Relocation of domestic companies

Tax reduction/exemption

• National tax
  • - SMEs that relocated from the Seoul Metropolitan Area to Gwangju are exempt from the duty of corporate tax and income tax for the fisrt five years, and the taxes will be cut by 50% for the following two years.

• Local tax
  • - Companies that newly build or expand factories within an industrial complex are exempt from the duty of acqusition tax and registration tax.
  • - Capital gains on lands and buildings of the companies are exempt from property tax for the first five years and the tax will be cut by 50% for the following three years.

Provision of subsidies

Eligibility

• In general
  • - A company with over KRW 2 billion of investment and more than 20 regular workers

• Exception
  • - Venture capital companies· innovative businesses: with over KRW 1.5 billion of invetsment and more than 15 regular workers
    - Company headquarters · research institute: with over KRW 1 billion of investment and more than 10 regular workers

Ceiling

• A corporate investor may be granted subsidies of up to KRW 5 billion.
• A company moved from the Seoul Metropolitan Area may be granted up to KRW 12 billion
  (limited to location subsidy, facility grant, employment grant, training grant).

By purpose

• Location subsidy
  • - Within the range of 20% of the land price
    - Companies from the Seoul Metropolitan Area may be granted location subsidy within the range of 40% of the land price.

• Facility Grant
  • - Eligibility: a company that invests over KRW 2 billion to newly build or expand production facilities
  • - Grant: 5% of the extra amount over KRW 2 billion, 10% of the extra amount over KRW 2 billion in the case of companies relocated from the Seoul Metropolitan Area
  • * Commonly applied to all foreign-invested companies

• Employment Grant
  • - Eligibility : extra workers over 20 employees that are newly hired among local residents
  • - Grant : KRW 600,000 per month per employee, for up to 6 months
  • * Commonly applied to all foreign-invested companies

• Training Grant
  • - Eligibility : A company that provides monthly vocational training programs for over 20 newly hired workers
  • - Grant: KRW 600,000 per month per employee, for up to 6 months
  • * Commonly applied to all foreign-invested companies

• Consulting Grant
  • - Eligibility : A company that requested consulting services to establish a factory(factories)
  • - Grant : within the range of 5% of confirmed investment, up to KRW 10,000,0000
  • * Commonly applied to all foreign-invested companies

Land lease

• Photonics Industry Cluster
  • - Lease
    • General companies: KRW 7,568/㎡/year (lease for five years)
    • Venture capital· innovative business, foreign-invested company: KRW1,514/㎡/year
  • * Commonly applied to all foreign-invested companies

Financial assistance

• Financial assistance

  Business restructuring cost (6.4% annual interst rate-floating rate) * Commonly applied to all foreign-invested companies	Fixed asset	· a maximum of KRW 1 billion on the condition that repayment should be made in equal installments over five years after a three year grace period
  	Working capital	· a maximum of KRW 300 million on the condition that repayment should be made in equal installments over two years after a one year grace period
  Interest Subsidy Grant for Management Stabilization Cost * Commonly applied to all foreign-invested companies	Ceiling	· up to KRW 300 million per company
  	Eligibility	· based on an agreement with a designated financial institution (2.5~3% interest subsidy)
  - Gwangju Metropolitan City SME Support Center : +82-62-955-4045~6 - Small Business Corporation Gwangju-Jeonnam Regional Headquarters : +82-62-600-3011

Foreign-invested companies

Tax incentives

• Eligibility
  • - Investment in high-tech industries and industry support service businesses determined by Minister of Strategy and Finance and strategic industries of Gwangju

• National Tax
  • - Corporate tax, income tax: exempt from the amount of investment ratio multiplied by tax for five years from the year the first year income was generated, and 50% reduction for the following two years.
  • - Tax will be imposed in case the company failed to generate income after five years of the initial business date.

• Local Tax
  • - Exemption of acquisition tax, registration tax, property tax: exempt from the amount of investment ratio multiplied by tax for 15 years from the first year income was generated.

• Tariff
  • - exempt for three years of the date investment was notified (for companies designated to be exempt from tax)

Subsidy Provision

• Eligibility
  • - 30% foriegn owned company or a comapny with a foreigner as the largest shareholder.
  • - a foreign-invested company by definition: 10% foreign-owned company with over KRW 50 million of investment by each individual investor.

• Location Subsidy
  • 20% of land price, 50% of lease on public properties in consideration of ratio, type, and size of investment (within a year)

• Selective Subsidy Provision
  • - within the range of 10% of total foreign investment up to KRW 200,000,000, in the case of a company with over USD 1 million of foreign investment building new factories
  • - Location subsidy recipients are not allowed to apply for the subsidy.

Cash Grant

• Eligibility
  • - 30% foreign owned company that makes greenfield investment
  • - Industry support service businesses, high-tech businesses, businesses in component manufacturing : more than USD 10 million of investment
  • - R&D in industry support businesses, high-tech businesses: more than UDS 5 million of investment

• Cash grant
  • - Cash grant on over 5% of investment(to be determined through negotiations)
  • - For land purchase, lease, construction cost, infrastructure-building cost, purchase of capital goods, establishment of research facilities, employment and traning subsidies

Lease Reduction

• Pyeongdong Foreign Investment Zone
  • - Lease: KRW 63/㎡/year
  • - Lease period: 50 years (contract renewal required every 10 years)
  • - A company in a high-tech industry with over USD 1 million of investment is exempt from lease payment. A company in the manufacturing industry with over USD 5 million of investment may have the lease cut by 75%.

Special support for large corporate investor

• Foreign-invested company
  • A foreign-invested company that makes over USD 50 million of investment or employs more than 300 workers is eligible for special support.

• Domestic company
  • - A domestic company that makes over KRW 50 billion or employs more than 300 workers is eligible for special support.