Yulchon Free Trade Zone Office

Free Trade Zone Office

• FTZ guarantees free manufacturing, logistics, distribution, and trading activities. As such, It is a designated area for attraction of foreign investments and promotion of trade, employment, and technologies, thus contributing to national and regional economic development.
• Established in December 2005 under the Act on FTZ Designation and Operation, YFTZ is being fostered as a logistical hub of Northeast Asia. It provides the best investment environment for corporate businesses.
• All administrative services, including foreign investment reports, factory construction approval, and export and import approval are handled by YFTZ of MKE with a one-stop service system geared toward enhancing investor convenience. As such, YFTZ is committed to attracting foreign investments and promoting exports.
• Various incentives, including tax breaks, low rental fees, and support facilities, are provided to foreign investors in accordance with related laws. In particular, YFTZ is a non-tariff zone, thus boosting export and import convenience.

Significance and Types of FTZs

• Free Trade Zone Office

Significance

- A special zone that allows exceptional incentives, including waiving of tariff for trade, production, and investments in a state

- A special zone that implements global standards and provides a foreign-investment-friendly environment.

Types

- Production-oriented FTZs: Aim to activate foreign investments in the manufacturing sector((Masan,Gunsan,Daebul,Donghae, and Yulchon), Taiwan's export zone, etc.)

- Trade-oriented FTZs: Aim to promote international trade by easing regulations(Hamburg in Germany, Amsterdam and Rotterdam Port in the Netherlands, etc.)

- Production-and-trade-combined FTZs: Aim to vitalize all economic activities(FTZs in the USA, Hong Kong, and Singapore)

Examples of FTZ

Korean FTZs (as of 2010)

Economic Effects

• Promotion of foreign investments by creating a specialized investment environment

FTZ provides sites for rent with low fees; combined production, logistics, and distribution functions; and the agency's one-stop total support services.

FTZ provides low-priced industrial sites, enables business commencement upon start of tenancy, and gives support for even small qualified investments, thus putting it in an optimal position to attract high-tech foreign investments.

• International Trade Hub

FTZ provides the combined functions of logistics, distribution, processing, and manufacturing, thereby vitalizing internal trade.

FTZ vitalizes foreign-local business linkages, thereby enhancing local business competitiveness.

• Contribution to Regional Economic Development

Each municipality can operate its own FTZ as a production, trade, or combined-function FTZ, using the FTZ as a crucial means to promote regional industrial and economic development.

• Refining of Industrial Structures

FTZ attracts world-class multinational corporations with cutting-edge technologies and market leadership and facilitates the attraction of new capital goods, the transfer of sophisticated technologies, and the dissemination of advanced management skills, thus helping enhance local enterprise productivity and refine local industrial structures.