[Brochure] Saemangeum Investment Guide (2016)

English version

Hub of Asia, Heart of Future sAemAngeum

Saemangeum Investment Guide

(30064) 31 Dasom 1-ro, Sejong-si, Republic of Korea

T. +82-44-415-1000 F. +82-44-415-1251

www.saemangeum.go.kr

January 2016

0302 Saemangeum Investment GuideHub of Asia, Heart of FutureSaemangeum Development and Investment Agency

Saemangeum opens new values to NEA's economy.

As the global free trade hub, Saemangeum sets new standards

for industry, tourism and leisure, and eco-environment.

The land of hope and opportunities.

Find new possibilities in SAEmANgEum.

World’s Longest Sea Wall

33.9billion uSD bil. uSDbil. uSD㎞

Project CostTwo thirds of Seoul

Contents Location 04 • Development strategy 06 • Land use plan 08 • Infrastructure 09

Site overview 10 • Investment Status : Industrial complex 11 • FAQs 12 • Investment procedures 18

Big market

City of New Possibilities

Hub of Asia, Heart of Future

㎢ billion people409 22 1 5


gimpo International Airport

Seoul

180㎞

Russia

CHiNa

TaiWaN

JaPaN

KOREa

250㎞

Busan Port

SAEmANgEum

saemangeum

Suwon

Vladivostok

Dalian

Beijing

Tianjin

Yantai

Tsinan Qingdao

NanjingShanghai

Hong Kong

Taipei

Osaka

Seoul

Tokyo

Cheonan

Daejeon

ulsan

Daegu

gwangjuJinju

Cheongju International Airport

Daegu International Airport

gimhae International Airport muan International Airport

90-minute distance to muan International Airport

Incheon International Airport

gunsan Airport

•Less then three-hour distance from major cities of Korea such as Seoul, Incheon and Busan

•Easily accessible through interconnected transportation system

•Strategically situated at the center of west coast industrial belt and tourism belt, laying the foundation for Korea's creative economy

Center of Korean Economy

1hr

2hr

Location

•Strategic location at the heart of North East Asia with easy access to huge markets(China, Japan, etc.)

•Perfect base for global businesses to advance into China thanks to close proximity to Chinese economic zones.

•Profound understanding on and support for international cooperation as well as global free trade.

Economic Heart of North East Asia

Adjacent to major global markets including China, Japan and Russia

Easily accessible within three hours from major economic bases in Korea

Global Free Trade Hub


Development Strategy

Phased Development Development Strategies Saemangeum project is divided into 3 phases. First, we aim to materialize investment conditions as well as developing land for China-Korea Economic Cooperation Complex by 2017. Second, the following four years will be focused on private investment promotion. Lastly, we plan to finalize internal development by introducing global standards.

Saemangeum is developing world-class business environment in order to become a global open city. Here are our significant development strategies that will realize our vision.

Initiation and Visualization

expansion of Private Investmant

Internal Development Promotion

City of New Possibilities

~ 2017

2018 ~ 2022

2023 ~

Phase1

Phase2

Phase3 5 goals of saemangeum Project

attractive Investment environmentInternational Cooperation for Economic Cooperation Complex development, and introduction of tailor-made incentives and deregulation.

Consumer-oriented CityFlexible development plan guaranteed for changing conditions and demands.(open-planning)

Comfortable & eco-friendly CityEco-friendly waterfront city with premium global living standards.

City of Deregulation

and Incentives

Tailor-made Open Plan City

Vibrant green Waterfront City

Premium City for Living & exchange

International economic

Cooperation Hub


Land use plan Infrastructure

Various and Flexible Use of Land Well-connected Transport Systemglobal corporations are higly concerned with transportation and logistics. Saemangeum, the business hub of NEA, is well

equipped with transportation network and various distribution channels including New Saemangeum Port. major cities with

more than a million population are now easily accessible within a half business day from Saemangeum.

Industry & Research (41.7㎢)

•Cluster of major industries, new growth engine industries, and ralated research facilities.

International Cooperation

(52.0㎢)

•Industry, logistics, intelligence and technological innovation international cooperation and cultural tourism, and urban service

•Prior development of economic cooperation complex through international cooperation

Leisure & Tourism (36.8㎢)

•Building large-scale leisure and tourism complex through attraction of global tourism capital

• Integration of various leisure function for global tourism marketing

agro-bio (94.3㎢) •Cutting-edge agricultural area

Residential(urban) (10㎢) •Premium waterfront area

eco-environment (42.0㎢) •Environmental protection natural and ecological sites

6 Function areas ground

Water air

Dynamic and flexible business strategy is the key to winning out ever-growing global competition.

Saemangeum ensures flexible and autonomous use of land to guarantee developers’ success as well as multifunctional uses.

Planned guidelines for

Land use

Flexibility

Set minimum and maximum range for land size according to function and usage

autonomy

Developer's own decisions on locations are allowed to the extent of links between individual businesses.

multipurpose

Multipurpose land usage is allowed within a certain range for complex development of various functions.

3x3 internal road network connecting to nationwide expressway

east-West 2nd axis Road(4lanes, 20.4㎞)From New Saemangeum Port(West point) to Jeonju and all the way to Pohang(East point)

north-south 2nd axis Road(6~8 lanes, 26.7㎞)From Saemangeum industrial complex to Leisure & Tourism area

saemangeum-Jeonju expressway

new saemangeum Port-Daeya Railway

■ Industry & Research

■ International Cooperation

■ Leisure & Tourism

■ Agro-bio

■ Residential (urban)

■ Eco-environment

new saemangeum Port 18 berths covering 5㎢ to be constructed by 2030. Early introduction of 4 berths by 2020.

gunsan Port 30berths with annual volume of 200,000-TEu.

Airport area(6㎢) secured for international flights in Saemangeum. Currently gunsan Airport is the closest airport to Saemangeum. muan international airport is 90min-away, and Cheongju international airport 120 minutes.

east-West 1st axis

east-West 2nd axissaemangeum-Jeonju

expressway

east-West 3rd axis

north-south 1st axis

New Saemangeum Port Station

Namgunsan Station

Daeya Station

Janghang Line (planned)

gunjang Industrial Complex Railroad (under design

and construction)

Iksan Station

Saemangeum Station

gunsan Airport Station

north-south 2nd axis

saemangeum-Daeya double-track railway

north-south 3rd axis

seohaean expressway

Honam High speed Railway (KTX)


Site overview Investment Status : Industrial complex

Shinsi-Yami District

gogunsan Islands District

Leisure & Tourism Zone 1

Leisure & Tourism Zone 2

③ International Cooperation area

Development in ProgressParts of Industry & Research Area and Tourism & Leisure area are currently transforming into a strategic hub of high-tech industries, R&D, and logistics, while Shinsi-Yami District is already available for immediate development.

Favorable Choice for Global CompaniesFuture is for those who prepare and act first. Already a number of global companies have joined Saemageum for brighter future, which has developed strong ties with China, the rising world economic center.

④ Leisure & Tourism area

•Project Developer : (Zone1- 1.1㎢ out of 9.9㎢) Jeonbuk Development Corp. (Zone2 - 21.7㎢) TBD•Development status : Prior development of 1.1㎢

from Zone 1

•Project Developer : TBD•International business, industrial logistics, cultural

tourism, etc.

gogunsan Link Road

•To connect four islands•Project cost : 340 million uSD•Area : combined length of 8.77㎞/width of 15.5m

(under construction)•Construction period : 2007 to 2017

② shinsi-Yami District

•Project developer being determined (1.9㎢ available for immediate use)

1

23 5

4

① Industry & Research area

•Project Developer : Korea Rural Community Corp.•Developmental status : Reclamation and

infrastructure underway (industrial complex 18.7㎢)

⑤ agro-bio area

•Project Developer : Korea Rural Community Corp.•Development status : (Lot 5- 15.13㎢) under

construction (Lot 2·6 - 20.6㎢) under reclamation

Investment amount : 103 million uSDno. of employees : 80area : 69,934㎡ Business : High-disperse silica (for eco-friendly tires)Construction period : April 2015 to June 2016

Investment amount : 1.9 billion uSDno. of employees : 2,000area : 571,352㎡

Business : Poly silicon (for solar energy)Construction period• 1st construction stage to be completed

by 2019• 2nd construction stage to be completed

after 2019 (units 3, 4 and 5)

Investment amount : 258 million uSDno. of employees : 150area : 215,000㎡

Business : PPS resin (components for electronic and electric goods)Construction period• December 2013 to February 2016

Investment amount : 2.4 million uSDno. of employees : 11area : 6,612㎡

Business : Heat exchangers and tanksConstruction period• march 2015 to August 2015

Investment amount : 820 million uSDno. of employees : 100area : 165,000㎡

Business : Cogeneration plant (heat and steam)Construction period• December 2013 to march 2016

solvay (Lot 2)

OCI (Lot 1)

Toray (Lot 2)

eCs (Lot 2)

OCIse (Lot 2)

<Development status> <Testimonials>


Join Saemangeum for Brighter Future

a. Highly accessible from major transportation hubs.

a. 1. geographical advantage Saemangeum is located in proximity to huge global markets like China, Japan and Russia, and can easily access major cities with over 1 million population within 3 hours.

2. Industry Cluster Adjacent to numerous national industrial complexes as well as colleges and research institutes, allowing synergy effects through clustering and collaboration.

3 new Territory Newly created area in Saemangeum is a state-owned land free of any conflict and regulation, which ensures creative development.

4. government-led Development Project As part of the governmental support, Special Act on Saemangeum has been introduced, and as the test-bed for creative economy, Saemangeum is taking deregulation in order to create business-friendly climate.

5. International Cooperation China and Korea have forged bilateral cooperation at state-level for the development of China-Korea Economic Cooperation Complex(CKECC).

a. 1. Industrial area Compared to other economic zones in Korea, Saemangeum offers highly reasonable land price at 151,249KRW/㎡(≒130 uSD/㎡). while industrial area in Seamangeum costs 500,000KRW per 3.3㎡, Songdo, Incheon, costs 1.7million KRW, Yeongjongdo, Incheon 4 million KRW, and Busan 1.8million KRW.

2. Leisure & Tourism area The estimated land price of Leisure & Tourism zone 1 is 96,000 KRW/㎡(80 uSD/㎡), and gateway area 48,000 KRW/㎡(40 uSD/㎡). The estimated average price of the Shinsi-Yami District is 112,600 KRW/㎡(96 uSD/㎡), and gogunsan Islands District is 147,610 KRW/㎡(126 uSD/㎡).

• Shinsi District 1: 78,350 KRW/㎡(67 uSD/㎡), Shinsi District 2: 163,170 KRW/㎡(139 uSD/㎡)

• Munyeo District 1: 179,600 KRW/㎡(153 uSD/㎡), Seonyu District: 206,590 KRW/㎡(176 uSD/㎡)

As of Oct.2015.

Q. Transportation systems to

saemangeum?

Q. saemangeum’s competitiveness?

Q. Land price?

a. Foreign-invested companies can receive a wide range of benefits from tax breaks, simplified administrative procedures to living convenience.

• national tax benefits ① Corporate and income tax will be exempted for five to seven years according to

investment scale and business type. ② Corporate and income tax will be exempted for five years for project developer. ③ Customs, individual consumption tax and VAT on other capital will be fully

exempted for five years.

• Local tax benefits Acquisition and property taxes will be exempted for maximum 15 years.

• Cash grants Investment with foreign ratio of 30% or more are eligible for cash grants up to 30% of

investment amount(40% in case of R&D)through negotiation.

• Resident benefits Benefits in rent and lease period(up to 100yrs).

• subsidy benefits up to 5 billion KRW of investment subsidy can be granted. A monthly employment

subsidy of 1 million KRW per person will be provided to corporations with more than 20 permanent employees for six months, and a monthly education subsidy of a 500,000 KRW per person under same condition.

• simplified administrative procedures Approval of development plan will directly connect to one-stop licensing.

• Living convenience Residents will enjoy higher living convenience including foreign educational

institutions (K-12 grades and university), foreign medical centers, rental homes for expats, and foreign-language services and broadcasting.

a. • Benefits in common : Operational cost support for five years at institutional level (less than 1 billion KRW per year)

• Non-profit organization, comany research institute : National 50%, local 50%, private 100%

• University research institute : National 50%, local 50%, private 100%, and more (annual subsidy)

Q. Incentives or benefits for foreign-invested companies?

Transportation section Distance Time

West-sea Expressway Seoul ↔ gunsan 202㎞ 2 hours 10 minutes

Railway Seoul ↔ Iksan (KTX) 208㎞ 1 hour 14 minutes

Airport Saemangeum Industrial Complex ↔ gunsan Airport Short distance 15 minutes

PortSaemangeum Industrial Complex ↔ gunsan Port Short distance 15 minutes

Saemangeum Industrial Complex ↔ New Saemangeum Port

Short distance 10 minutes

Q. Investment benefits for foreign educational institutions and research centers?

FAQs


■Business Participation Types

Details of investment may vary depending on the investor's business types and conditions.

a. Corporations moving into Saemangeum Industrial Complex are allowed to invest through moving-in (Jeonbuk Development Corp.companies) and land contract (Korea Rural Community Corp.-companies) after discussion with Saemangeum Development and Investment Agency. Construction must start within two years from the moving-in contracts.

Developers will under the procedures of planner designation, development and enforcement plan establishment, reclamation licensing transfer, business initiation and construction completion.

a. For the convenience of living, various facilities such as commercial business complex, residential complex, neighborhood public facilities, etc. will be introduced in each function area. moreover, in order to help settlement of foreign investors and their families, education facilities, medical centers, etc. will be established as well.

a. We have no limits on investment destination(type of industry), but we do have target industries for strategic investment attraction.

a. ■Qualifications

Q. Promising industries in saemangeum?

Q. Qualifications and types of participation?

Q. Investment process?

Join Saemangeum for Brighter Future

Target Industries(Industry & Research Area) High-tech industries and R&D districts will be established with benefits being available immediately- Parts and materials, chemistry or u-turn corporations, profitable industries in R&D

experiment equipment sharing and inter-corporation technology exchange, and agriculture and sea food processing complex

(Leisure & Tourism Area) A resort will be built through tourism capital attraction from abroad.- Leisure & Tourism Area 1 and 2 (resorts, shopping, theme parks, golf courses, and

boat race and horse riding courses)- Shinsi-Yami District (marine theme tourism, water sports, medical resorts, golf

courses)- gogunsan Islands District (marine recreational resorts, marine cultural exhibitions,

casino hotels)

Business Planner

• general construction corporations : capital or estimated value of construction capacity higher than annual average of development project

• Real estate investment corporations : capital higher than 15/100 of project cost from development project

Corporations with annual average investment performance over past three years that reaches annual average cost of project

• Property developers: annual average performance over past three years that reaches annual average cost of project

• Korea Federation of Small and medium-sized Businesses : Interested parties who supply part or all of the land of the Saemangeum project to union members or business operators through purchase or rental

• Foreign-invested companies : foreign investment ratio higher than 50/100 Companies with foreign investment amount higher than 5/100 of development project cost

Corporations moving in

• Corporations with appropriate business types under basic management plans of industrial complex

- Manufacturing (machine, components, new materials, chemistry and bio)- Customs clearance, R&D, technological support, educational service (including universities)

and film production- Resort, theme park (game or health care) golf courses and accommodations

Reclamation site developmnet

Land supply

Landpurchase

Installation of facilities moving in

Project Developer Tenant Company

02Tenant Company

Moves into fully developed land for business activities

Reclamation site developmnet Installation of facilities selling of land

Raw land developer

01Project Developer(sPC)

Participates from initial stage, from land reclamation to site development and to selling of land

Project Developer

Project Developer

reclamation

Q. settlement condition?

FAQs


a. A real estate investment immigration system, a major benefit contributing to stimulating investment, is under discussion with related authorities. As investment conditions improve via specific investment project, more discussions will follow on deciding particular areas and investment standard amounts.

a. Way of payment differs depending on payment method

• One-off payment : Ten percent of the down payment shall be paid on the contract date, more than 40 percent of the middle payment within three months of the contract date, and the remaining balance within five months.

• Installment : Ten percent of the down payment shall be paid on the contract date, and the installment payment period for the remaining balance shall be decided depending on land purpose and cost. Installments should be paid with interest. Interest rate standard for installment (before the conclusion survey) shall be based on area account settlement date or approval date of land use before completion of construction.)

a. It depends on land type.

• Industrial complex area : Buildings are permitted for factories, warehouses, apartments or dormitories. Building coverage will be under 70 percent and floor area ratio under 300 percent. No limit will be set for the number of stories.

• new regeneration energy area : Buildings are permitted for factories, warehouses, apartments, dormitories, venture company accumulation centers or research centers. Building coverage will be under 60 percent and floor area ratio under 300 percent. The number of stories should be lower than 10.

a. Foreign-invested companies and their partners can move in. Industrial districts for long-term rental will cover about two million㎡ in accordance with Saemangeum Basic management Plans. About 200,000㎡ will be provided in District 1 (mountain, Zone 8) in advance, and part of the land (52,528㎡) was purchased in 2015 for this purpose.

Land can be rented within 50 years and the lease is extendable for another 50 years. Rent will be calculated from the property amount times one percent. Rents of 100, 90 or 75 percent can be applied depending on business type, investment amount and employment status, and an extra discount of up to 10 percent will be applied to target industries including parts and materials for cars and flights, high-tech and fine chemistry industry for stimulation of investment.

a. Full facility support and consideration will be provided for corporations that move in.

• Water : A combined 96,000 tons (390 KRW/ton) of industrial water and 28,000 tons (1,040 KRW/ton) of consumer water will be supplied daily from Osik-do Water Distribution Reservoir near Saemangeum Industrial Complex. Water will be instantly supplied through waterworks upon application.

• gas : A gas pipe for Saemangeum Industrial Complex will be built by November 2017, as well as a gas supply facility covering 23,375㎥ at Saemangeum Industrial Complex. Corporations can have a stable gas supply from early 2018. (Summer time: 19.8909 KRW, winter time: 20.3942 KRW).

• electricity : gunjang Substation supplies electricity (59.2~89.6 KRW/kWh) to corporations, but new electricity infrastructure (2,000mW) is planned for a more stable supply.

a. About 3,000 students in the province graduate from 10 universities every year, and 5,000 field workers are trained yearly. In addition, seven departments with a combined 670 students will take classes at Saemangeum Campus, the academic-industrial multi-campus of major universities nearby (Kunsan National university, Chonbuk National university, Howon university and Kunjang university College). For now, about 400 students from Kunsan National university and Kunjang university College have transferred.

a. As a new growth engine for the Korean economy, Saemangeum has gained keen attention from the central government. Korea is strengthening deregulation policies as a major task for business vitalization through government department cooperation. In the Trade Investment Promotion meeting held in April 2015, Saemangeum was designated a Special Deregulation Zone and deregulation policies were arranged in many fields able to attract investments including employment, environment, labor, moving, immigration and clearance under the chairmanship of the Korean president. As a result, more policies have been implemented such as employment extension for foreigners, simplified visa procedures for investors, exemption for the cost of balanced land purchase after public surface reclamation of water, and designation of bonded areas. And recognizing the needs of business vitalization through more drastic deregulation, more policies are being discussed to provide larger benefits in development, tax, immigration and clearance by comparing the strengths of other successful economic hubs abroad.

Q. utilities?

Q. Workforce?

Q. goverment's deregulation efforts?

Q. Plans for real estate investment immigration system?

Q. Payment for industrial complex?

Q. Restrictions on buildings in industrial complex?

Q. Lease area and related benefits?

FAQsJoin Saemangeum for Brighter Future

18Hub of Asia, Heart of FutureSaemangeum Development and Investment Agency

Investment procedures

One-Stop Invesment ConsultingSaemangeum development and investment agency offers one-stop consulting by designating proper project managers.

Our service covers general information on Saemangeum, regulations and tax issues, tips on foreign investment incentives,

investment conditions, search for promising investment partners, civil complaints related to foreigner investment,

administrative support between governments and institutions, and other forms of support to facilitate the investment

process. Online consulting is also available on our official website.

www.saemangeum.go.kr > investment information> one-stop service

※ Please C.C minaha Kim([email protected]) to ensure your mail has been delivered to appropriate department / person. Thank you.

Investment consultants

Investment Consulting01

Foreign Investment Report 02

Investment Fund Transfer (foreign capital)

03

Registration of Incorporation 04

Capital Transfer through Corporate account06

establishment of Factory07

Registration of Foreign-Investment Company

(Manufacturing & Sales)08

Business(Foreign Investment Company)

Registration05

•Investment consulting (real estate, m&A, factory establishment, moving in industrial complex, small to medium-size corporations, environment, construction and transportation, national tax and duty, and regional taxes) ※ Application form shall be submitted. (In person or via proxy)

• Open account at bank → receive code numbers ※ Existing goods (capital goods), cash

•Transfer through corporate account at bank Currency exchange such as USD or JPY→ KRW

•Foreign exchange purchase certificate to be issued.

• Foreign exchange banks (in Korea or domestic branches of foreign banks)• Invest Korea (KOTRA)

• Registration of incorporation shall be completed by competent court - Office address required for rental agreement

• Research on location conditions (location designation)• Setup of factory (write up business plan) ※ Licensing required for factory establishment or business initiation

• Requires completion at district tax office ※ Registration must be made within 30 days from payment date including object of investment.

• Register with authorities → documents required - Registration certificate of foreign investment company / business license / FX purchase and deposit certificate

Yoo Kyeong-sik Saemangeum Development and Investment Agency ☎ 82.44.415.1062 [email protected]

Yang geon-sik Saemangeum Development and Investment Agency ☎ 82.44.415.1066 [email protected]

Bryan Im Saemangeum Development and Investment Agency ☎ 82.44.415.1074 [email protected]

Kim Jeong-eun Saemangeum Development and Investment Agency ☎ 82.44.415.1078 [email protected]

Kim mi-hee Saemangeum Development and Investment Agency ☎ 82.44.415.1233 [email protected]

Choi moon-Soo Saemangeum Development and Investment Agency ☎ 82.44.415.1232 [email protected]

Yeo Kyeong-Joo Saemangeum Development and Investment Agency ☎ 82.44.415.1065 [email protected]

Kim Chong-ho Saemangeum Development and Investment Agency ☎ 82.44.415.1061 [email protected]

Lee Il-kwon Korea Rural Community Corp. ☎ 82.63.450.9032 [email protected]

Park Jeong-nam Jeonbuk Development Corp. ☎ 82.63.280.2778 [email protected]

Son Dong-wol Saemangeum Development and Investment Agency ☎ 82.44.415.1107 [email protected]

Park Jeong-nam Jeonbuk Development Corp. ☎ 82.63.280.2778 [email protected]

Lee Jun-hee Saemangeum Development and Investment Agency ☎ 82.44.415.1155 [email protected]

| Home Industr y |

| n. america & europe |

| C h i n a |

| J a p a n |

| L a n d s a l e |

| moving-in Contract |

| Building License|

| Factory Register |

| I n f r a s t r u c t u r e |

Documents

[Brochure] Saemangeum Investment Guide (2016)