Jeju-island at a Glance
|Location||South-east of the mainland of South Korea|
1,848.2 km2 (3 times bigger than Singapore, 1.7 times bigger than Hong Kong)
Farm land: 29.3%, Forest and fields : 48.9%, Others: 21.8%
|Administrative Areas||2 Cities, 43 eup·myeon·dong, 556 natural villages|
Average Rainfall : 1,800mm
Average Temperature : 15.5℃ (The highest 34℃ and the lowest -1.8℃)
1. Jeju is a free International City with No visa and No Tax.
- The government of the Republic of Korea has designated Jeju as an International Free City on April 2002.
- More than 35.3 trillion Won worth of investments will be allocated for the tourism industry by 2011.
- For domestic and foreign investors, various incentives, including tax exemption will be provided.
2. Key point of Northeast Asia, the center of Korea, Japan and China
- Jeju is within 2-hour flight distance of 18 cities which have a population of more than 5 million.
- 5 cities with more than 10 million in population: Seoul, Tokyo, Beijing, Shanghai and Tianjin
- 13 cities with more than 5 million in population: Osaka, Taipei, Dalian, Shenyang, Hangzhou, Suzhou, Yantai, Qingdao, Nantong, Ningbo, Wenzhou, Nanjing, and Jinan
- 23 domestic and foreign daily nonstop flight services
- Domestic lines: 1a airlines, 237 times; Foreign lines: 12 airlines, 38 times
3. Island of Peace with heaven-blessed natural environment and unique island culture
- Jeju has 137 registered cultural properties and 1,800 kinds of native plants.
- Jeju Volcanic Island and Lava Tubes were listed as a World Heritage site by UNESCO on June 27, 2007.
- This is the first Korean natural heritage site on the list.
- Designated as a Healthy City by WHO (the World Health Organization) on July 12. 2005
- It is also designated by the Korean government as an Island of Peace on January 26, 2005.
- Jeju Island is the world leaders' favorite vacation destination visited by Clinton (USA), Gorbachev (Russia), Jang Xumin (China), and Koizumi (Japan).
- Jeju Island is a Biosphere Reserve designated by UNESCO on December 16, 2002.
4. Various facilities for tourists
- Accommodation: 50 tourist hotels, 30 condominiums, 41 resort pensions and 80 general hotels
- Convention center (with a capacity of 4,300 seats): used for holding international conferences, including ADB, PATA, ASTA, UCLG and World Scout General Meeting.
- 7 duty free shops for locals and foreigners (4 for the locals and 3 for foreigners), casinos for foreigners (8), golf courses (36)
5. More than 6,000 students graduate from Jeju universities annually.
6. Great expansion of SOC including airport and port by 2011
- International airport capacity: from 11,270,000 passengers to 23,030,000 passengers by 2011
※ Conduct a feasibility study for the second airport by 2008.
- Berth in Jeju Port: 2,551 m->3,361 M/ up to 80,000 tons of ship
- Road expansion and establishment: 588 km expansion/71 km newly-established road
- Power supply: from 145,000 KW to 245,000 KW
- Sewage disposal: 67% ->90%
1. Investment Promotion Zone
- Article 217 of Special Act on Establishment of Jeju Special Self-Governing Province and International Free City
- The Jeju Investment Promotion Zone is a special policy to develop core industries of International Free City in Jeju Special Self-Governing Province. It allows various tax benefits including tax exemption for both locals and foreigners, and tax exemptions for national or public properties.
- An area that an investor wants to invest in (Individual)
- If an investor wants to designate investment promotion district, he or she has to appoint a developer. Approval for the development plant, its confirmation, admission and notification must be received in accordance with individual ordinance.
- An area that has location advantage for investment promotion and satisfies the following conditions :
- Area confirmed as an amusement park facility in accordance with 'Act for National Land Planning.'
- The corporation/enterprise which intends to develop the project shall be authorized by the national government, local government, local public agency or development center.
- Has to acquire an ownership or a right of use for more than two- thirds of the land.
- Tourism Industry (Article 2 of Enforcement Decree of Tourism Promotion Act)
- Tourist hotel, marine tourism hotel, Korean traditional hotel, general (except for golf course), ferry, performing place, amusement park, international conference facility
- Cultural Industry (Article 2.1 of Cultural Industry Promotion Act)
- Industries related to culture, music/video/games, print/ publication/ periodical publication, broadcasting, cultural asset, animation/character/edutainment/mobile-cultural contents/design (except industrial design), advertising/play/arts/applied arts
- Management of Welfare Facility for The Aged (Article 31 of Old Age Welfare Law)
- For the senior citizens, welfare facility, medical center, recreational facility and care center
- Management of Youth Training Facility
- Youth training facilities: youth training center, youth culture house, youth specialized facility, youth camp, youth hostel
- Other facilities for youth: used for healthy activities other than training
- Cable Cars and Track Business
- Cable car: transport of freights using a cable car hung in midair
- Track: transport of freights by track installed on land
- Electricity-producing enterprise utilizing new energy and renewable energy (Article 2.1 of New and Renewable Energy Development, Usage and Distribution Promotion Act)
- Bio energy, wind power, water power, fuel cell, gas energy, marine energy, waste energy, land heat energy and hydrogen energy
- Foreign Educational Institution (Article 182 of Special Act on Establishment of Jeju Special Self-Governing Province and International Free City)
- Foreign educational institution, free school and international school
- Medical Institutions (Article 192 of the Special Act on Jeju Special Self-Governing Province and Jeju Free International City)
- General hospitals, clinics, nursing homes, and dental clinics founded by a foreign-owned body corporate within the province.
- General hospitals, clinics, nursing homes, dental clinics and traditional oriental clinics founded by Korean nationals
- Educational Center (Training Center)
- Annexed list No. 10.B of Enforcement Decree of Construction Act
- Industry using Advanced Technology (Article 5 of Industry Development Act)
- The Minister of Industry, Commerce and Energy announces the scope of the products with consideration of ripple effects among industries, value added creation and contribution to improve industrial structure in the fields of electricity, electronics, information technology, new materials, and bio-science.
- Health and Medical Industry (Article 2 of Health and Medical Technology Promotion Act)
- Research and development of health and medical technology.
- R&D service business that provides support to research and development for health and medical technology through information, consulting, examination and analysis.
- Locals and foreigners who invest US$ 5 million or more
※ Investment includes land purchasing, construction cost, survey/investigation cost, installation fee and equipment purchasing.
Procedure for Designation
- Submit a plan (investor) ⇒ collect and reflect opinions from citizens and experts ⇒ formulate designation plan (promotion bureau of international free city) ⇒ deliberation by international free city committee (chairman: the governor of the province) ⇒ designation and announcement (promotion bureau of international free
- National tax
- Corporation and income tax : exempted for three years, 50% reduction for the next two years
- Customs : exempted for the capital goods imported within the initial three years
- Local tax
- Acquisition and registration tax : exempted
- Property tax : exempted for 10 years
- Other charges
- Exemption : development fee, usage fee for publicly-owned sea or water
- 50% reduction : farm land development charge, alternative green establishment fee, alternative forest resource establishment fee
Lease of nation or publicly-owned land
- Article 220 of Special Act on Establishment of Jeju Special Self-Governing Province and International Free City
- Lease Period
- within 50 years (renewable), and it is possible to build permanent facilities
- up to 75% for the companies which relocated in the investment promotion zone
- Financial Assistance Provided Under the「Jeju Special Self-Governing Province Investment Promotion Ordinance」
2. Foreign Investor Support System [ Foreign Investment Zone ]
- Article 18 of Foreign Investment Promotion Act and Article 25 of Enforcement Decree of the Act, Guidelines for Foreign Investment Zone Management
- To promote foreign investments which contribute to national economy development and to provide administrative and financial support to foreign investors.
- 'Foreigner' shall refer to an individual of foreign nationality.
> A national of the Republic of Korea who lives in a foreign country having that nation's permanent residence right shall be included in the term of foreigner.
- 'Foreign Corporation' shall refer to a corporation established in accordance with foreign law.
- 'International Economic Cooperative Organization'
> An organization which serves foreign government's economic cooperative affairs.
> International financial agencies which include IFC (International Finance Corporation), IBRD (International Bank for Reconstruction and Development) and ADB (Asian Development Bank)
> International organizations which handle foreign investments
- Foreign Investor
- 'Foreign Investor' shall refer to a foreigner who is in possession of stocks under certain conditions.
- Foreign-capital invested company
- 'Foreign-capital invested company' shall refer to profit or nonprofit corporation that a foreign investor has financed.
- 'Foreign Direct Investment'
When a foreigner purchases stocks or stakes of a Korean corporation or a company run by a national of the Republic of Korea, and the amount of foreign investment is KRW 50 million or more.
- A foreigner acquires the total stocks or stakes issued by a Korean corporation or a company run by a national of Republic of Korea or 10% or more of the total amount of investment.
- A foreigner acquires stocks or stakes of a Korean corporation or a company run by a national of Republic of Korea and includes the following contracts:
1. contract to dispatch or appoint an executive
2. contract to deliver/purchase goods or raw material for more than one year
3. contract to provide/introduce technology or joint R&D
② Subject to Designation and Standard
(1) Complex Type of Foreign Investment Zone
〔 Definition 〕
- Among national or local industrial complexes under the 'Act on Industrial Site and Development', a zone is designated in order to lease or sell for the purpose of generating small- and medium-sized foreign invested companies.
〔 Requirements 〕
〔 Eligible Business 〕
- Business using highly-advanced technology under the Foreign Investment Promotion Act
- Hi-tech industry under the Industry Development Act
- Industry appointed by management agency for the region's industrial characteristic/ specialization
- Annexed research center and R&D industry
- Multi-purpose freight terminal and shipping industry
〔 The Priority Order for Foreign Investment Zone 〕
1. A company with 30% or more of total shares (investment) which has voting rights, and KRW 50 million or more worth of foreign investment.
2. A company registered as a foreign invested company until the time when it relocates into the zone.
3. In case of establishing new facilities or equipment on existing building or establishing a new factory facility.
4. When a corporation which has existing factory establishes a factory, facility, or equipment on separate accounts.
〔 Management and Consignment of Investment Zone 〕
- In principle, management for the zone shall be handled by the management agency (the mayor or the governor of province). However, it is possible to entrust management to Korea Industrial Complex Corporation for efficient management.
- If the management is entrusted to Korea Industrial Complex Corporation, it shall handle the following matters:
- appointment of companies to move in, concluding contracts with companies to move in, charge of rents or security deposit, decision for tax exemption and asset management
(2) Individual Foreign Investment Zone
〔 Definition 〕
- A zone designated by unit for foreign invested company's workplace. This zone is designed according to the foreign investors' preference (region, time and incentive) to induce/generate large-scale foreign investment.
〔 Requirements 〕
|US$ 30 million
|US$ 20 million
|US$ 10 million
|US$ 2 million
〔 Other Requirements 〕
- The investment completed before the individual foreign investment zone is designated shall be exempted from the foreign investment. However, land must be purchased in order to be designated as a foreign investment zone.
- If two or more foreign investors wish to obtain foreign investment zone from the mayor or the governor of province, those investors shall conclude a contract for execution of investment plan and performance of duties.
- "Full-time employment" and "newly established factory" shall be appropriate for the provision of Article 23 of the Guidelines on Foreign Investment Zone.
(3) Procedure for Designation of Foreign Investment Zone (FIZ)
- Foreign investor submits a plan for FIZ ⇒ mayor or governor of province (establishment of FIZ designation plan) ⇒ request for deliberation of FIZ (local government → MOCIE) ⇒ investment policy team in MOICE (foreign investment practice committee, the president: vice-minister of MOICE) ⇒ economy cooperative department in the Ministry of Finance and Economy (foreign investment committee, the president: the Minister of Finance and Economy)⇒ designation and appointment of FIZ
(1) Tax exemption
- National tax
- Corporate and income taxes : exempted for five years and 50% tax reduction for the next two years
- Tariff on capital goods introduced within three years: exempted
- Local tax
- Acquisition and registration taxes : exempted
- Property tax : exempted for 15 years
(2) Lease of National or Publicly-Owned Properties
- Basis : Article 13 of Foreign Investment Promotion Act and Article 19 of Enforcement Decree of the Act
- Lease period : within 50 years (renewable), and it is possible to build a permanent facility
- Rents: land price x 1% or more of premium rate
- Subject to exemption
- Foreign investment zone (individual and complex), national industrial complex, local industrial complex, city hi-tech industrial complex and agro-industrial complex under the Act on Industrial Site and Development
- Standard of Exemption
- 100% exemption : a foreign invested company in individual FIZ and a foreign invested company in complex type of FIZ with more than US$ 1 million worth of business using highly-advanced technologies
- 75% exemption : manufacturing in complex type of FIZ with more than US$ 5 million investment and a business which is selected after foreign investment committee's deliberation and contributes to expansion of SOC, arrangement of industrial structure, and local government's independence on finances
- 50% exemption: lands in national industrial complex, local industrial complex, city hi-tech industrial complex and agro-industrial complex
(3) Support under 'Standard of National Financial Aid for Foreign Investment Promotion Activities by Local Governments'
- Concerned Authority : Ministry of Industry, Commerce and Energy
- Purpose and Background
- To prescribe the matters which are necessary for the nation to provide financial funds/support in order to promote foreign investment by local governments under the provisions of Article 14.2 of Foreign Investment Promotion Act and Article 20.1 of Enforcement Decree of the Act.
- Eligible Foreign Investment
- The nation's financial support for local government shall be provided in case that the local government has attracted foreign investment whose foreign national is the largest stockholder, or whose ratio is 30% or more.
- The amount of financial support shall be up to 50% of foreign investment (FDI).
- Subsidies and Allotment Ratio (nation: local government)
〔 Industrial Site Subsidy (75:25) 〕
- the purchase of land to be rented to any foreign invested company
- rents of foreign invested companies and differences on lot prices
- funds spent to establish and develop the foreign investment zone
> road, water facility, gas, electricity, waste water treatment facility
〔 Education and Training Subsidies (50:50) 〕
- One million Won ~ 5 million Won per person exceeding 20 within six months when 20 or more Korea nationals are employed and trained in case of new factory establishment.
- Application for the subsidy shall be made in the following year when new employment is established, and subsidies shall be paid for five years after the foreign invested company registration.
〔 Support for International School (50:50) 〕
- The international school which obtained approval for its establishment pays as much as the local government pays.
- In case of supporting operation cost for international school established within 10 years or less, the support is as much as the local government provides.
- High-tech Science Technology Complex
- Location : Aradong, Jeju City
- Area : 1,096,000m2 (270.8acre)
- Business Period : 2003~2011
- Development Cost : 427.4 million USD
- Facilities : High-tech industries including IT·BT, national policy research institute, general support center
- Progress : started construction June 2005, land for sale in the second half of 2006