Amended on January 1, 2007 Ordinance No. 3467
Amended on January 1, 2007 Ordinance No. 3457 (Ordinance of Administrative Organization)
Amended on August 1, 2007 Ordinance No. 3523
Entirely Revised on February 15, 2008 Ordinance No. 3571
Amended on January 1, 2009 Ordinance No. 3658
Amended on April 15, 2009 No. 3681

Chapter 1. General Provision

Article 1 (Purpose)

This Ordinance shall state measures to develop regional industry foundation and revitalize the economy of Gwangju Metropolitan City (hereinafter referred to as "Gwangju") by effectively promoting domestic and foreign investment and supporting corporate investment with regard to relevant issues prescribed in the Special Act on Balanced National Development and the Foreign Investment Promotion Act.

Article 2 (Definition)

The terms used in this Ordinance shall be defined as follows:

1. "Foreigner" shall refer to foreign nationals defined in Article 2.1.1 of the Foreign Investment Promotion Act (hereinafter referred to as the "Act").
2. "Foreign investment" shall refer to the stipulations in Article 2.1.4 of the Act.
3. "Foreign invested-company" shall denote an enterprise as stipulated in Article 2.1.5. of the Act.
4. "Factory facility" shall refer to as a factory, headquarters, research center, and worksite of the business service industry (hereinafter referred to as "business service") as prescribed in the provisions of Article 2.2 of the Enforcement Ordinance on Industrial Cluster and Factory Establishment.
5. "Industrial complex" shall refer to as an industrial complex described in Article 2.5 of the Industrial Sites and Development Act.
6. "Headquarters" shall refer to as a worksite located at the headquarters or main office specified in the registration of incorporation.
7. "Research center" shall refer to as a corporate research institute prescribed in Article 7 of the Technology Development Promotion Act.
8. "Number of full-time employees" shall indicate the average number of wage earners for the latest three months, registered in the income tax withholdings report submitted to the regional tax office under Article 185.1 of the Enforcement Decree of the Income Tax Act, who offer labor to the company for income.
9. "Initial date of business" shall denote the date of factory registration under Article 16 of the Act on Industrial Cluster and Factory Establishment, the date of business registration under Article 168 of the Income Tax Act, the date of launching business under Article 5 of the Value Added Tax Act, or the date of approval for the use of buildings and facilities under Article 18 of the Construction Code with an exception that the date of employment may be recognized as a new initial date of business, if companies that have already built its presence and operations in Gwangju hire new full-time employees and meet the qualifications to receive employment subsidy <Newly established on January 1, 2009>.

Chapter 2. Organization and Operation of Investment Promotion Agency and Committee

Article 3 (Organization and Operation of Administrative Agency)

The Mayor of Gwangju Metropolitan City (hereinafter referred to as the"Mayor") may organize and operate an investment promotion headquarters and investment promotion planning council composed of officials of the Gwangju Metropolitan City Government (hereinafter referred to as the"City") to devise comprehensive plans for investment promotion and implement investment promotion policies.

Article 4 (Establishment of Investment Promotion Committee)

• ① The Gwangju Metropolitan City Investment Promotion Committee (hereinafter referred to as "Investment Promotion Committee") shall be established to discuss, advise, and deliberate on important issues necessary for promotion of domestic and foreign investment.

• ② Investment Promotion Committee shall engage in the following activities:

• 1. Consulting and advice on investment promotion policies with regard to selection of business sectors for investment promotion, promotion strategies, etc.
  2. Domestic and foreign investment promotion activities
  3. Resolution of grievances by corporate investors
  4. Deliberation on the provision of subsidies or grants to corporate investors
  5. Other issues deemed necessary for investment promotion by the Mayor

Article 5 (Organization of Investment Promotion Committee, etc)

• ① The Investment Promotion Committee shall consist of 30 or fewer members including the Chairman and Deputy Chairman.

• ② The Chairmanship shall be taken by the Mayor, and Deputy Chairman shall be elected among the members <Amended on January 1, 2009>

• ③ Deputy Mayor for Political Affairs and Director General of Economy and Industry shall become ex officio councilors, and a councilor nominated on recommendation shall be appointed by the Mayor's request.

• 1. A lawmaker on the Industrial Construction Committee, recommended by the Gwangju Metropolitan City Council
  2. Executives of an investment promotion agency or investment promotion organization
  3. Entrepreneurs, lawyers, CPAs, or professors including full-time lecturers in the field of investment promotion
  4. Others with expertise and experience on investment promotion④ The term of an ex officio member of the Committee shall indicate his or her time in office, and a member nominated on recommendation shall hold the post for two years in office and be allowed for re-nomination.

• ④ The Council may employ a director to govern general affairs and the director shall become the head of the investment promotion team.

Article 6 (Meeting)

• ① The Investment Promotion Committee shall be convened whenever recognized as necessary by the Mayor or at the request of the members.

• ② A quorum for a meeting of the Committee shall be the presence of a majority of all members and all resolutions shall be adopted by the affirmative vote of a majority of the members present.

Article 7 (Allowance and Reimbursement of Expenses, etc.)

• ① An appointed member on the Investment Promotion Committee by recommendation may receive allowances within the budget as follows:

• 1. Allowance for attendance and activities in the Investment Promotion Committee in accordance with Ordinance on Organization and Operation of Committees in Gwangju Metropolitan City
  2. Expenses for investment promotion activities including research on improving investment climate, collection and analysis of invested companies' data at the request of the Mayor② The provision of Paragraph ① shall apply to issues associated with allowances and expenses described in Article 8 to Article 10.

Article 8 (Advisory Panel for Investment Promotion)

The Mayor may organize and manage the Gwangju Metropolitan City Investment Promotion Advisory Panel (hereinafter referred to as "Advisory Panel") to seek expertise and information to facilitate investment promotion and to promote investment activities in the region.

Article 9 (Honorary Overseas Investment Promotion Consultant)

The Mayor may nominate and appoint overseas investment promotion consultant (hereinafter referred to as "Overseas Consultant" in major cities around the world to collect and exchange data on foreign companies and read their business trend.

Article 10 (Organization of Working Level Consultative Council)

The Mayor may organize and manage Gwangju Metropolitan City Working Level Investment Promotion Consultative Council(hereinafter referred to as "Working Level Consultant Council") to actively promote investment in organically close cooperation with relevant parties including companies, economic organizations, academia, research institutes, etc.

Article 11 (Request for Civil Expert)

• ① The Mayor may request the dispatch of relevant experts from private companies or investment promotion agencies or groups for effective investment promotion.

• ② The municipal government may grant the use of city government properties (including accommodations) or provide financial support for investment promotion within the budget to experts dispatched in compliance with Paragraph ①.

Article 12 (Foreign Investment Promotion Office)

Gwangju may establish a Foreign Investment Promotion Office, in accordance with Article 16 of the Act and Article 22 of the Enforcement Decree of the Act, for which the Investment Promotion Headquarters shall govern the related affairs.

Article 13 (Operation of Investor Support Center)

• ① The Gwangju Metropolitan City Government may establish and operate the Regional Investment Support Center (hereinafter referred to as "Investment Support Center") within the Seoul Metropolitan Area to step up cooperation with central government departments and Investor Support Center of Korea Trade-Investment Promotion Agency and effective investment promotion towards domestic and foreign corporate investors.

• ② The Mayor may hire outside experts on investment promotion and have them work at the Investment Support Center, if necessary.

Chapter 3. Support for Corporate Investors

Article 14 (Support for Corporate Investors)

The Mayor may offer administrative and financial support to corporate investors deemed to be contributing to local economic development on the following items:

1. Issues associated with relocation and establishment of corporate investors
2. Issues on labor welfare for employees of invested companies, e.g. supply of apartment residences
3. Issues on education of foreign employees and their children
4. Issues on promoting export and improving productivity of corporate investors
5. Issues on building infrastructure as stipulated in the Act on Private Investment in Social Overhead Capital
6. Other issues deemed necessary for investment promotion by the Mayor

Article 15 (Exemption from Local Tax)

• ① Local taxes on properties that a foreign-invested company acquires or possesses to operate the business may be cut or reduced in accordance with the provisions of the Restriction of Special Taxation Act, Gwangju Metropolitan City Ordinance on Municipal Tax Exemption Act, or County Tax Exemption Act of each self-governing county.

• ② Local taxes levied on domestic companies that have made investment in Gwangju may be cut or reduced in accordance with the provisions of the Local Tax Act, Restriction of Special Taxation Act, Gwangju Metropolitan City Ordinance on Municipal Tax Exemption Act, or County Tax Exemption Act of each self-governing county.

Article 16 (Sale and Lease of Public Properties)

• ① The Mayor may sell public properties to corporate investors on favorable conditions under Article 13 of the Act or the Gwangju Metropolitan City Ordinance on Public Property Management by taking into account the possibility of job creation, technology transfer, and spillover effect on the local economy, and allow the companies to make payment in installments.

• ② The Mayor may lease the properties in compliance with the provisions of Article 13 of the Act and Gwangju Metropolitan City Ordinance on Public Properties Management, if a company applies for lease or rent of the public properties for the purpose of investment.

Article 17 (Qualifications for Foreign-Invested Companies, etc.)

• ① Companies that are eligible for various subsidies on foreign-invested companies shall meet the following requirements:

• 1. Any foreign-invested company shall have a foreigner as the largest shareholder or over 30 percent of its shares owned by foreigners.
  2. If a Korean national or corporation directly or indirectly possesses a foreign company's stocks that have voting rights, such stocks shall not be included in assessing foreign investment ratio described in Paragraph ①.② The total sum of financial assistance for a foreign-invested company shall not exceed the amount of investment made by the foreign-invested company.

• ② The total sum of financial assistance for a foreign-invested company shall not exceed the amount of investment made by the foreign-invested company.

• ③ In the case where the government offers funds under the provision of Article14.2 of the Act, the Mayor may provide financial support to the foreign-invested company proportionate to the support fund ratio determined by the government.

Article 18 (Companies Eligible for Subsidies)

• ① The Mayor may provide subsidies to a company that relocates their business from the outside into the City, or a company that expands facilities within the subsidy application period, or a company that moves to the industrial complex after operating business incubation facilities within the region, or a start-up in the key industries recognized by the Mayor as necessary for the City's development, if it falls on any of the following categories.

• ② The Mayor may lease the properties in compliance with the provisions of Article 13 of the Act and Gwangju Metropolitan City Ordinance on Public Properties Management, if a company applies for lease or rent of the public properties for the purpose of investment.<Amended on April 15, 2009>

  1. A company with investment worth more than KRW 2 billion and at least 20 full-time employees
  2. A company with 50 or more full-time employees
  3. A company relocated from the Seoul Metropolitan Area (hereinafter referred to as "Relocated Companies") that is eligible for subsidies under the provision of Article 6 of the Local Government Standards on Financial Support for Companies Relocated from the Outside
  4. A company with investment worth more than KRW 1.5 billion, which is severally prescribed in the Enforcement Regulations
  5. Headquarters or research institute with investment worth more than KRW 1 billion and at least 10 full-time employees.

• The Investment Promotion Committee shall deliberate on and determine the eligible start-up in the key industries recognized by the Mayor as necessary for the City's development stipulated in Paragraph ①.

• ③ The Mayor may provide support to attract capital investment, even if it is not to attract domestic and foreign companies to the City, barring investment in businesses stipulated in Article 9.1 of the Enforcement Decree of the Restriction of Special Taxation Act (consumption-oriented service industries), businesses stipulated in Article 60.2.1 of the Enforcement Decree of the Restriction of Special Taxation Act (real estate and construction), or wholesale and retail business.

Article 19 (Industrial Site Location Subsidy)

The Mayor may finance part of the land purchasing cost within the budget as site location subsidy, if a corporate investor acquires land within an industrial complex.

Article 20 ((Investment Support Subsidy)

Investment Support Subsidy may be provided to a corporate investor within the budget for expenses required to purchase, install, or relocate a building or facility, or construction equipment prescribed in Article 2 of the Construction Code to newly establish or expand factories, etc. <Amended on April 15, 2009>

Article 21 (Employment Subsidy)

The Mayor may provide employment subsidy within the budget for newly hired full-time employees who exceeds the fixed number of workforce.

Article 22 (Training and Education Subsidy)

The Mayor may provide training and education subsidy within the budget to corporate investors that train and educate newly hired full-time employees in order to cultivate them into excellent human resources for corporate activities.

Article 23 (Regional Elective Subsidy)

The Mayor may provide regional elective subsidy within the budget to a foreign-invested company that makes a certain amount of investment, provided that beneficiary of site location subsidy pursuant to Article 19 shall not receive regional elective subsidy.

Article 24 (Subsidies for Consulting Services)

The Mayor may provide subsidies within the budget to cover the consulting fee, if a company commissioned consulting services to invest in the City.

Article 25 (Subsidy Ceiling)

• ① Notwithstanding the provisions of Article 19 to Article 25, the Mayor may provide special assistance to large corporate investors that is considered to have significant influence on the regional economy, in which case, the subsidy provision shall be approved by the City Council in advance.

• ② A large corporate investor shall be defined as follows:

  1. A foreign-invested company with at least USD 50 million of investment or over 300 full-time employees
  2. A domestic company with at least USD 50 billion of investment or over 300 full-time employees

Article 27 (Financial Support)

The Mayor may preferentially support corporate funds managed by the City including SME Development Fund under the Ordinance of Gwangju Metropolitan City SME Development Fund Establishment and Management.

Article 28 (Improvement of Living Conditions for Foreign Nationals)

• ① The Mayor may finance part of the cost to manage or operate the part or entirety of facilities or land, within the budget to improve living conditions for foreigners in any of the following cases:

• 1. Establishment or expansion of foreign schools (including residences for foreign teachers)
  2. Establishment of residential complex for foreign nationals
  3. Establishment of support facilities for foreign residential complex including daycare centers or medical centers

• ② Rent or usage rate for public properties shall be in accordance with the rates stipulated in Article 28.4 of the Gwangju Metropolitan Ordinance on Public Property Management, if the public assets are up for use of foreign schools or auxiliary facilities.

Article 29 (Support for Industrial Complex Development Project)

• ① In the cases deemed necessary by the Mayor, the Mayor may offer support to businesses stated in Article 2.6 of the Act on Industrial Site and Development from general accounting or other special accounting.

• ② In the case of transferring accounting to put the properties built by the business pursuant to Paragraph ① to public use, the accounting transfer may be executed free of charge with the consent of the City council.

Chapte 4. Follow-up Management of Invested Enterprises

Article 30 (Follow-up Management)

• ① The Mayor shall document and provide the list of corporate investors that receive subsidies stated in this Ordinance.

• ② The Mayor shall take follow-up measures after provision of subsidies to invested enterprises by checking on them on a regular basis.

Article 31 (Cancelation or Refund of Subsidies)

① The Mayor shall cancel, or demand full or partial refund of subsidies from the recipients under any of the following circumstances <Amended on January 1, 2009>:

• 1. Closing or idling factories within three years of the initial date of operation without a just reason
  2. Receiving subsidies via a false means and methods
  3. Giving up or canceling businesses within five years for which the company was eligible for subsidies
  4. Failing to operate factories within two years after construction
  5. Construction of factories lagging far behind the schedule or completion seemingly almost impossible
  6. Any other cases considered unable to achieve the goal of subsidy provision
  7. Failing to launch factory construction within 18 months after the sales contract on land, etc. was signed <Newly Established on April 15, 2009>

• ② The corporate recipient of subsidies shall maintain its business stated in the business proposal submitted to apply for subsidy grant for at least ten years, and shall seek the Mayor's approval in advance, if it wishes to transfer to other business.

• ③ The Mayor shall demand full refund of subsidies, if the corporate recipient of site location subsidy or investment support subsidy sells the land or moves to other cities or provinces within five years of initial date of business. The Mayor shall demand refund proportionate to the period of stay within the City, in the case where the recipient disposes of the properties or moves to other cities or provinces. <Amended on April 15>

• ④ The corporate recipient of employment subsidy or education and training subsidy shall maintain the size of employment for at least three years as long as there is no just reason to dismiss employees. In case of breaching this, the Mayor may demand refund of subsidies proportionate to the number of staff and period for which the company has violated the requirements.

• ⑤ In the cases of other subsidies, the Mayor shall demand full refund if the corporate recipient moves to other cities or provinces within five years of the initial date of business and redeem subsidies proportionate to the period of breaching the requirements if the recipient moves to other cities or provinces within ten years of the initial date of business.

Chapter 5. Supplementary Provisions

Article 32 (Provision of Incentive, etc.)

• ① The Mayor may grant incentive to an individual (organization, group, company) recognized for having made significant contribution to inducing investment from domestic and foreign enterprises

• ② The Mayor may offer opportunities for promotion, pay raise, incentive to a municipal government official recognized for having made significant contribution to induce investment from domestic and foreign enterprises by and under relevant rules and regulations.

Article 33 (Management of Civil Affairs)

• ① The Mayor shall handle civil affairs by seeking cooperation from relevant government agencies, if reported cases on business launch or factory establishment are associated with the agencies.

• ② Civil affairs to be handled in accordance with Paragraph ① shall be as follows:

• 1. Civil affairs on launch or expansion of business including factory
  2. Sale of factory sites, sales contract, factory registration
  3. Sale or lease of factory sites reserved for foreigners
  4. Grievances of corporate investors or other issues

Article 34 (Application of Other Ordinances, etc.)

Relevant provisions under the Gwangju Metropolitan City Subsidy Management Ordinance shall apply to other issues that are not stipulated in this Ordinance with regard to the execution or settlement of budget.

Article 35 (Enforcement Regulations)

Any issue deemed necessary for various subsidies, procedures and standards of incentive grants concerning the enforcement of this Ordinance shall be stipulated in the Enforcement Regulations.

Addendum

• ① (Date of Enforcement) This Ordinance shall be effective from the date of its promulgation.

• ② (Interim Measures for Invested Companies) Provision of subsidies to corporate investors that have already launched business before the enforcement of this Ordinance shall comply with the provisions of previous regulations.

Addendum <Ordinance no. 3658, on January 1, 2009>

This Ordinance shall be effective from the date of its promulgation.

Addendum <Ordinance no. 3681, on April 15, 2009>

This Ordinance shall be effective from the date of its promulgation.