National and Local Tax Incentives

Businesses Eligible for Tax Incentives

High-tech businesses(467 high-tech businesses according to the Notification of the
Ministry of Knowledge Economy)
Industry-supporting service businesses(111 industry-supporting businesses under the
Notification of the Ministry of Knowledge Economy)

Incentive Provision Method

Application for advance confirmation of tax reduction/exemption:
     Foreign investors may file the application with the Ministry of Strategy and Finance to confirm
     whether their business is eligible for tax incentives before filing FDI notification.
Procedures: application for tax incentives → Ministry of Strategy and Finance → coordination
     with related organizations → provision and notification of tax incentives (decision will be
     made within 20 days)

Period and Amount of Tax Incentives

Tax	Exemption & Deduction
Corporate tax, income tax	exemption for 5 years after the first year of income generation,50% deduction for the following 3 years
Dividend income tax, corporate tax on dividends	exemption for 5 years after the first year of income generation, 50% deduction for the following 3 years
Acquisition tax, property tax, composite land tax	exemption for 7 years after the first year of income generation, 50% deduction for the following 3 years
Tariff, special excise tax, value added tax	capital goods used as investment in kind, capital goods brought in by foreign investors as investment capital, capital goods brought in by foreign investors as dividends

Support for Lease of National and Local Government Properties

Rental Period

lease of land and facilities for the use of foreign invested companies for up to 50 years
(Article 90 of the Intellectual Property Act)

Businesses Eligible for Rent Reduction/Exemption

FDI companies defined in the Foreign Investment Promotion Act (including exclusive
complexes for foreign-invested companies)

Criteria (Article 23.3 of the Provincial Property Management Ordinance)

The rate for reduction/exemption shall be decided according to the investment amount
and the type of business (100%, 75%, 50% reduction).

Exemption/Reduction of Lease

Exclusive complexes for foreign investors

High-tech business with investment of over USD 1 mil. → full exemption

Manufacturing business with investment of over USD 5 mil. → 75% reduction 75%

Other businesses designated by Minister of Strategy and Finance with foreign
investment review committee → 75% reduction 75%

Other areas: 1% of the land price for high-tech businesses

Educational Trainig Subsidy and Employment Subsidy

Subsidy for Educational Training

In the case where FDI companies hire 20 ore more workers and provide them with
educational training
More than 100,000 won per employee per month(Limit: 500,000 won, Maximum 6 months)

Subsidy for Employment

In the case where FDI companies construct new factories, and hire new employees over
20 people within five years from the date of FDI company registration
More than 100,000 won per employee exceeding 20 employees per month
(Limit: 500,000 won, Maximum 6 months)
※ Provided within the budgetary limitations

Financial Support

The provincial government will provide financial support to companies in the province to facilitiate growth, stabilize corporate management.