Set-up Branch/Liaison
Incentives for Foreign Direct investm(FDI)
Certified “FDI Company” by the Ministry of Industry & Resources shall be eligible to enjoy several benefits as according to the Foreign Investment Inducement Law as follows
Tax Holidays
The FDI shall be eligible to the Tax Holidays in case that;
(1) In case that the Subsidiary shall install the manufacturing facilities in order to engage in the business involving so called the “High-techs for New Growth Engine”(Appendix별표7) prescribed in the Tax Exemption Limitation Law,armed with the capital over the specified amount by the Ministry of Finance.
(2) In the case of the following Large scale of FDI
■ 30 million US Dollars or more: Manufacturing, SI, Industry Supporting business etc.
■ 20 million US Dollars or more: Touring related business etc.
■ 10 million US Dollars or more: Logistics, Port, SOC related business etc.
■ 2 million US Dollars or more: R&D Center
(3) Specific FDI in connection with the “Economic Free Zone ” or “ Sae-Man-Geum Porject” or “Jeju International Free City” prescribed in the Tax Exemption Limitation Law.
Tax Holidays Method is that the total (100%) first incomeearned after the business starting yearshall be exempted from the corporation taxes during the five(5) years from the first year when and 50% income shall be exempted during the following sequential next two(2) years.
The Subsidiary who is willing to enjoy the tax holidays, shall apply for tax holidays before the end of the business starting year and then tax authority shall review and approve the application, if considered to be entitled to.
Cash grant for the FDI as following
In consideration whether the FDI introduce the High technology into the Korean industry, or technical transfer effects and create the substantial volume of new jobs in the domestic area, Government shall grant cash subsidy to the following FDI investment in order to
■ To install the manufacturing facilities for the purpose of doing business, which shall be eligible to the corporation tax exemption prescribed according to the tax holiday regulations
■ To install the manufacturing facilities in order to produce the high-tech materials, components and equipment/machine center etc. prescribed according to the related Law.
■ To install the manufacturing facilities for the purpose of doing business, which shall hire the new employees over the mandatory numbers prescribed according to the following business category;
- Manufacturing, construction, etc.; over 300 employees
- Agriculture, Wholesale, etc.; over 200 employees
- Environment, Education, etc.; over 100 employees
- Real estate; over 50 employees
■ To install R&D center for the business eligible for the corporation tax hiring over 5 employees who have the graduate degree or college degree with the work experiences in those business categories.
To install the overseas regional Headquarter in Korea, which shall support or control the overseas business as like production, distribution, logistics and human resources of two (2) or more Branch or Subsidiary according to the related regulations.
Exemption of the rent for factory Land located in FDI zone or industrial complex owned by central or local government.
The following FDI shall be eligible for the rent exemptions for factory land:
■ To engage in the manufacturing business in Korea, armed with the capital amount over 5 million dollars.
■ To engage in the high-tech business eligible for the corporation taxes in Korea, armed with the capital amount over 1 million dollars.
■ To engage in the business in Korea in the FDI zone.
■ To engage in the specified business in Korea, armed with the capital amount over 2.5 million dollars, hiring 70 or more employees .
Incentive for the large scale of FDI
In case of the following large scale of FDI, you can apply for designating those location as “Free Zone of Foreign Direct Investment(FDI Zone)”, which shall be given to the Tax Holidays as well as the several kind of incentives, in accordance to the FDI Inducement Law
■ 30 million US Dollars or more: Manufacturing, SI, Industry Supporting business etc.
■ 20 million US Dollars or more: Touring related business etc.
■ 10 million US Dollars or more: Logistics, Port, SOC related business etc.
■ 2 million US Dollars or more: R&D Center
Note: The further detail information regarding the FDI Incentives shall be discussed again on the actual business in Korea
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