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Tax Incentives
Foreign investors can claim exemptions on a range of taxes including national taxes (corporate, income) and local taxes (acquisition, registration, property and aggregate land tax). The Special Tax Treatment Control Act was enacted to codify the tax benefits and, thereby, secure these benefits statutorily. The act provides legal grounds for the tax breaks that foreign investor can enjoy and stipulates the eligibility, specific tax breaks granted and the procedures for applying for them.
Business Eligible for Tax Incentives
The act stipulates that a foreign-invested company must perform the following in order to be eligible for tax-breaks :
- High tech business or industry support service business
- Located in a Foreign Investment Zone
Tax Exemption & Duration
Type of Tax
Exemption and Duration
National Taxes
Coporate Tax
Income Tax
100% exemption for the 1 st 5 taxable years after profits are first generated50% reduction for following 2 years
Local Taxes
Acquisition Tax
Registration Tax
Property Tax
Aggregate Land Tax
100% exemption for 15 years on biz-purpose building & land after commencement of business operations
Customs Excise and Value-added Tax
100% exemption for the 1 st 3 years after reporting of investment
Incentives on Leasing Public Property
The Foreign Investment Promotion Act (FIPA) provides various privileges to foreign-invested enterprises in the leasing and purchase of government land. The maximum lease term is fifty years, which can be extended on renewal by another fifty years. The FIPA stipulates in detail the incentives for leasing government property in Foreign Investment Zones, Foreign-exclusive Industrial Complexes and National Industrial Complexes.
Rental Discount Rates by Investment Area
Investment Area
Rental Discount
Foreign-Invested entity investing in a Foreign Investment Zone
100%
Resident company in a Foreign Exclusive Industrial Complex
100% (Co. in high tech industry making an investment of at least 1 million US$)
75% (general manufacturer making an investment of at least 5 million US$)
Municipal Subsidies
Beneift Type
Incentives
Incentives Limit
Land Purchasing Grant
Within the limit of 30% of land purchase expense Employment effect considered
N/A
Employment Grant
Max 6 months within the limit of 500 US$ per workers when over 20 workers employed
0.2 million
Employment Training Grant
Max 6 months within the limit of 500 US$ per tarinees
0.2 million
Facility Grant
Within the limit of 5% of over 2 million of facilities investment
0.2 million
Relocation Grant
Within the limit of 10% of foreign investment amount (new investment)
0.2 million
Consulting Cost Grant
Within the limit of 1% of final investment amount when business commenced
0.2 million
Special Benefit for large-scaled investment can be offered in excess of the grant stipulated in the regulation when fresh investment is more than 50 million US$ or 300 regular workers are employed.
Tax Incentives
Business Eligible for Tax Incentives 
