h1 Title

SEZ (special economic zone) System

Procedure for designation

1. Establishment of a development plan (by the head of a local administrative unit)
   • ※ A development plan shall include: the name, location, size of the SEZ, explanation of the need for the designation and the contractors of the development projects carried out within the zone. (Refer to the Special Economic Zone Act, Article 6, and Its Enforcement Ordinance, Article 5.)
2. Asking the Ministry of Strategic Planning and Finance for the designation
3. Deliberation by the SEZ Committee
4. Designation (by the Minister of Strategic Planning and Finance)
   • ※ At the time of designation, the following factors shall be considered: the possibility of attraction of foreign investors and securing sites required, ripple effects on the local economy and balanced development of the region, development expense, the availability of an international airport, a port and the information/communication network, convenience of transportation, water/power supply. (The SEZ Act, Article 5)

Procedure for development

1. Setting up the implementation plan (by the development project contractors) within 2 years of the public notice of the designation of an SEZ
   • The implementation plan shall include: the location, size, period and the plan for securing and using the site (The SEZ Act, Enforcement Ordinance, Article 8)
2. Approval of the implementation plan (by the Minister of Strategic Planning and Finance)
   • ※ With the implementation plan approved, other relevant approvals and authorizations shall be deemed to have been obtained. (The SEZ Act, Article 11)

System concerning Jeju Special Self-Governing Province

Purpose of the designation

1. To foster core industries in the island through the special treatment of State- or municipally-owned property and tax reduction/exemption for both Koreans and foreigners as an investment promotion zone

Basis of promotion

1. Relevant law/guidelines: The Special Law for Designation of Jeju Special Self-Governing Province and formation of the Free International City, Article 217; The Guideline for Operation of the Jeju Investment Promotion Zone

Eligible types of businesses and requirement

1. (marine) tourist hotel; traditional Korean-style hotel; resort (except golf course); cruise ship; performance facility; international conference facility; cultural industry; welfare facility for senior citizens; youth training center; cable car/cog rail; alternate energy; corporate training center; medical service; education facility; information/bio technology-related business
2. Requirement for designation: Investment of $50 million

Procedure for designation

1. Making a plan (by Mayor or Provincial Governor) ? Deliberation by the Support Committee headed by the Prime Minister ? Notice of designation (by Mayor or Provincial Governor)

Governmental support provided to investors

1. Corporate/income tax: Exempt for the first 3 years and reduction by half for the next 2 years
2. Property tax: Exempt for the first 10 years
3. Registration/acquisition tax: Import duties exempt concerning capital goods imported for the first 3 years

If designated as an investment promotion zone (for tourism, resort business) after the purchase of land, it is possible to cancel the retroactive imposition registration/acquisition tax. (The foregoing does not apply to the land remaining unused for more than 3 years or resold within 3 years.)

1. Special levy, such as Farming Land Formation Expense: Reduced by half.
2. Lease of State or municipally-owned land: Reduced up to 75/100(75%) for up to 50 years (renewable)
   • ※ The Investment Promotion Zone System is the most advantageous for joint investment of domestic and foreign capital.
3. Incentives offered under the Foreign Investment Zone Promotion Act apply based on the ratio of the amount of foreign investment.