expressly stipulates the guarantee for out bound remittance, national treatment, and exclusion of differential application of tax reduction and exemption for foreign investment.
Business categories open to foreign investment
Among the 1,145 business categories under the Korea Standard Industry Code (KSIC) (Korea Statistical Office Notice No. 2008-35), 1,083 are open to foreign investment, with the exclusion of the 62 related to public administration, foreign affairs, national defense, etc. according to Article 4 of the ?Foreign Investment Promotion Act.
- Number of the business categories open to foreign investment (as of February 29, 2008):
- Fully open categories: 1,054
- Partially open categories: 26 (Foreign investment allowed when satisfying permission conditions)
- Closed categories: 3 (Nuclear power generation, radio broadcasting, and over-the-air
broadcasting)
Protection of foreign investment
- From the perspective of foreign investors, overseas investment has several risks. In addition
to the usual risks that accompany investment, foreign investors must consider risks related to local
political and economic conditions of the investment target country. Against this backdrop, the Korean
government has a system in place to protect foreign investors as follows:
Guarantee of remittance to foreign countries
- With respect to (1) the proceeds that come from stocks acquired by a foreign investor, (2)
proceeds from the sale of stocks, (3) the principal, interest and service charges paid in accordance
with the contract for such a loan as prescribed by the Foreign Investment Promotion Act, and (4)
compensation paid in accordance with a contract for the introduction of technology, such remittance
to foreign countries shall be guaranteed in accordance with the contents of the permission or report of
the contract for foreign investment or for the introduction of technology, as of the time for the said
remittance (Article 3.(1) of the Foreign Investment Promotion Act).
- According to Article 6.(1) of the Foreign Exchange Transactions Act, the Minister of Strategy
- Where a foreign investor, a person who receives a loan, or a person who introduces technology by means of a contract for the introduction of technology intends to remit funds to a foreign country, he shall obtain confirmation of the remittance from the head of a foreign exchange bank as prescribed in the Foreign Exchange Transactions Act(Article 4 of the Enforcement Decree of the Foreign Investment Promotion Act).
National Treatment
- Except as otherwise prescribed by the Acts of the Republic of Korea, foreign investors and
foreign-capital invested companies shall be treated in the same way as nationals of the Republic of
Korea and Korean corporations are treated in business operation (Article 3.(2) of the Foreign
Investment Promotion Act).
Exclusion of differential application of tax reduction and exemption for foreign investment
- Except as otherwise prescribed by the Acts of the Republic of Korea, provisions concerning
the abatement or exemption of taxes among the tax laws applying to nationals of the Republic of Korea or Korean corporations shall also apply to foreign investors, foreign-capital invested companies, and persons who have extended loans or provided technology in accordance with the Foreign Investment Promotion Act(Article 3.(3) of the Foreign Investment Promotion Act).
2. Investment Restriction
Foreigners are not subject to investment restriction in Korea except for special cases specified by the Acts and subordinate statutes. The Regulations on Foreign Investment and Technology Introduction stipulates business categories where foreign investment is restricted and the content of such restriction.
Reasons for restriction
- In principle, foreigners are not restricted in carrying out foreign investment in Korea except
1. Where it threatens the maintenance of national security and public order;
2. Where it has harmful effects on public hygiene or the environmental preservation of the Republic of Korea or is against Korean morals and customs; and
3. Where it violates the Acts and subordinate statutes of the Republic of Korea.
Main content of the restriction
Regarding the categories of business in which foreign investment is restricted and the contents of the restriction, according to public notice given by the Minister of Knowledge Economy after consultation with the competent Minister, in view of the scope of the reserved contents concerning domestic direct investment by a non-resident regarding direct investment of Annex No. 1 (Reservations to the Code of Liberalization of Capital Movements) to the agreed invitation to join the Convention on the Organization for Economic Cooperation and Development for the Republic of Korea and of the reserved contents provided in the Annex to the Convention on the Organization for Economic Cooperation and Development concerning bilateral or multilateral investments, currently, foreign investment is not permitted in 62 business categories; and is only partially permitted in 26 other categories such as by limiting investment ratio; and the remaining three are not open [4.(3) of the Foreign Investment Promotion Act, 5.(1) of the Enforcement Decree of the same Act, Articles 4 and 5 of the Regulations on Foreign Investment and Technology Introduction (Ministry of Knowledge Economy Notice No. 2010-63)].
Business categories where foreign investment is not permitted
- The business categories which do not permit foreign investment are those of a public nature
where it is inappropriate to apply the Foreign Investment Promotion Act. They are indicated in the following table [attached Table 1 of Regulations on Foreign Investment and Technology Introduction?(Ministry of Knowledge Economy Notice No. 2010-63)]:
*Regarding correctional institutions, foreign investment is possible in privately operated correctional institutions according to the ?Act on the Establishment and Operation of Private-Operated Correctional Institutions, Etc.?which went into effect in July, 2001.
Business categories restricting foreign investment and standards for permission
- Business categories where foreign investment is restricted are indicated in the following
table. When investing in one of the categories by meeting its conditions, such investment can be made
only within the scope specified under those conditions [attached Table 2 of Regulations on Foreign Investment and Technology Introduction (Ministry of Knowledge Economy Notice No. 2010-63)]
Content of restriction on foreign investment
- Even when the business category of a company in which a foreigner makes an investment
is restricted, the foreign investor may still make an investment without restriction if the company’s
ratio of the turnover of the restricted category is not more than 1/100 of the total turnover (Article
5.(2) of the Enforcement Decree of the Foreign Investment Promotion Act).
- Where the ratio of the turnover of a restricted category of business of a company has
come to exceed 1/100 of the total turnover of the company after a foreigner acquired stocks or stakes
of the company, the stocks or stakes acquired in excess of the ratio of investment permissible to
foreigners shall be transferred to a Korean citizen or a Korean corporation within 6 months from the
date fixed for the settlement of accounts of the business year when such ratio is exceeded: If there
exists any inevitable reason, the period of transfer may be extended within the maximum limit of 6
months (Article 5.(3) of the Enforcement Decree of the Foreign Investment Promotion Act).
- A foreigner shall be prohibited from making an investment in any company running concurrently both a category of business in which foreign investment is not permitted and a category of business in which foreign investment is only partially permitted. Furthermore, where intending to make an investment in any company with at least two categories of business in which foreign investment is only partially permitted, such investor shall be prohibited from making an investment in the company in excess of the ratio of foreign investment in the category of business in which the ratio of investment permissible to foreigners is the lowest (Article 5.(4) of the Enforcement Decree of the Foreign Investment Promotion Act).
Notification of restrictions
The Minister of Knowledge Economy shall, where other Acts and subordinate statutes or public notifications (other than the Foreign Investment Promotion Act) restrict foreign investment (such as treating foreigners or foreign-capital invested companies unfavorably compared to Korean nationals or Korean corporations, or charging additional liabilities to foreigners or foreigncapital invested companies), provide public notice of such restrictions every year (Article 4.(4) of the Foreign Investment Promotion Act).
The Minister of Knowledge Economy shall, where there exist any alterations in or any new additions to contents concerning the restrictions on foreign investments which have been publicly announced in the preceding year, prepare a statement of such restrictions and provide notice of them by the end of February each year (Article 5.(5) of the Enforcement Decree of the Foreign Investment Promotion Act).
3. Foreign investment areas
The main Acts related to foreign investment include the Foreign Investment Promotion Act , Foreign Exchange Transactions Act, Commercial Act, Foreigner's Land Acquisition Act , Industrial Cluster Development and Factory Establishment Act, Restriction of Special Taxation Act, Act on the Capital Market and Financial Investment Business, Monopoly Regulation and Fair Trade Act, and others.
Key content related to the Foreign Investment Promotion Act
Types of foreign investments
- The Foreign Investment Promotion Act?defines the methods of investment in Korea available to foreigners as (1) purchasing stocks, etc., (2) extending a long-term loan, OR (3) contributing to a non-profit corporation (Article 2.(1).4 of the Foreign Investment Promotion Act).
Tax abatement and exemption for foreign investments
- For foreign investments, national and regional taxes may be abated or exempted under certain conditions as prescribed by the Restriction of Special Taxation Act (Article 9 of the Foreign Investment Promotion Act).
Lease and sale of State and public properties
- State and public properties may be leased (lease period of up to 50 years) or sold to foreigncapital invested companies through free contracts. If a foreign-capital invested company which wishes
to purchase a State or public property is acknowledged to have difficulty in making a lump-sum payment of the purchase price, the payment may be deferred or made in installments. The Minister of Strategy and Finance, administrative agencies in charge of managing State properties, and the heads of local governments may reduce or exempt the rentals of the leased State and public properties (Article 13 of the Foreign Investment Promotion Act).
Support in cash for foreign investments
- For foreign investments that satisfy certain conditions, the State and local governments may
furnish funds required for certain uses, including the construction of new factories (Article 14-2 of the
Foreign Investment Promotion Act).
Civil petition processing procedures
- Civil petitions to be handled in bulk, civil petitions to be directly handled, vicarious
drafting and submitting of civil petition applications by the Investment Support Center, automatic
processing, and other services have been introduced to assist foreign investors or foreign-capital
invested companies engaging in business in Korea (Article 17 of the Foreign Investment Promotion Act).
Matters to report and register
- If a foreigner intends to make an investment, he shall make a report thereof in advance.
Such investor shall also report a transfer of an acquired stake, etc. or disposal of capital goods and
register as a foreign-capital invested company when such investment is completed (Articles 5 to 8, 8-2,
21 to 23, and 25 of the Foreign Investment Promotion Act).
Key content related to the Foreign Exchange Transactions Act
Suspension, etc. of foreign exchange transactions
- The Minister of Strategy and Finance may take measures, such as temporary suspension of
foreign exchange transactions OR imposition of an obligation to safekeep, deposit or sell means of
payment, etc. in or to the Bank of Korea, government agencies, the Foreign Exchange Equalization
Fund, or financial institutions under certain conditions. Nevertheless, foreign exchange transactions,
etc. shall be guaranteed for foreign investment (Article 6 of the Foreign Exchange Transactions
Act).
Registration, etc. for foreign exchange businesses
- Only financial institutions may engage in foreign exchange businesses, and any person who
intends to run foreign exchange businesses shall prepare capital, facilities, and professional human
resources sufficient to conduct such businesses and register such businesses with the Minister of
Strategy and Finance (Article 8 of the Foreign Exchange Transactions Act).
Brokerage of foreign exchange, etc.
- Any person who intends to run the brokerage business of purchasing and selling, interchanging, and lending of foreign exchange, that of financial derivatives transactions, or businesses related thereto shall prepare capital, facilities, and professional human resources sufficient to conduct such brokerage business and obtain the authorization of the Minister of Strategy and Finance (Article 9 of the Foreign Exchange Transactions Act).
Permission of payment, etc.
- The Minister of Strategy and Finance may require residents and non-residents who intend to make any payment from the Republic of Korea to a foreign country, or residents who intend to make any payment to non-residents or to take any receipt from non-residents to obtain permission in making such payment, etc. (Article 15.(1) of the Foreign Exchange Transactions Act).
Report of method of payment, etc.
- Under certain circumstances in settling any claim and debt caused by transactions or acts
between a resident and a non-resident or between non-residents, an advance report shall be made about the method of payment, etc. for such settlement to the Minister of Strategy and Economy. This shall not apply to ordinary transactions (Article 16 of the Foreign Exchange Transactions Act).
Report and permission of capital transactions
- A person who intends to perform capital transactions shall report such capital transactions
to the Minister of Strategy and Finance. A person who intends to perform specifically-designated capital transactions shall obtain the permission of the Minister of Strategy and Finance. Negligible or standardized capital transactions may be exempted from permission and report (Article 18 of the Foreign Exchange Transactions Act).
Key content related to incorporation procedures in the Commercial Act
Partnership company and limited partnership company
- In order to incorporate a partnership company or limited partnership company, articles of
incorporation shall be executed jointly by at least two members of the company (Articles 178 & 269
of the Commercial Act) and the registration of incorporation shall be made (Articles 180 & 269
of the Commercial Act).
Stock company
- The methods of incorporation of a stock company are promotion of incorporation and subscriptive incorporation (Articles 295 and 301 of the Commercial Act).
- Promotion of incorporation procedures
- The procedures for promotion of incorporation of a stock company can be summarized as
- Subscriptive incorporation procedures
- The procedures of subscriptive incorporation of a stock company can be summarized as preparation of the articles of incorporation by promoters (Article 288 of the Commercial Act); issuance of shares and subscription of shares by promoters (Article 293 of the Commercial Act); offering of shares and subscription (Articles 301 & 302 of the Commercial Act); payment of the subscription price (Article 305 of the Commercial Act); holding of an inaugural general meeting (Article 308 of the Commercial Act); election of officers (Article 312 of the Commercial Act ); and investigation and reporting by the directors and auditors (Article 313 of the Commercial Act).
Limited liability company
- The procedures of incorporation of a limited liability company can be summarized as preparation of the articles of incorporation (Article 543.(1) of the Commercial Act); payment for contribution (Article 548.(1) of the Commercial Act); appointment of directors (Article 547 of the Commercial Act); and registration of incorporation (Article 549 of the Commercial Act).
Key content related to the Foreigner’s Land Acquisition Act
Report of land acquisition by contract
- If a foreigner, foreign government, etc. concludes a contract for the land acquisition within
the territory of the Republic of Korea, it shall report the conclusion of the contract to the head of the
respective Si (city)/Gun (county)/Gu (district) within 60 days, except when making a real estate transaction report under the Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act or making a house transaction report under the Housing Act (Article 4.(1) of the Foreigner's Land Acquisition Act).
Report of land acquisition caused by reasons other than contract
- If a foreigner acquires land within the territory of the Republic of Korea by means of
inheritance, auction, exercise of the right to repurchase pursuant to the Act on the Acquisition of
Land, Etc. for Public Works and the Compensation Therefor and other related laws, irrevocable
judgments by courts, etc., he shall report it to the head of Si/Gun/Gu within six months of his land
acquisition (Article 5 of the Foreigner’s Land Acquisition Act).
Land acquisition that requires permission
- When acquiring land located in military installation protection areas or other specially
designated areas, a foreigner shall obtain permission from the head of Si/Gun/Gu prior to the
conclusion of the contract except when he/she has received permission for the said land transaction
contract under the National Land Planning and Utilization Act (Article 4.(2) of the Foreigner’s Land Acquisition Act).
Report of continuous holding of land
- If a national of the Republic of Korea, or a juristic person or organization established in
accordance with the Acts and subordinate statutes of the Republic of Korea, which has land within the
territory of the Republic of Korea, changes nationality and then desires to keep the land, such person
or organization shall report to the head of Si/Gun/Gu within 6 months after the change of nationality
(Article 6 of the Foreigner’s Land Acquisition Act).
Key content related to the Industrial Cluster Development and Factory Establishment Act
Setup of center for supporting factory establishment
- A center for supporting factory establishment is in place at the Korea Industrial Complex
Corporation to render consulting services to assist with factory site selection, handle affairs involving
factory establishment (including application for permission to build a factory and other relevant
affairs; hereinafter the same shall apply) or act as an agent in handling such affairs, and to perform
tasks in support of factory establishment. A person who intends to establish a factory may request the
head of the center for supporting factory establishment to perform vicariously the business of
establishing a factory such as preparation and submission of documents (Article 7-2 of the
Industrial Cluster Development and Factory Establishment Act).
Ombudsman office for factory establishment
- An ombudsman office is in place at the Korea Industrial Complex Corporation to receive,
check and deal with corporate difficulties or recommendations involving factory establishment, devise
ways to relax or streamline administrative regulations on factory establishment, work out ways to
improve the system by which factories are established, and propose the implementation of such ways
by the administrative agencies concerned (Article 7-3 of the Industrial Cluster Development and
Factory Establishment Act).
Approval for establishment, etc. of factory
- A person, who intends to build, enlarge or to alter the business type of a factory on the area of not less than five hundred square meters, shall obtain the approval of the head of Si/Gun/Gu
concerned. The same shall apply where he intends to alter previously approved matters (Article 13.(1)
of the Industrial Cluster Development and Factory Establishment Act). A person, who intends to be granted the legal fiction of a permission, report, licence, approval, cancellation or disuse even if his factory construction area falls short of five hundred square meters, may obtain approval for the establishment, etc. of a factory (Article 13-3 of the Industrial Cluster Development and Factory Establishment Act).
Legal fiction of authorization and permission, etc.
- In giving approval for the establishment, etc. of a factory, a permission, report, license,
approval, cancellation or disuse in relation to the relevant factory and access road sites, about which
the head of Si/Gun/Gu concerned has consulted with the heads of administrative agencies concerned, shall be deemed to have already been authorized and permitted (Article 13-2.(1) of the Industrial Cluster Development and Factory Establishment Act).
Special cases for the approval of establishment, etc. of factory
- In cases where it is inevitable to link non-roadways (meaning the roads prescribed in Article 2.(1).1 of the Road Act and semi-roads prescribed in Article 7 of the same Act) to a factory access road to lay a factory access road, the head of Si/Gun/Gu shall permit opening private roads (Article 13-3.(1) of the Industrial Cluster Development and Factory Establishment Act).
- A person, who has obtained the approval for the establishment, etc. of his factory in an area
- In cases where the head of Si/Gun/Gu revokes approval for a business plan or permission to
construct a factory under the provisions of Article 37 of the Support for Small and Medium Enterprise Establishment Act against a person who has obtained the approval for his business plan under the provisions of Article 33 of the same Act, the Si/Gun/Gu head may not have to order the land to be restored to the original state and may give approval for the establishment, etc. of a factory on the
same land to the relevant founder or a third person (Article 13-3.(3) of the Industrial Cluster Development and Factory Establishment Act).
Revocation of approval for establishment, etc. of factory
- The head of Si/Gun/Gu may revoke the approval for the establishment, etc. of the factory
concerned and order the restoration of the land in question to its original state, where it is recognized
that the person who has received approval for the establishment, etc. of the factory has difficulties in
carrying on the business (Article 13-5 of the Industrial Cluster Development and Factory Establishment Act).
Permission to construct factory
- In giving permission for the construction of a factory under the provisions of Article 11 of
the Building Act and receiving a report under the provisions of Article 14 of the same Act to and from a person who has obtained permission for the establishment, etc. of a factory (including a person who is deemed to have obtained permission to establish a factory under Article 13.(2) of the Industrial Cluster Development and Factory Establishment Act), permission, authorization, approval, agreement or report, in which the head of Si/Gun/Gu has consulted with the heads of administrative agencies concerned according to Article 13.(3) of the Industrial Cluster Development and Factory Establishment Act, shall be deemed to have been obtained (Article 14.(1) of the Industrial Cluster Development and Factory Establishment Act).
Approval for the use of factory structures
- In giving approval for the use of structures as prescribed in Article 22.(1) of the Building
Act to a person who were deemed to have received permission to construct a factory or made a
report on the construction when the establishment, etc. of a factory was approved AND a person who
has obtained permission for the construction or made a report, inspection, report, agreement and
request, about which the head of Si/Gun/Gu has consulted with the heads of administrative agencies
concerned, shall be deemed to have been obtained (Article 14-2.(1) of the Industrial Cluster
Development and Factory Establishment Act).
Report on the completion of establishment, etc. of a factory
- If a person who obtains approval for the establishment, etc. of a factory completes the
construction of the factory, he shall report such completion to the head of Si/Gun/Gu within two
months of the date when he obtains approval for the use of the final structure and completes
installation of machinery and equipment. If a person who obtains approval for the installation of
manufacturing facilities completes the installation of manufacturing facilities, he shall report such
completion to the head of Si/Gun/Gu within two months of the date when he completes such
installation. Where an enterprise is located within the industrial complex, such report shall be made to
its management organization (Article 15 of the Industrial Cluster Development and Factory
Establishment Act)
4. Various support areas
The main Acts related to various support for foreign investment include the Restriction of Special Taxation Act for tax support; Foreign Investment Promotion Act, Act on Designation and Management of Free Economic Zones, Spesial Act on Designation and Management of Free Trade Zones, Special Act on the Establishment of the Jeju Special Self-Governing Province & the Development of Free International Citiesfor location support; and the Foreign Investment Promotion Act for cash support, support for leases, etc. of State and public properties, and administrative support.
Key content related to foreign investment in the Restriction of Special Taxation Act
Reduction or exemption from corporate tax, income tax, acquisition tax, registration tax, property tax, etc.
- A foreigner’s investment to carry on a business shall be eligible for the reduction of or
exemption from corporate tax, etc. To be eligible for the tax reduction or exemption, he shall make an
application for tax reduction or exemption to the Minister of Strategy and Finance (Article 121-2 of
the Restriction of Special Taxation Act).
Exemption from customs duties, special consumption tax, value-added tax, etc.
- If capital goods (which are directly used in a business for which corporate tax, etc. are
reduced or exempted according to Article 121-2 of the Restriction of Special Taxation Act and for which an import declaration has been completed according to the Customs Act within three years of the date when a report was made according to Article 5 of the Foreign Investment Promotion Act) which are provided to a foreign-capital invested business fall under certain conditions, they may be exempted from customs duties, etc. To be eligible for exemption from customs duties, etc., an application for tax exemption shall be made to the head of a customhouse (Article 121-3 of the Restriction of Special Taxation Act).
Tax reduction or exemption for capital increase
- If a foreign-capital invested company increases its capital, tax reduction or exemption may
be applied to the portion of relevant capital increase (Article 121-4 of the Restriction of Special
Taxation Act).
Payment and additional collection of reduced or exempted tax amount
- A foreign investor or a foreign-capital invested company that falls under certain conditions
shall pay the reduced or exempted tax or be charged the reduced or exempted amount (Article 121-5
of the Restriction of Special Taxation Act).
Key content related to location support in the Foreign Investment Promotion Act
Designation and development of foreign investment zones
- City (Si) mayors and province (Do) governors may designate or cancel the designation of
foreign investment zones after going through deliberation thereon by the Foreign Investment Committee (Articles 18 and 18-2 of the Foreign Investment Promotion Act).
Support measures for foreign investment zones
- With respect to responsibility for the costs of the development of a foreign investment zone
- Foreign-capital invested companies moving into any foreign investment zone may build, expand, or transfer a factory covering a factory construction area of 500m2 or more (including a knowledge industry center) or change their business type in any growth administration zone despite the main sentence of Article 20.(1) of the Industrial Cluster Development and Factory Establishment Act (Article 20.(4) of the Foreign Investment Promotion Act).
Key content related to location support in the Special Act on Designation and Management of Free Economic Zones
Special cases for building-to-land ratio
- Free economic zones are to be designated by the Minister of Knowledge Economy at the
request of Si mayors and Do governors. The special metropolitan cities and metropolitan cities having
jurisdiction over free economic zones or Sis/Guns located within free economic zones may make
separate provisions through the municipal ordinances for the maximum limits on the building volume
ratio or building-to-land ratio within the free economic zones where deemed necessary for
development projects (Article 9-2 of the Special Act on Designation and Management of Free
Economic Zones).
Reduction and exemption of taxes and charges
- The State and local governments may, in the event that it is required to smoothly carrying
out the development project of a free economic zone, grant an undertaker of the development project
the reduction and exemption of taxes such as corporate tax, income tax, customs tax, acquisition tax,
registration tax, and property tax. The undertaker may receive a reduction in or be exempted from the
development charges, farmland preservation charges, substitute grassland creation charges, substitute
forest resources creation charges, traffic congestion charges, the cooperative fund for the conservation
of the ecosystem, the occupation or use fees of public waters, environment improvement charges,
installation costs of infrastructure, and charges for metropolitan traffic facilities (Article 15 of the
Special Act on Designation and Management of Free Economic Zones).
Key content related to location support in the Act on Designation and Management of Free Trade Zones
Legal fiction of approval for new factory construction, etc.
- The Minister of Knowledge Economy may designate free trade zones at the request of the heads of central administrative organization, special metropolitan city mayors, metropolitan city mayors, province governors or the mayor of the Jeju Special Self-Governing Province. In the event that a person who intends to move in a free trade zone obtains a move-in permit under Article 11.(1) of the Act on Designation and Management of Free Trade Zones, that person shall be deemed to have obtained approval for newly constructing and expanding his factory or changing the type of business under Article 13 of the Industrial Cluster Development and Factory Establishment Act, and approval for newly constructing, expanding or relocating the factory or approval for changing the type of business under Article 20 of the same Act (Article 14 of the Act on Designation and Management of Free Trade Zones).
Lease or sale of State and public-owned land, factories, etc.
- The administrative authority or head of the local government may lease or sell State or
public-owned land, factories, etc. in a free trade zone (or a site scheduled to become a free trade zone)
to a resident company, etc. In such case, the lease period may be up to 50 years for resident companies
and up to 10 years for support companies (Articles 17 and 18 of the Act on Designation and Management of Free Trade Zones).
Deferred payment and installment payment of purchase price of land, factory, etc.
- In the event that any State or public-owned land, factory, etc., which is located in a free
trade zone, is sold, and the purchaser thereof is recognized to have difficulty in paying the price
therefor in a lump sum, the administrative authority or head of the local government may extend the
payment settlement date or allow the purchaser to pay the price in installments (Article 19 of the
Act on Designation and Management of Free Trade Zones).
Reduction and exemption of rents
- The administrative authority or the head of the relevant local government may deem a
foreign-capital invested company located in a free trade zone to be a foreign-capital invested company
located in a foreign investment zone under Article 18 of the Foreign Investment Promotion Act and reduce or exempt its rents. With respect to a foreign-capital invested company that runs a business using high technology that is critical to bolstering the international competitiveness of the domestic industry, the administrative authority or the head of the relevant local government may reduce or exempt the rents in addition to the reduction and exemption of the rents referred to in Article 20.(1) of the Act on Designation and Management of Free Trade Zones (Article 20 of the Act on Designation and Management of Free Trade Zones).
Key content related to location support in the Special Act on the Establishment of the Jeju Special Self-Governing Province & the Development of Free International Cities
Designation of Jeju investment promotion zones
- The Do governor may designate areas on the Jeju Special Self-Governing Province as Jeju
investment promotion zones which will attract projects where 5 million U.S. dollars or more will be
invested after deliberation by the Committee on the Deliberation of the Master Plan for the Jeju Free
International City thereon (Article 217 of the Special Act on the Establishment of the Jeju Special
Self-Governing Province & the Development of Free International Cities).
Financial support
- In the event that the Development Center requests financial assistance for the formation of
science and technology complexes, financing of funds to purchase sites to be leased to resident companies in investment promotion zones, reduction and exemption of rents of land, etc., and funds required for other development projects, the central government and the Jeju Special Self-Governing Province shall provide maximum support. To promote investment in the Jeju Self-Governing Province, the Do governor may pay employment subsidies, education and training subsidies, etc. (Article 219 of the Special Act on the Establishment of the Jeju Special Self-Governing Province & the Development of Free International Cities).
Special cases for the lease and sale of State and public-owned properties
- The Minister of Strategy and Finance, administrative agencies in charge of managing State
- When leasing land, etc. owned by the State government or the Jeju Special Self-Governing
Province, such land may be leased on the condition that a facility to be built on the land shall be
donated to the State government or the Jeju Special Self-Governing Province. Without such condition,
the land shall be returned to its original state according to the type of facility concerned when the
lease period expires. As such, the building of a factory or other permanent facilities may be allowed
on the land concerned (Article 220.(3) of the Special Act on the Establishment of the Jeju Special
Self-Governing Province & the Development of Free International Cities).
Key content related to cash support, support for leases, etc. of State and public properties, and administrative support in the Foreign Investment Promotion Act
Support in cash
- In the event that a foreigner makes foreign investment falling under certain conditions, the
State and local governments may furnish to the foreigner a fund in cash required for specific uses,
including the construction of new factories, taking into account whether such foreign investment
accompanies high technology, the effect of technology transfer, the size of job creation, whether the
foreign investment overlaps any domestic investment, and relevance, etc. of the location in which the
foreign investment is made. The amount of the financial support in cash shall be set after going
through negotiations with the relevant foreign investor and deliberation by the Foreign Investment
Committee (Article 14-2 of the Foreign Investment Promotion Act).
Support for leases, etc. of State and public properties
- Foreign capital-invested companies may use, profit from, lease, or purchase through free
contracts land, factories, and other properties owned by the State, local governments, governmentinvested
institutions or local public enterprises. When leasing State and public-owned land, foreigncapital
invested companies may build a factory or other permanent facilities on the land. The lease period of land may be up to fifty years and rents be reduced and exempted. When foreign-capital invested companies purchase land, the payment settlement date may be extended or payment may be made in installments (Article 13 of the Foreign Investment Promotion Act).
Administrative support
- Establishment and operation of Foreign Investment Support Center
- A Foreign Investment Support Center shall be established under the Korea Trade and Investment Promotion Agency in order to provide or conduct consultations, guidance, advertisement,
- Ombudsman for foreign investment
To support grievance settlement for foreign investors and foreign-capital invested companies, a foreign investment ombudsman shall be commissioned by the President on the recommendation of the Minister of Knowledge Economy, via deliberation of the Foreign Investment Committee(Article 15-2 of the Foreign Investment Promotion Act).
- Foreign investment promotion offices
- Every central administrative agency, special metropolitan city, metropolitan city, Do and
- Special cases concerning handling of civil petitions by foreign investors
- To efficiently handle civil petitions such as permission, authorization, licensing, approval, designation, cancellation, report, recommendation, and consultation necessary for a foreign investor or a foreign-capital invested company to make an investment or engage in a business in Korea, civil petitions related to foreign investment are classified according to business acts, and when important civil petitions are completed, other related civil petitions shall also be regarded as completed. There are also civil petitions that the dispatched officer shall handle directly (Article 17 of the Foreign Investment Promotion Act).
Source : http://www.depthai.go.th