I. Overview of Free Economic Zones (FEZs) in Korea

Around the early 2000s, Korea began implementing the Free Economic Zone (FEZ) model to establish a superior business environment, attract foreign direct investment (FDI), and promote balanced regional economic development. Major FEZs include the Incheon FEZ, Busan–Jinhae FEZ, Gwangyang Bay Area FEZ, Gyeonggi FEZ, Chungbuk FEZ, Daegu–Gyeongbuk FEZ, Gangwon FEZ, and Ulsan FEZ, each of which is designated to foster strategic industries such as logistics, high technology, information and communications technology (ICT), biotechnology and medical services, clean energy, and global service sectors.

II. Key Categories of Incentives for Foreign Investors

1. Direct tax incentives (tax benefits)

Free Economic Zones in Korea provide attractive tax incentives for FDI enterprises, particularly for those making long-term investments or operating in strategic industries.

Exemptions and reductions of national and local taxes:

• A full (100%) exemption from customs duties on imported capital goods used for manufacturing activities within the FEZ.
• Exemption from, or reduction of, property transfer tax and local property tax for an extended period, subject to the regulations of each locality. This enables enterprises to reduce initial investment and operational costs within the Free Economic Zone.

2. Administrative support and streamlining of procedures

Numerous administrative regulations are simplified within the FEZ, including:

• The ‘one-stop shop’ service provides comprehensive assistance for completing investment procedures, obtaining licenses, and securing business approvals through a single administrative authority, thereby reducing the time required for enterprises to commence operations.
• Deregulation – Reduction of legal barriers for international business operations and free trade activities.

These supporting mechanisms are intended to lower compliance costs for foreign enterprises and enable them to integrate more rapidly into the Korean market.

3. Living conditions and support for foreign personnel

To attract investors and the international workforce, Free Economic Zones in Korea have also established favorable living conditions and support measures:
– Support for the development of international educational institutions and high-quality medical services within the zone.

– Provision of language assistance, as well as legal and administrative advisory services for foreign workers and their families.

– Establishment of convenient residential environments adjacent to industrial complexes, enabling an effective integration of business operations and daily living.

This enhances the overall attractiveness for enterprises seeking to relocate experts and highly skilled technical personnel to Korea.

4. Expansion of strategic investment sectors

Free Economic Zones are structured and developed according to various strategic industry clusters:

–  Incheon FEZ: trung tâm dịch vụ logistics – tài chính quốc tế, y tế, công nghệ số, R&D.
–  Busan-Jinhae FEZ: Port logistics, machinery manufacturing, and maritime industries.

–  Gwangyang Bay Area FEZ: Marine logistics and industrial manufacturing.
–  Gyeonggi FEZ, Chungbuk FEZ, Daegu-Gyeongbuk FEZ: Clusters related to high technology, the automotive industry, new energy, and pharmaceuticals.

This diversified planning enables Vietnamese enterprises to select investment sectors that align with their competitive capabilities and global export strategies.

III. Significance of FEZ Incentives for Vietnamese Enterprises.

1. Opportunity for access to the Northeast Asian market

Investment in a Free Economic Zone in Korea establishes a strategic gateway to major markets such as Japan and China, supported by Korea’s advantageous geographic location, its integrated seaport and logistics network connecting ASEAN and China, and the multilateral free trade agreements to which Korea is a party.

2. Benefit from Korea’s extensive FDI enterprise ecosystem

Even as small and medium-sized enterprises, Vietnamese companies are able to establish partnerships and participate in global supply chains within Korea’s Free Economic Zone, taking advantage of preferential tax policies and modern infrastructure to expand their manufacturing, logistics, and research and development (R&D) activities.

3. Strengthening international competitiveness

The utilization of tax incentives, streamlined administrative services, and workforce support measures will enable Vietnamese enterprises to reduce operational costs, accelerate project implementation, and enhance their competitiveness in both the Korean market and international export markets. 

IV. Conclusion

Free Economic Zones (FEZs) in Korea in 2025 represent one of the most attractive investment environments in Northeast Asia, owing to their comprehensive tax incentives, administrative support, international living conditions, and strategic industrial planning. These policies function not merely as competitive instruments for attracting foreign direct investment (FDI), but also as an effective gateway for Vietnamese enterprises seeking to expand their markets, participate in global value chains, and enhance their overall competitiveness. For Vietnamese companies planning to invest in Korea, FEZs constitute an ideal framework for project implementation, business development, and the promotion of bilateral economic cooperation.

V. About NYLA – Korean Legal Office

■ NYLA – Your Trusted Legal Partner in Korea

At NYLA, we understand that the success of foreign businesses in Korea requires not only a solid business strategy but also reliable legal support. With a team of experienced Korean attorneys and legal professionals, NYLA provides tailored legal services for companies, investors, and individuals operating or planning to establish a presence in Korea.

We support our clients throughout the entire business journey with comprehensive services, including:

• Legal consultation on company establishment, taxation, and immigration;
• Advice on commercial real estate, franchising, and product distribution;
• Support in human resources, marketing, and business strategy.

In addition to legal advisory, NYLA also represents clients in civil litigation cases related to business, labor, marriage, family, and inheritance to ensure their rights and interests are fully protected.

■ Contact NYLA

If you’re a foreign business or individual looking for a reliable legal partner in Korea, NYLA is here to help. We are committed to delivering effective, practical, and personalized legal solutions for every client.

With a proven track record of assisting hundreds of international clients, our team is equipped to help you navigate complex legal challenges—whether it’s commercial disputes, contract issues, or foreign investment guidance.

Don’t let legal matters hold you back. Let NYLA be your trusted guide in the Korean market.

■ Get in touch with NYLA for expert legal support

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