- Korea Free Trade Zones (FTZs) are designated areas in Korea that offer tax incentives, streamlined customs procedures, and other benefits to companies engaged in international trade. These zones are designed to attract foreign investment, promote economic development, and enhance Korea’s competitiveness in the global marketplace.
- There are currently eight FTZs in Korea, located in Incheon, Busan, Gwangyang Bay, Yellow Sea, Daegu-Gyeongbuk, East Coast, Chungbuk, and Jeju. Each zone has its own unique characteristics and advantages and is strategically located to take advantage of Korea’s transportation and logistics infrastructure.
- Tetra Consultants is a team of experienced lawyers, chartered accountants, and qualified business experts who assist international clients with setting up a company in Korea free trade zones. We provide continuous support from the process to register the company in the Korea Free Trade Zone, and corporate bank account opening to the final step of securing a relevant license to ensure the smooth functioning of the entity. If you are planning to set up a company in a Korea free trade zone, Tetra Consultants’ team of experts through this article has provided the 4 important things to know before you advance to expand your entity in Korea Free Trade Zone.
4 Things To Know About Korea Free Trade Zone in 2023
Benefits of forming a company in the Korea free trade zone: Some of the key benefits of operating in a Korea FTZ include:
- Tax incentives: Companies operating in a Korea FTZ are eligible for various tax incentives, such as reduced corporate income tax rates and exemptions from value-added tax and customs duties.
- Streamlined customs procedures: Companies in a Korea FTZ can benefit from streamlined customs procedures, including simplified clearance processes and faster processing times.
- Access to world-class infrastructure: Korea’s FTZs are strategically located near major transportation hubs, ports, and logistics centers, providing easy access to global markets.
- Support services: Korea’s FTZs offer a range of support services to help companies succeed, including logistics and distribution services, consulting services, and training programs.
- Attractive investment environment: Korea’s FTZs are designed to attract foreign investment, with a business-friendly environment, strong legal protections, and access to a highly skilled workforce.
- Some of the industries that are particularly well-suited for operating in Korea’s FTZs include logistics, electronics, automotive, and biotechnology. Overall, Korea’s FTZs offer a range of advantages to companies engaged in international trade, making them an attractive location for foreign investors seeking to expand their presence in the Korean market and beyond.
Reliable regulatory body: The regulatory body for Korea’s Free Trade Zones (FTZs) is the Korea Free Trade Zone Authority (KFTZA). The KFTZA is a government agency that oversees the development and operation of Korea’s FTZs and is responsible for promoting investment and economic development in these zones. Some of the key responsibilities of the KFTZA include.
- Establishing policies and regulations for the development and operation of Korea’s FTZs.
- Promoting investment in Korea’s FTZs and attracting foreign companies to these zones.
- Providing support services to companies operating in Korea’s FTZs, such as logistics and distribution services, consulting services, and training programs.
- Ensuring compliance with relevant laws and regulations, and enforcing penalties for violations.
- Collaborating with other government agencies and private sector organizations to promote the development of Korea’s FTZs.
- Overall, the KFTZA plays a crucial role in the development and success of Korea’s FTZs, providing a range of support services and regulatory oversight to help companies thrive in these zones.
Requirements for forming a company in Korea Free Trade Zone Authority (KFTZA): The requirements for forming a company in Korea’s Free Trade Zones (FTZs) vary depending on the type of company and the specific FTZ. However, here are some general requirements to keep in mind:
- Investment registration: Companies planning to invest in Korea’s FTZs must register their investment with the Korean government. The investment registration process typically involves submitting an application to the appropriate government agency, along with a business plan and other required documents.
- Company registration: Once the investment registration is complete, the company must register with the Korean government. This involves submitting an application and providing a range of documents, such as the company’s articles of incorporation, business plan, and identification documents for the company’s officers and shareholders.
- Minimum capital requirement: There is no specific minimum capital requirement for companies operating in Korea’s FTZs, but companies must demonstrate that they have sufficient capital to carry out their planned business activities.
- Compliance with laws and regulations: Companies operating in Korea’s FTZs must comply with all relevant laws and regulations, including labor laws, environmental laws, and tax laws.
- Hiring requirements: Companies operating in Korea’s FTZs must comply with Korean labor laws, including requirements related to minimum wages, working hours, and working conditions. If the company plans to hire foreign workers, it must comply with Korean immigration laws and obtain the necessary visas and work permits.
- Licensing and permits: Depending on the type of business activities, companies operating in Korea’s FTZs may need to obtain additional licenses and permits from various government agencies.
- Operating requirements: Companies operating in Korea’s FTZs must comply with the rules and regulations of the specific FTZ in which they are located. This may include requirements related to land use, building codes, and environmental regulations.
Incentives offered in Korea Free Trade Zone: Korea’s Free Trade Zones (FTZs) offer a range of incentives to attract foreign investment and promote economic development. Some of the key incentives include:
- Tax incentives: Companies operating in Korea’s FTZs are eligible for various tax incentives, such as reduced corporate income tax rates and exemptions from customs duties and value-added tax (VAT) on imported goods.
- Simplified customs procedures: Companies operating in Korea’s FTZs can take advantage of simplified customs procedures, including faster customs clearance times and simplified documentation requirements.
- Infrastructure support: Korea’s government has invested heavily in infrastructure development in the FTZs, including building new roads, bridges, and ports, as well as providing access to high-speed internet and other advanced technologies.
- Regulatory flexibility: Companies operating in Korea’s FTZs enjoy greater regulatory flexibility and fewer bureaucratic hurdles compared to other parts of Korea. For example, they may be able to operate outside of certain regulations and standards that apply to companies operating elsewhere in Korea.
- Business support services: Korea’s government and private sector organizations provide a range of business support services to companies operating in the FTZs, such as consulting services, logistics support, and access to business networks and resources.
- Special economic zones: Korea’s government has designated certain areas within the FTZs as Special Economic Zones (SEZs), which offer additional incentives and benefits to companies operating in these areas. For example, SEZs may offer further tax incentives and reduced land costs.
Considering company registration in Korea Free Trade Zone?
- Through this guide, we can see the benefits of setting up a company in the Korea Free Trade Zone and understand the steps we need to undertake to successfully complete the incorporation process. We at Tetra Consultants are well-experienced with the incorporation process and would like to offer you our services IN Korea Free Trade Zone. Our service package includes the planning and strategizing process, the registration process, and ensuring that the newly incorporated firm remains compliant with government policies.
- Contact us for more information about the Korea Free Trade Zone and the incorporation process and our team will revert to you within the next 24 hours.