A foreigner investment zone is designated to facilitate foreign investment, and provides various investment incentives for moving-in companies in the zone.
It is categorized into complex-type, individual-type, R&D-type, and service-type, which vary in terms of the designation requirements, occupancy requirements and limitations and investment incentives.
The individual-type and service-type foreign investment zone allows the development of tourism business such as tourist hotel, general resort complex, etc. prescribed in the Tourism Promotion Act.
Source : The Foreign Investment Promotion Act.
|Related Laws||Location||Main Business||Residency|
|Complex-type||Article 18 (1) 1 of the Foreign Investment Promotion Act||In the industry complex||Manufacturing||Two or more investors can move into the zones, but it is allowed only to foreign companies.|
|Individual-type||Article 18 (1) 2 of the above Act||In the area an investor prefers, that will be a business.||Manufacturing, tourism, distribution, etc.||Only one foreign company can move into the zones.|
|R&D-type||Article 18 (1) 3 of the above Act||In the area prescribed by the Enforcement Decree of the Act||R&D||Two or more investors can move into the zones, but it is allowed only to foreign companies.|
|Service-type||Article 18 (1) 4 of the above Act||Designating Site||Business such as finance, culture, tourism, etc. prescribed by the Enforcement Decree of the Act||Two or more investors can move into the zones, regardless of domestic or foreign companies.|
Source : Ministry of Trade, Industry and Energy Invest Korea (2014). Support Systems of Location and Approval/Permission for Foreign Investment
Tourism Business in Foreign Investment Zone
Tourism Business in Individual-type Foreign Investment Zone
A zone may be designated as the foreign investment zone for tourism business after undergoing deliberation by the Foreign Investment Committee.
plan under the Tourism Promotion Act.
Source : Article 25 (1) of the Enforcement Decree of the Foreign In vestment Promotion Act; Ministry of Trade, Industry and Energy Invest Korea (2014). Support Systems of Location and Approval/Permission for Foreign Investment.
Tourism Business in Service-type Foreign Investment Zone
A foreign investor or a foreign-invested company that already effected the registration of a foreign-invested company shall qualify for moving in a foreign investment zone if he/she or it invested at least 100 million KRW or own at least a 30 percent stake of foreign investments.
Less than 50 percents of an entire foreign investment zone shall be occupied by domestic corporations, but they cannot apply for exemption on rental charges.
|Main Businesses||Related Laws|
|Recreational condominium, tourist hotel, floating tourist hotel, traditional Korean hotel, family hotel, hostel, specialized resort, general resort complex, general amusement complex, tourist excursion ship, international conference facilities, youth training facilities||Article 25 (3), (4), and (5) of the Enforcement Decree of the Foreign Investment Promotion Act|
A investor who invests in tourism business in a foreign investment zone shall have various incentives such as favorable location, tax/rental charges reductions or exemptions, etc.
|Purchase of Land||Where the State is requested to provide funds for the purchase of land to be leased to any foreign-invested company, it shall pay 40 percent of the purchase price (local government: 60%) for the purchase of land in the capital area, while paying 75 percent (local government: 25%) for the purchase of land outside the capital area.||
|Tax Reductions or Exemptions||
|Rental Charges for State and Public-owned Land||
|Support for Infrastructure||
|Support for Foreign Investment Promotion Activities||
1) Imported capital goods
2) Some local governments grant longer reduction or exemptions periods up to 15 years by their ordinance.
|Rental Charges for Land||The rental charges for land shall be the amount computed by multiplying the value of land by the rate of at least 10/1,000, but at least 50/1,000 in case of failure to meet residency requirements.||
|Rental Charges for Building||Where buildings in a foreign investment zone are not owned by the State or publicly owned pourparty, 50 percent of rental charges for the relevant building shall be funded.||
|Financial Support||With respect to the rent of land or buildings to be leased to any foreign-invested company, 50 percent of rental charges shall be funded, and the State shall pay 40 percent of the rental charges (local government: 60%) for the rent of land or buildings in the capital area, while paying 75 percent (local government: 25%) for the rent of land or buildings outside the capital area.|