Skip Menu
go to contents go to top menu

Investment Support System

We introduce materials which give help to investment related to tourism investment.
Main Investment Support System Investment Support By Project Private Investment Projects
print

Private Investment Projects

Introduction

According to Article 2 of the Act on Public-Private Partnerships in Infrastructure, the term "public-private partnership project" means any project proposed by a private sector, or any infrastructure facilities project conducted by a concessionaire, in accordance with a master plan for a public-private partnership facilities project to contribute to the development of the national economy by encouraging the creative and efficient expansion and operation of infrastructure, by promoting the investment of the private sector in such infrastructure.


A concessionaire finances and implements a public-private partnership project, transfers the ownership of the facilities to the State or a local government upon the completion of construction, and has the rights to manage and operate the infrastructure facilities, recouping his/her investments.

According to the above article, the term "infrastructure facilities" means any of the fundamental facilities which serve as the foundation of production, increase the efficiency of such facilities, and accommodate the convenience of users and in the lives of the public,

Implementation Methods

Public-private partnership projects shall be conducted in one of the methods prescribed in the below table.

Implementation Methods of Public-Private Partnership Projects
Implementation Methods of Public-Private Partnership Projects
Key Contents
BTO
Build-Transfer-Operate
The mode by which the ownership of the infrastructures shall be transferred to the State or a local government upon the completion of construction, and the concessionaire shall have the rights to manage and operate the infrastructure facilities for a specified period.
BTL
Build-Transfer-Lease
The mode by which the ownership of the infrastructures shall be transferred to the State or a local government upon the completion of construction, and the concessionaire shall have the rights to manage and operate the infrastructure facilities for a specified period, but the State or a local government, etc. shall rent them for a specified period as provided for in the agreement, and use them and make profits.
BOT
Build-Operate-Transfer
The mode by which the concessionaire shall assume ownership of the infrastructure facilities for a specified period after the completion of construction, and the ownership shall be transferred to the State or a local government upon the termination of the concession period.
BOO
Build-Own-Operate
The mode by which the concessionaire shall assume ownership of the infrastructure facilities upon the completion of construction.

Source : Article 4 of the Act on Public-Private Partnerships in Infrastructure.

Investment Incentives

An investor who intends to implement a private development project shall be exempt form taxes and any charges, and shall have financial support, the right to expropriate land, etc.

Investment Incentives for Private Investment Project
Investment Incentives for Private Investment Project
Incentives Related Laws
Tax Reductions or Exemptions Where the amount of foreign investment is at least 10 million USD.
  • Article 57 of the Act on Public-Private Partnerships in Infrastructure
  • Articles 116-2 (2) and (4) and 121-3 of the Restriction Special Taxation Act
  • Article 116-2 and (3) 3 of the Enforcement Decree of the above act.
National tax Customs1) 100%
Corporate tax / income tax 5 yrs. (100%/3 yrs. & 50%/2 yrs.)
Local tax2) Acquisition tax / property tax 5 yrs. (100%/3 yrs. & 50%/2 yrs.)
  • With respect to interest derived from social infrastructure bonds, which mature in seven or more years, tax rate shall be 14/100 of interest income.
  • Article 29 of the Restriction Special Taxation Act
  • Article 129 (1) 1 (d) of the Income Tax Act
  • Exemption of corporate tax on capital gains on transfer of land created through any public-private partnership project performed by a project operator
  • Article 55-2 (2) 3 and (2) 4 of the Corporate Tax Act
  • Article 92-8 (1) 3 of the Enforcement Decree of the above act
  • Exemption of heavy taxation, 3 times the registration tax of a corporation established in the capital area to implement a private investment project
  • Article 138 (1) of the Local Tax Act and Article 101 (1) 3 of the Enforcement Decree of the above act
Charges Reductions or Exemptions
  • Exemptions of farmland preservation charges, expenses for creation of alternative forest resources, etc.
  • Exemptions of development charges, overconcentration charges, etc.
  • Article 56 of the Act on Public-Private Partnerships in Infrastructure
  • Article 52 of the Enforcement Decree of the Farmland Law
  • Article 23 (1) of the Enforcement Decree of the Mountainous Districts Management Act
  • Article 7 of the Restitution of Development Gains Act
  • Article 13 of the Seoul Metropolitan Area Readjustment Planning Act
Financial Support
  • The State or a local government may grant a subsidy or extend a long-term loan to the concessionaire.
  • Article 53 of the Act on Public-Private Partnerships in Infrastructure
Expropriation of Land
  • The concessionaire may expropriate or use the land, things, or rights.
  • The concessionaire may entrust the head of the relevant local government with the tasks concerning the expropriation and use of land.
  • Article 20 (1) and (3) of the Act on Public-Private Partnerships in Infrastructure
Purchase Claim If a concessionaire of a revertible facility is unable to construct, manage, or operate infrastructure facilities due to inevitable circumstances, including natural calamities, he/she may request the State or a local government to purchase the relevant project.
  • Article 59 of the Act on Public-Private Partnerships in Infrastructure

1) Imported capital goods
2) Some local governments grant longer reduction or exemptions periods up to 15 years by their ordinance.