2010-07 - Korea IT Times
2010-07 - Korea IT Times
2010-07 - Korea IT Times
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Investment Guide<br />
Investment Guide<br />
4. FDI Incentive - - - Continued from June issue.<br />
Exemption of Customs Tariffs etc.<br />
According to the Tax Exemptions and Exceptions Act, customs tariffs etc. shall be<br />
exempted for the following capital goods used directly in businesses subject to reduction<br />
in corporate tax or income tax, and are imported through foreign investment notification<br />
on acquisition of newly issued shares and etc.<br />
• Capital goods imported as external or internal payment vehicles invested by<br />
foreign investors to foreign-invested companies<br />
• Capital goods imported as investment objects by foreign investors<br />
Exemptions of tariffs etc. shall only apply to capital goods that have completed the<br />
import notification under the Customs Act within 3 years after the day of the foreign investment<br />
notification. However, in the case that the import notification could not be<br />
completed in the said period due to unavoidable reasons such as delays in factory establishment approval etc. the exemption shall apply<br />
for up to 3 additional years with the approval of the Ministry of Strategy and Finance.<br />
All customs tariffs, special excise tax, and value-added tax shall be exempted for industry support services vital to strengthening the<br />
international competitiveness of domestic industries, businesses that require a high level of technology, or businesses operated by foreign-invested<br />
companies in stand-alone foreign investment areas under the Foreign Investment Promotion Act. Customs tariffs shall be<br />
exempted for foreign-invested companies in complex foreign investment areas, specific companies in free trade zones, foreign-invested<br />
companies in free economic zones, businesses operated by foreign-invested companies as a development operator of the Jeju investment<br />
promotion district etc.<br />
Application Institution: Entry point customs office<br />
Required documents<br />
• Customs tariff exemption form<br />
• Copy of capital goods import items account confirmation certificate<br />
• Documentary evidence of investment in-kind or cash imported as capital goods<br />
• Documentary evidence of business subject for reduction of corporate tax etc. (tax reduction certificate)<br />
• Invoice, B/L or AWB, price declaration, packing list, certificate of origin etc.<br />
A Series Schedule<br />
1. FDI System in <strong>Korea</strong><br />
1-1 Foreign Direct Investment<br />
1-2 Foreign Investment Promotion<br />
Act<br />
1-3 Foreign Investment Promotion<br />
and Control<br />
2. FDI Procedures<br />
2-1 Foreign Investment<br />
Procedures<br />
2-2 Foreign Investment Report<br />
2-3 Post Management of Foreign<br />
Investment<br />
2-4 Forms<br />
3. Corporation Establishment<br />
4. FDI Incentive<br />
5. FDI Related Law<br />
>> Exceptions on Investment In-Kind: Investment In-Kind Completion Confirmation<br />
When foreign investors make an investment in-kind, under the commercial law, the inspector should make an inspection report<br />
on the performance of the investment in-kind and submit the report to the court.<br />
Notwithstanding such commercial law regulations, the investment in-kind completion confirmation certificate issued after the<br />
Customs Commissioner has checked the performance of investment in-kind and the type, quantity, price etc. of the object regarding<br />
capital goods invested in-kind by foreign investors, shall be considered as the inspector's inspection report according to<br />
the regulations of the Non-litigation Case Procedure Act.<br />
Hence, when a foreign investor wishes to register capital at the district court after importing capital goods to be invested in-kind,<br />
58 KOREA <strong>IT</strong> TIMES | July <strong>2010</strong>
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