Servicetype Foreign Investment Zones

It is an area designated for lease or transfer to a foreign-invested company that conducts a service business. Unlike manufacturing- oriented, complex-type Foreign Investment Zones that require large-scale sites, service-type Foreign Investment Zones, such as research facilities, are designed to support demand for moving into areas and buildings.

Procedure of Designation

The Minister of Trade, Industry and Energy submits the mayor and provincial governor's designation plan to the Foreign Investment Working Committee by reviewing whether it is suitable for the designation requirements. The mayor or the provincial governor shall attach a review report that comprehensively considers the feasibility of attracting foreign investment, the effect of regional development, the effect of increasing employment, etc., while the effect of providing financial support when submitting a plan to designate new or extended foreign investment areas as a service within the region.

Requirements for Designation

The land or building to be designated should be available for immediate occupancy and the foreign-invested company's occupancy demand for which foreign investment notification was completed should be specified. However, a certain area in a national or public property (including buildings) has been designated in advance, companies that completed foreign investment notification must account for at least 30 percent of the designated space.

Type of Businesses Eligible as Tenants

Research and development (Natural science and engineering R&D business), finance and insurance, knowledge service (industrial development business), cultural industry (Framework Act on the Promotion of Cultural Industries), tourism business (Tourism Promotion Act, except for casino business)

Occupancy Requirements

A foreign-invested company with an FDI ratio of 30 percent or more shall move into the zone only when registered until the time of the occupancy contract.

Minimum Number of Employees per Industry in service-type FIZ

Guide for Minimum Number of Employees per Industry in service-type FIZ (Criteria for employing for type of business, Criteria for FDI)
Type of business	Minimum number of employees	Criteria for FDI
R&D	5 or more researchers	The FDI amount should be equal to or more than the price of the land or building to be leased.
Finance and insurance	15 or more researchers
Knowledge service
Cultural industry
The number of employees is calculated based on the number of permanent workers and refers to the number of workers who have paid their wage & salary income tax per month under the Income Tax Act The investment requirements above the standard amount of foreign investment in individual-type FIZ prescribed by the Article 25 (1) of the Enforcement Decree of the Foreign Investment Promotion Act shall be met in case of the tourism industry.

※ Related law: Attached Table 3,4 of the Guidelines for Operation of Foreign Investment Zones

Lease

Where a services-type FIZ is a site for lease, an occupancy contract shall be made for a period not exceeding ten years in total (fifty years for research and development service business); in contrast, where a services-type FIZ is any building for lease, an occupancy contract shall be made for a period not exceeding five years in total, the occupancy contract may be renewed only once for a period not exceeding the former lease period.

Subsidization of Rents for Buildings

The state or a local government may subsidize the rent for buildings in a services-type FIZ. In such cases, the state or a local government may subsidize an amount not exceeding 50 percent of the standard rent, but the standard rent shall not include a rental security deposit.

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