Jeollanam-do at a Glance
|Location||At the south west of Korea peninsula|
|Area||12,121.44㎢, 12.1% of national territory|
|Administrative Areas||5 Cities and 17 Counties (31eup, 198myeon, 66dong)|
|Population||Population : 1,938,690, Household : 773,087|
Annual Average Temperature (14.2℃)
Annual Average Rainfall (1,400mm)
|GRDP||KRW 46.4 Trillion|
|Industrial Composition||1st Industry : 28.0%, 2nd Industry : 9.1%, 3rd Industry : 62.9%|
|Number of Manufacturing Businesses||2,700 (as of the end of 2007, company with more than 5 employees)|
① The Hub for Pan-Yellow-Sea Economic Bloc and an Advanced Base for Business into the Global Market
- This region is a hub, and at the same time it is the primary transit base bridging the continent and the ocean that contributes to the development of the Circum-Yellow-Sea Economic Bloc in conjunction with the Western Korean Coastal Zone and the Chinese Eastern Coastal Area that has been designated as economic special district. This province is now emerging as the Advanced Base to the global market for international trade, cargo distributions, telecommunications and other industrial trade as its infrastructure includes seaport facilities, Seaside Industrial Complex and a World-class Maritime Tourist Resort Complex. These facilities conform to international business standards with busy traffic as well as dynamic exchanges of man power including industry-wide general transactions.
② Expansion of SOC
- An enlarged social capital investment program for construction of tourism infrastructures including the double tracked Honam Railway, Muan International Airport, Mok Po New Outer Seaport, and Gwang Yang Container Port, have been implemented on a large scale. This construction program is an effort to improve accessibility to establishments by diversifying approaching routes as the number one priority of the project. Therefore, access to this region and its marketability are expected to make further improvements.
③ Designation of Free Investment Zone, etc.
- Especially, there are not only existing 3 national industrial complexes and 7 local industrial complexes but also 'Daebul Free Trade Complex' which is appointed by government last November, 2002. Besides, it is now reliable that Jeollanam-do province will be appointed an economic free area of Gwangyang Bay region within this year so conditions of investment in Jeonnam have improved dramatically.
④ Development project for Southern Coast Tourism Beltline
- Anticipating the marine age in the 21st century, Jeollanam-do Provincial Government has been driving 71 tourism related projects investing about 5 Trillion Won by 2010 under the far-reaching project plan entitled Rainbow. This was finalized in July 2000 in order to develop the Southern Coastline Zone covering Mokpo to Busan with the goal being a principal tourist venue in the East Asian region.
⑤ Extensive efforts in order to build up an International Maritime Resort Complex
- Jeollanam-do local government is promoting an international and competitive marine tourism complex such as Haenam Tourism Complex, relics of the maritime king Jang, Bo-go, etc. which use marine resources. Especially, Haenam Tourism Complex has been promoted to a key point of the Southwest Seat tourism with its golf course of 1540 thousand pyong, Marina, Theme park, etc.
1. Incentive - Foreign firms
① Tax reduction and exemption
- Objects : high-tech industry business, industry support services designated companies in foreigner invested zone, companies admitted in free trade zone, free customs zone and free economic zone
|National tax(corporate tax and income tax)||100% for 3~5 years and 50% for next 2 years|
|Provisional tax (acquisition tax and registration tax)||100% for 15 years|
|City/gun tax (property and integrated land tax)||100% for 5~15 years|
|Others (tariffs)||100% for 3 years to the introduced capital goods|
② Reduction and exemption for land and rent of national/public properties
- Lease period : 50 years (possible to extend)
- Reduction and exemption of rent
|objects||rate of reduction and exemption|
|Designated firms of foreigner invested zone, more than 1million dollar high-tech businesses (if tax exemption is decided), admitted into complex for foreigner firms||100%|
|More than 5 million manufacturers admitted into complex for foreigner firms, firms that contribute SOC, industrial structure and regional governments||75%|
|More than one million dollar high-tech businesses (if tax exemption is decided) admitted into national industrial complex, more than 5 million dollar general manufactures||50%|
- Requirement: more than 30% of foreigner investment rate, or a major stockholder
|Support differences for price of lots||Support up to 50 % of regular price of lots|
|Subsidy for education and training||Up to 200 million won, 500 thousand won or less per person for 6 months when 20 or more Korean nationals are trained|
|Subsidy for employment||Up to 200 million won, 500 thousand won or less per excess person when the regular employees are over 20|
|Subsidy for equipments||Up to 200 million won, within 2% of exceed amount of investments for equipments in concerned year|
|Consulting cost||After receiving investment consulting, if investment is decided, 50% of consulting cost, up to 200 million won|
|Large scaled investment firm||Support within budget (special supports) when 300 million dollar or more, or 1,500 or more regular employment|
|Development of foreigner life environment||schools, towns and accommodations only for the foreigners|
④ Cash Grants
- Methods : support regular rate(5.15%) of investment by cash, through a negotiation with investor considered the possessing of high technology of foreign investor, the effectiveness of transferring technology and appropriateness of location
- Requirement : 10 million dollar of high-tech businesses and material components industry and when more than 5 million dollar of R&D center investment firms’ factory, research institute or business place are newly built or expanded
- Usage of subsidy : purchase cost of land for factory and research center, rent, construction cost, purchase cost of raw material and research equipments, subsidy to employment and education/training
※ Subsidy and cash support cannot be overlapped to support, and foreign investor has to choose one of them.
2. Foreign Investment Zones
- Foreign Investment (general)
- Scope : Joint venture with local corporations or 100% Foreign Direct Investment (more than US$ 50 million).
- Eligible Businesses : Tourist Hotels, Recreational & Tourist Facilities, Zoo, Botanical Garden, Sports Facilities, Commercial Facilities at the Marine Center, etc.
- Designation as Foreign Investment Zone and Development
- Designation Criteria : Designate and develop the area as a FIZ where foreign investors desire to build Tourist Hotels and/or International Convention Facilities (more than US$ 30 million), or Comprehensive Tourism Facilities within the tourist resort complexes (more than US$ 50 million).
- Support for Foreign Investment Zone
Incentives on tax reduction and exemption
- Corporate Tax, Income Tax: Offer a 100% exemption for both taxes for 7 years and a 50% reduction for 3 years thereafter.
- Acquisition Tax, Registration Tax, and Property Tax: Offer a 100% exemption reduction incentives for 7 to 15 years.
> Provide a required fund for development of the Foreign Investment Zone.
> Support for basic facilities required for development of FIZ.
> Support for the purchase of a plant site that is leased by the Province
(Incentives to be differentiated in accordance with the amounts invested).
1. Gwangyang Bay Area Free Economic Zones
① Development Plan Summary
- Location : Yeosu/Suncheon/Gwangyang Cities of Jeollnam-do Province and Hadong-gun area of Gyeongsangnam-do Province
- Land Area : 88.98 ㎢
- Project Period : 2004 - 2020
- Population Target : 217,000 people or 37,000 households
- Objectives : To develop a global business center integrating production and trade businesses.
② Basic Concept
- Logistics Hub
- Building a Northeast Asian transshipment hub port
- Enticing high value-generating logistics businesses engaging in processing, assembling and manufacturing
- Component/Materials Hub
- Improving industrial competitiveness in steel and petrochemical sectors
- Encouraging automobile, shipbuilding and basic materials industries, thereby serving as a springboard to Japan and China
- Tourism/Leisure Hub
- Developing attractive tour packages by linking the National Park of Jirisan Mountains and the tourism belt on the southern coast
- Creating an international marine resort complex and a tourist destination of choice
③ Geographical Features & Investment Attributes
Strengths of the FEZ in Gwangyang Bay Area
- Ideal location for the logistics hub of Northeast Asia
- Sitting at the center of Northeast Asia, the Gwangyang area has 51 cities with more than 1 million population within a 1,200 kilometer-reach. It isc also very close to major Asian ports like Shanghai and Kobe.
- Sitting on a trunk line sea route linking Europe, Asian and North America, it is qualified for an optimum transshipment port.
- Well-managed industrial infrastructure offers easy access to the site
- Three highways and eight national roads form a vertical and horizontal network with railways, efficiently connecting Jeollanam-do to everywhere in the country.
- Twenty flights are in daily operation from and to Yeosu and Sacheon airports nearby.
- Steel and petrochemical clusters emerging in the region
- Gwangyang Steelworks, the world's largest steelmaker, boasts a production capacity of 15.80 million tons.
- Two billion dollar overseas investment has been made in China.
- Yeosu National Industrial Complex commands 56% of the Korean petrochemical market
- The centerpiece of nation's futuristic and strategic industries, such as new materials, aerospace and biotech industries
- Diverse cultural assets & rich tourism resources
- Time-honored ancient temples, such as Songgwang-sa, Seonam-sa and Ssanggye-sa.
- Hallyeo Marine National Park show-casing over 300 inhabited/uninhabited islands.
- Ample ecological resources including Seomjin-gang River and stopover habitats for migratory birds at Suncheon Bay.
Gwangyang Port, the Mega Hub Port of the Northeast Asian Region
- Currently, eight berths are in service cf) 1.08 million TEU was handled in 2003
- Eight berths will additionally be established by 2006.
- The port will emerge into one of the world's ten largest container ports by 2011, when a total of 33 berths go into service.
- Strong Points of Gwangyang Port
- Its deep water can harbor large-size inbound/outbound container vessels.
> Water Depth: An quay wall depth of 15m & a main channel depth of 20m
- An expanse of hinterland (district park) with an area of 6.6 million square meters is secured at the back of the container terminal.
> Available land area at present: 330,000㎡
- Surrounded by the natural breakwater, the port keeps a regular water temperature.
> Safe from Typhoons, tidal waves and other natural disasters
- Optimum location for transshipment as the port sits right on international trunk line routes while neighboring with major ports of China .
> The Vessel Traffic Services (VTS) System is in service to ensure safe navigation of incoming/outgoing vessels. A connected network of the Port-MIS (Port Management Information System) and the VTS system allow information-sharing on port control.
④ Incentives for Foreign Investors
- Tax Breaks
- Income/Corporate Taxes → Full exemptions for the first three years and 50 % reduction for the following two years
- Customs Duties → 100 % exemptions for imported capital goods for three years
- Acquisition/Registration Taxes → Exemptions for 15 years
- Property/Aggregate Land Taxes → Exemptions for seven to 15 years
- Eligible foreign-invested enterprises
- A foreign-invested company operating in the FEZ
> For a manufacturing/tourism business: a minimum investment amount of 10 million USD is required.
> For a logistics business: A minimum investment amount of 5 million USD is required.
- A foreign-invested company participating in the FEZ development project
> An investment of no less than 30 million USD or 50% equity participation at minimum is required while engaging in a minimum of 500 million USD development project on a turn- key basis.
|Land Purchases||Up to 50% of market value provided that the firm continues its business for 10 years at minimum|
|Employment||Up to 500,000 KRW per month in subsidy for every extra employee exceeding 20, which will not surpass 200 million KRW for an entity and six month period.|
|Job Training||A maximum of 500,000 KRW per month for a worker and 200 million KRW for a company for up to six month period will be granted for a job training course. Job trainees should number 20 at minimum.|
|Facilities||A company will be granted up to 200 million KRW for less than extra 2 % of facilities expenditure exceeding 2 billion KRW.|
|Consulting Fees||A maximum 50% of consulting fees will be subsidized, which will be 200 million KRW at maximum for individual company.|
2. Daebul Foreign Investment Zone
- Foreign investment zone designed to further develop Deabul industrial complex as the center of trade with China and Southeast Asia, upgrade the regional industrial structure by attracting foreign companies in state-of-the-art technology industries, vitalize the regional economy based on industrial development through foreign investment
- Nanjeon-ri and Nabul-ri in Samho-eup, Yeongam-gun, Jeollanam-do
- Businesses : High-tech businesses subject to tax ememption in accordance with Restriction of Special Taxation Act, advanced technology industries notified by Minister of Commerce, Industry, and Energy according to Industrial Development Act, 15 manufacturing businesses allowed to operate within Daebul national industrial complex
- Qualification : Foreign-invested companies, joint venture with more than 10% of foreign ownership, companies with foreign investment of over KRW 50 million
- Limitation : when it is deemed necessary to limit business activities with regard to maintenance and management of the industrial complex (in terms of industry and location)
Tax Credit ; Corporate tax · income tax
- businesses in high-tech industries：exemption for the first five years and 50% reduction for the following two years
- over $ 10 million of investment in manufacturing business：
> exemption for the first three years and 50% reduction for the following two years
> Exemption of acquisition tax and registration tax
> Reduction of property tax and comprehensive land tax depending on the ratio of foreign investment
- Korea Industrial Complex Corporation Support Fund
[Inquiry：Korea Industrial Complex Corporation ECO Logistics Team 02) 6300-5924]
> Industry Support Loans：up to KRW two billion, in equal installments over five years after a three-year grace period at an annual interest rate of 5%
- Others :
> Lease exemption : over a million dollar investment in high-tech businesses, industry support service industries over five million dollar investment in manufacturing businesses：75% lease reduction