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Investment Procedures and Incentives

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Busan is striving to create good jobs and become a good city to work and live in. To this end, Busan is attracting high-tech industries, such as smart technology, materials and parts, as well as future industries such as green, digital, bio, and healthcare, in addition to excellent foreign educational institutions. Busan enthusiastically welcomes foreign direct investments and has prepared various benefits and support measures.

Foreign Direct Investment

The process mainly consists of 4 steps: Notification of foreign investment, remittance of investment funds, registration of incorporation to the court registry office and tax office, and registration of a foreign-investment company.

  • Notification of foreign investment

    (KOTRA or foreign exchange bank, possible immediately)

  • Remittance of investment funds

    (foreign exchange bank or carried through customs, takes 2 to 3 days)

  • Registration of incorporation

    (court registry office, takes 2 to 3 days)

  • Obtaining a license or permit

    (if necessary, time varies depending on the relevant agency, license or permit)

  • Notification of incorporation and business registration

    (tax office, takes 4 to 5 days)

  • Opening a corporate bank account

    (foreign exchange bank, possible immediately)

  • Registration of the foreign investment company

    (delegated agency where foreign investment notification was filed, takes 1day, *the entire registration process for a foreign-investment company must be completed within 60 days after payment of the investment is completed)

*Note: In the case of a capital increase, after notifying of foreign investment and remittance of the investment funds, register a capital increase (court registry office, takes 2 to 3 days), and register the change as a foreign-investment company (initially delegated agency, takes 1 day).

Investment Incentives

Investment Incentives table
Tax Support Corporate tax/income tax reduction or exemption
*Only if the application was done before December 31, 2018
Local tax (acquisition tax, property tax) reduction or exemption
Exemption from tariffs, etc.
Income tax for foreign engineers can be reduced for 10 years,
and a flat tax rate (19%) can be applied to foreign workers for 20 years
Cash Grant Land purchase costs
Rent
Support for employment subsidies and education and training grants
Location Support Rental site support
Subsidy for the difference in sales price
Assistance for rent reduction or exemption
Other support

Investment Incentive Requirements and Details

Investment Incentive Requirements and Details table
Features Requirements Tax reduction or exemption
Tax reduction or exemption New growth engines and original technologies in an accompanying industry
  • Technologies and materials directly related to new growth engines and original technologies
    • Set up and operate factory facilities such as production processes (over $2M) to operate related technology accompanying businesses
  • Income tax, corporate tax: 100% reduction for 5 years, 50% reduction for the next 2 years (if applied before December 31, 2018)
  • Acquisition tax (for 15 years), property tax (for 10 years): Exempted up to 100%
  • Tariffs, VAT, individual consumption tax: 100% reduction for 5 years
Foreign Investment Zone
  • Individual-type
    • Manufacturing: Over $30M / Tourism, leisure, MICE: Over $20M
    • Logistics: Over $10M / R&D Center: Over $20M
  • Complex-type
    • Manufacturing: Over $10M / Logistics: Over $5M
  • Income tax, corporate tax: 100% reduction for 5 years, 50% reduction for the next 2 years (if applied before December 31, 2018)
  • Acquisition tax (for 15 years), property tax (for 10 years): Exempted up to 100%
  • Tariffs, VAT, individual consumption tax: 100% reduction for 5 years
Free Economic Zone
  • Manufacturing, tourism and leisure, MICE: Over $10M
  • Logistics, medical institutions: Over $5M
  • R&D Center: Over $1M (over 10 researchers)
Location Support
  • Foreign investment ratio of 30% or more
  • When conditions such as business/industry category, other eligibility qualifications, and limits are met
  • Rent reduction
  • Infrastructure support
Cash Grant
  • Foreign investment ratio of 30% or more
  • Manufacturing: Companies specializing in parts and materials, new growth engines and original technology accompanying projects
  • R&D Centers: Construction of new R&D facilities (5 or more researchers)
  • Decision after evaluation and consultation

The cash grant is a system that supports part of the business costs in cash, for companies which operate in a new growth engine technology accompanying industry, high technology and high-tech product industry, and parts and materials industries, or create large-scale employment, or set up R&D centers or regional headquarters, through examination and negotiation when certain requirements related to the company's economic contributions and business details are met.

*Note: If a company's foreign investment ratio is over 30% and, foreign investment was done through the acquisition of newly issued stocks (including reinvestment of undisposed retained earnings), the company is eligible to apply for cash assistance. However, if foreign investment was based on long-term loans, the company is not eligible.

Cash Grant Procedure

Application forms are submitted to the Ministry of Trade, Industry and Energy (Foreign Investment Promotion Center) through support from the KOTRA Investment Promotion Office, Invest KOREA or local government, and Invest KOREA's Foreign Investment Cash Assistance Center and PM provides consultation and support on eligible requirements, applications and screening procedures.

  • 1 Apply for cash grant

    • [Application] Investors (companies)

      Submission of applications and investment plans

    • [Reception] Ministry of Trade, Industry and Energy

      Designation of a negotiator

    • [Support] KOTRA

      Designation of PM and application for cash grant

  • 2 Screening

    • Pre-evaluation Committee (only if undisposed retained earnings are reinvested) and Evaluation Committee

      Formation of the Evaluation (Pre-evaluation) Committee and Evaluation

  • 3 Cash grant amount calculation

    • Cash Grant Calculation Committee

      Formation of the CalculationCommittee and Evaluation

  • 4 Proposal form (preparation of a negotiation plan)

    • Ministry of Trade, Industry and Energy- Local Government- Ministry of Strategy and Finance

      Drafting a proposal (negotiation plan) and submitting it to the Foreign Investment Committee

  • 5 Deliberation and resolution

    • Foreign Investment Committee

      Decision on whether to pay in cash or not

  • 6 Signing of contract

    • Ministry of Trade, Industry and Energy Local Government Investors

      Transferring cash grant funds after signing a cash grant contract (temporary or installment payments are possible)

  • 7 Follow-up management

    • Ministry of Trade, Industry and Energy, Local Government, KOTRA

      Checking on investment execution and expenditure results, and review of details of cash grant contracts implementation