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Tax Exemption

In cases where a foreign investment meets the following requirements, the relevant investment
can be exempted from acquisition tax and property tax on real estate in accordance
with the Restriction of Special Local Taxation Act.


New growth engine industries: Technology required for a business that facilitates the enhancement of Korea’s industrial structure and international competitiveness. Companies that occupy an individual foreign investment zone


Newly installing a factory or a place of business Investment of at least USD 2 million ※ The minimum amount of investment varies depending on business type and form of the eligible company.


Acquisition tax: 100 % for ten years from opening date for business + 50 % for five years. Property tax: 100 % for five years from opening date for business + 50 % for two years. Exemption from customs duty, individual consumption tax, and value-added tax.
(under Article 121-3 of the Restriction of Special Taxation Act)
Of the two capital goods necessary for tax-exempt businesses as outlined below, capital goods imported after filing a report on foreign investment made by acquiring newly issued stocks and other methods will be exempted from the aforementioned taxes under the Restriction of Special Taxation Act:
1. Capital goods that a foreign direct invested company imports with any means of international payment or domestic payment that it has obtained as equity investment from a foreign investor; 2. Capital goods that a foreign investor imports as objects of investment. ※ Exemptions will consist of the amount calculated by multiplying the assessed tax amount by the foreign investment ratio.

Application and Determination Process for Tax Exemption

  • step1
    Application for prior confirmation of eligibility of
    the concerned business for tax exemption
    - Competent authority : Ministry of Economy and Finance
  • step2
    Report of foreign investment - Only for foreign investment made through the acquisition of newly issued stock ※ Foreign investment made by acquiring existing stocks or equity is not eligible for tax exemption. - Competent authority: Ministry of Economy and Finance
  • step3
    Application for tax exemption - Application period : By the end of the taxable year in which the concerned company
    commenced business operation
    - Documents to be submitted: One copy of foreign investment notification form,
    an application form for tax reduction or exemption,
    and evidential documents on sophisticated technology
    - Competent authority: Ministry of Economy and Finance
  • step4
    Determination on tax exemption - Consultation by relevant ministries: Ministry of Economy and Finance and
    other authorities related to the technologies applied
    ※ In cases where technical documents are insufficient or consultation between the
    relevant authorities is delayed, the authorities may request supplementary
    documents and give notice of extension of the processing period.
  • step5
    Notice of determination on tax exemption - Notice given within 20 days from the application date - Competent authority: Ministry of Economy and Finance