There are many incentives for Foreign Direct Investment(FDI) to Korea. If you establish a company in Korea and run your business, you can take the benefits for it. Here the details are.
(1) Corporate Tax Reduction and exemption
Capital goods that a foreign-invested company brings in with a foreign or domestic means of payment it has obtained as equity investment from a foreign investor
Capital goods that a foreign investor brings in as object of investment
(1) Corporate Tax Reduction and exemption
The companies in specific cases such as when it is located in the Free Economic Zone or Foreign Investment Region, or when its business is technology compact business or the service business which support the other industries, can be applied the corporate tax reduction.
The reduction or exemption rate varies according to the cases, between 50%~100%. And it applies only to the proportion of the foreign investor's capital.
(2) Local Tax Reduction and exemption
As regards properties acquired or held by a foreign-invested company to do business(described above) subject to tax reduction or exemption, acquisition tax, registration tax, and property tax are exempted by 100% or reduced by 50%, or are deducted from the tax base during the same reduction or exemption period of corporate tax.
(3) Customs duties exemption
(2) Local Tax Reduction and exemption
As regards properties acquired or held by a foreign-invested company to do business(described above) subject to tax reduction or exemption, acquisition tax, registration tax, and property tax are exempted by 100% or reduced by 50%, or are deducted from the tax base during the same reduction or exemption period of corporate tax.
(3) Customs duties exemption
Customs duties etc. shall be exempted for the following capital goods which are used directly in the business subject to reduction or exemption of corporate tax or income tax, and are reported as foreign investment by acquisition of newly issued stocks, etc.
Capital goods that a foreign-invested company brings in with a foreign or domestic means of payment it has obtained as equity investment from a foreign investor Capital goods that a foreign investor brings in as object of investment
And there is some cases where all of the customs duties, special excise tax, and value-added tax shall be exempted according to the business type and the region.
(4) Tax support for the dividends
Tax on dividends received by a foreign investor from a foreign-invested corporation operating a business subject to tax reduction or exemption shall be reduced or exempted in proportion to a percentage of the gross income of the foreign-invested company concerned to the income derived from its business eligible for tax reduction or exemption during the period of reduction or exemption. This means that during the period for which corporate tax is exempted, the income tax on dividends is exempted, and during the period for which corporate tax is reduced by 50%, the income tax on dividends is reduced by 50%.
(4) Tax support for the dividends
Tax on dividends received by a foreign investor from a foreign-invested corporation operating a business subject to tax reduction or exemption shall be reduced or exempted in proportion to a percentage of the gross income of the foreign-invested company concerned to the income derived from its business eligible for tax reduction or exemption during the period of reduction or exemption. This means that during the period for which corporate tax is exempted, the income tax on dividends is exempted, and during the period for which corporate tax is reduced by 50%, the income tax on dividends is reduced by 50%.
