Cash Grant
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Cash Grants
A form of financial incentives provided to fund corporate capital expenditure for an individual entity making foreign direct investment (FDI) that may give significant impact on economy.
Cash Grants
| Target |
① A company making greenfield investment in the new growth industries
(Enforcement Decree of the Restriction of Special Taxation Act: Addenda 7) ② A company making greenfield investment in manufacturers producing components-materials (Act on Special Measurers for the Promotion of Specialized Enterprises, etc. for Materials and Components: Addenda 1) ③ A company which builds out or newly establishes its production (office) facility, creating jobs on a large scale (more than 50-300 employees by each business category) ④ A company which builds out or newly establishes its research facility; a dedicated lab space or a non-profit R&D institute financed by foreign investors ⑤ A company mobilizing large scale financing, influencing more effectively on the economy for the investments. |
|---|---|
| Requirement | Share of FDI involving acquiring ownership of a business’ assets : over 30% |
| Coverage | Maximum limit on the total amount of grants will be provided after negotiation with investors. |
| Purpose | Government funds covering business expenses to buy or lease commercial space, or to purchase capital goods, or to form infrastructure, or to hire new employees or run HR training courses. (Article 20-2 of Enforcement Rules of the Foreign Investment Promotion Act) |
| Mandatory Obligation | In case of non-compliance with the contractual obligations or any forms of breach of the contractual requirements, corresponding remedies such as reduction, withdrawal of the funds or extension of the period for fulfilling mandatory commitments will be enforced. (Article 17 of Cash Grants Management Code) |
Financial Aids
| Type | Requirement | Scope and Coverage |
|---|---|---|
| Hiring Incentives | In case that a company hires 20 or more than 20 new full-time employees | KRW 1mln per 1 personnel newly employed within 6 month |
| HR training costs | In case that a company hires 20 or more than 20 new full-time employees | KRW 1mln per 1 personnel newly employed within 6 month |