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About Free Trade Zone

A shining beacon for investment in global trade! Korean Free Trade Zones

What is a Free Trade Zone?

What is a Free Trade Zone?

The purpose of a Free Trade Zone is to attract foreign investment, promote trade, facilitate international logistics operations, and promote regional development. It also guarantees autonomous manufacturing, logistics, distribution, and trade activities through special permits and support measures stipulated in related laws such as the Customs Act and the Foreign Trade Act.

Economic impact of Free Trade Zones

Promote foreign investment by creating a specialized investment environment

  • A Free Trade Zone provides various functions and a comprehensive range of support, including cheap rent for rental properties, the convergence of production, logistics, and distribution functions, and a one-stop service system by a centralized administrative body.
  • A Free Trade Zone is suitable for attracting foreign investment in the high-tech industry since it is possible to start a business immediately upon relocation into a Free Trade Zone thanks to a pre-supply of industrial real estate at low prices.

Build a hub for international trade

  • A Free Trade Zone converges logistics and distribution functions with processing and manufacturing functions to stimulate international transactions.
  • A Free Trade Zone also improves the competitiveness of domestic companies by stimulating the collaboration between foreign and domestic companies within the Free Trade Zone.

Contribute to regional economic development

  • By enabling each local government to operate Free Trade Zones flexibly as production-centric, trade-centric, or combined facilities depending on local conditions, Free Trade Zones are utilized as a major means of promoting regional industries and regional development.

Promote industrial structure advancement

  • As multinational companies with world-class technology and market networks move into Free Trade Zones, the introduction of new capital goods, the transfer of advanced technologies, and the spread of advanced management know-how, etc. can increase the productivity of domestic companies and contribute to the advancement of the overall industrial structure

Current status of designated Free Trade Zones

The purpose of a Free Trade Zone is to attract foreign investment, promote trade, facilitate international logistics operations, and promote regional development. It also guarantees free manufacturing, logistics, distribution, and trade activities through special permits and support measures stipulated in related laws such as the Customs Act and the Foreign Trade Act.

As of the end of March 2020, there are a total of 1,108 companies spread across 13 regions, including 298 foreign-invested companies and 810 exporting domestic companies.

Current status of industrial complex type Free Trade Zones (as of the end of March 2020)

Sort Masan Gunsan Daebul Donghae Yulchon Ulsan Gimje
Designated date Mar 1970(zone 1)
Dec 1972(zone 2)
Nov 2002(zone 3)		 Oct 6, 2000 Nov 21, 2002 Dec 12, 2005 Dec 12, 2005 Dec 8, 2008 Jan 6, 2009
Area(‘000m2) 957 1,256 1,157 248 344 819 991
Tenants(no. of companies) 117 32 34 16 18 36 30
(Foreign-invested company↔, no. of companies) (69) (19) (19) (7) (14) (8) (25)
Occupancy rate(%) 96.1 91.4 97.9 62.9 68.4 94.1 56.6
No. of employees 5,408 1,657 893 165 224 1,313 382

Current status of airport/port type Free Trade Zones (as of the end of March 2020)

Sort Port of Busan Port of Gwangyang Port of Incheon Port of Pohang Port of Pyeongtaek-Dangjin Incheon International Airport
Designated date Jan 1, 2002 Jan 1, 2002 Jan 1, 2003 Dec 8, 2008 Mar 30, 2009 Apr 6, 2005 (1st)
Dec 31, 2007 (2nd)
Area(‘000m2) 12,195 9,047 1,837 925 1,429 3,050
Tenants(no. of companies) 67 50 1 3 15 689
(Foreign-invested company↔, no. of companies) (64) (28) (-) (-) (9) (36)
Occupancy rate(%) 76.8 92.9 100 79.0 100 91.2
No. of employees 2,758 1,246 40 24 740 15,087