A Knowledge Creative Corridor for Global Business

DGFEZDaegu-Gyeongbuk Free Economic Zone

As one of the fastest growing economies in the world, since 1960s,Korea now enjoys a highly advanced technological economy,now known as "East Asia's Miracle"Daegu-Gyeongbuk region has been a driving force behind Korea'seconomic development, becoming the center of industrial activities for Samsung Electronics, LG Electronics and POSCO.

As a knowledge-creative FEZ, DGFEZ in Daegu-Gyeongbuk willcontinuously strive to strengthen the Korean economy andits global business partners.DGFEZ offers successful business opportunities."Your success is our success!"DGFEZ will accomplish this for you!

What is a Free Economic Zone?A Free Economic Zone is a specially designated area where regulations have been relaxed and businesses can receive tax breaks, financial support, and many other benefits. MissionTo provide an optimal business environment through deregulation, and by ensuring thatour institutions meet or exceed global standardsTo provide a comfortable living environment for foreign businesspeople

Gateway to Global Business

Free Economic Zones

Overview of KOREALocation : Between China and Japan,

two of the world's leading economies in Northeast Asia

Area : 99,720 km2

Population (2008) : 48,606,787

Capital : Seoul

GDP(2008) : USD 1.128 trillion (ranked 13th in the world)

Per capita Gross National Income (2008) : USD 19,231

Export / Import (2008) : USD 433 billion / USD 427 billion

Inflow Foreign Direct Investment : USD 36.4 billion (ranked 8th among OECD countries)

Major industries : Services 57.2%,

Mining & Manufacturing 28.2%,

Construction 9.1%,

Agriculture, forestry and fishing 3.2%,

Electricity, gas and water supply 2.3%

Overview of Daegu-GyeongbukOfficial name : Daegu Metropolitan City(Daegu),

Gyeongsangbuk-do Province(Gyeongbuk)

Location : Korea's southeast region

Population(2008) : 5,222,266 (Daegu 2,512,604 & Gyeongbuk 2,709,662)

Area(2007) : 19,909 km2 (Daegu 884 km2 & Gyeongbuk 19,025 km2)

Major industries : Electric,

Mobile,

Machineries,

Metals,

Automotive parts,

Textile

Daegu hosts the 2011 IAAF World Championship

An Ideal Location for Global Business

Convenient transportation InfrastructureDaegu-Gyeongbuk is located approximately 90 minutes from Seoul when traveling by the KTX. Also, the Daegu International Airport has 6 international flights to destinations such as Beijing, Shanghai and the Gimhae International Airport has 17 international flights to destinations such as Tokyo, Hongkong. Additionally, there are 5 International Ports within a 1 hour distance from Daegu-Gyeongbuk region, which provides for convenient logistics and transportation.

R&D hub of KoreaDaegu-Gyeongbuk operates superior and specialist R&D facilities such as Daegu Gyeongbuk Institute of Science & Technology(DGIST), Pohang Accelerator Laboratory(PAL), National Center forNanomaterials & Technology(NCNT), POSTECH Biotech Center in the region.

Excellent human capitalThere are 51 universities and colleges in Daegu-Gyeongbuk, and consequently is ranked relatively high in the number of colleges per capita. Annually approximately 70,000 students graduate from these universities and colleges and enter the labor market, with nearly 17,000 of those graduates having majored in the IT, NT, BT, and intelligent automotives areas. Also, the turnover rate of Daegu-Gyeongbuk was only 2% in 2007. Since 2007 for 2 years, Daegu-Gyeongbuk has kept the stablemanagement-labor relationship region with no labor strikes.

World's major cultural regionDaegu is a global city which has been chosen to host numerous sporting and cultural events. The 13th IAAF World Championship in Athletics 2011 and the World Energy Congress 2013 are scheduled to take place in Daegu. Also, Daegu is a city of culture and arts with the International Musical Festival and the International Opera Festival taking place every spring and fall. One can also find World Heritages Sites (UNESCO)such as Bulguksa, Sukgulam and the Gyeongju Historic Areas throughout Gyeongbuk.

Daegu-Gyeongbuk

Project period : 2008~2020

Area : 10 districts encompassing 34 km2

The Daegu-Gyeongbuk Free Economic Zone (DGFEZ) is a special economic zone

in South Korea that offers an optimal business environment by providing

financial incentives, relaxed regulations and customized facilities to global

companies looking to satisfy their customer base in Korea and expand into Asia.

DGFEZ has 4 industrial corridors (IT Convergence, Transportation Components,

Green Energy, Knowledge-based Services) located within five cities in Daegu-

Gyeongbuk (Daegu, Gumi, Gyeongsan Yeongcheon, Pohang).

Overview of DGFEZ

DGFEZ, "Special Economic Zonefor Knowledge Creation“

Knowledge creatorThrough the knowledge corridor of Gumi-Daegu-Gyeongsan-Yeongcheon-Pohang,DGFEZ will enjoy the synergy effect integrating the knowledge-based services such asinternational education, medical, R&D and digital contents and the knowledge-basedmanufacturing specialized IT, mobile, green energy and state-of-the art parts &materials.

Global industrial clusterDGFEZ is an international cluster of specialized IT and electronic industries withSamsung Electronics, LG Electronics, LG Display, Toray Saehan, Samsung Corning,ExxonMobil, and Asahi Glass. POSCO, the 4th largest steel company, and Siemens arelocated in Pohang. Within 1 hour distance, the other global companies operate theirbusiness including Hyundai Motor, SK Energy and GM Daewoo.

Green residential environmentThe districts of DGFEZ will have an eco-friendly living environment with low-carbonindustry and energy efficient commercial and residential buildings. Also, DGFEZ isstriving to become an eco-friendly zone by developing low density areas.

Daegu International School

Yeongcheon Industry District*

Yeongcheon Industry District will be a supply center for parts and materials in the cutting-edge transportation industry. Therefore,in this district, both highly sophisticated and environmentally friendly parts and materials manufacturers will be located.

The District will attract not only firms related to parts and materials that would be used to manufacture heavy industries (machinery, ships, railroad cars, bikes, medical instruments) but also those firms engaged in the highly sophisticated mechanicalparts and materials industries fused by the IT and NT.

Target businesses : : auto/mechanical/railroad cars/heavy machinery/bike parts &materials

Area : 1.66km2

Location : Geumho-eup, Yeongcheon City, Project period : 2008 - 2013

Gumi Digital District*

Gumi Digital District has abundant of opportunities to develop itself as the leader in the IT and mobile industry. This district is concentrating on the IT convergence & fusion industry and on the green energy industry to become the optimal location for investment.Gumi Digital District is planned to be developed as a district of the next generation high-tech industries such as solar cell, secondary battery, LED by combining the existing mobile and IT industries of Gumi.

Target businesses : high-tech IT, mobile, solar cell, next generation display,robotics, LED

Area : 6.24km2

Location : Sandong-myeon, Gumi City, Gyeongbuk Province

Project period : 2012 - 2015

Gyeongsan Knowledge Industry District*

Gyeongsan Academic District will create the best academicsystem for education and R&D in an industrial environment.Through the cohesive interaction amongst education, industry andresearch, this district will become the "Think-Tank" ofknowledge-based Free Economic Zone. Construction machine parts & materials, LED and medical equipment industries will be implemented into the knowledge-based industrial district. Also,Gyeongsan Academic District will incorporate a research complex with a global educational complex to become a core global Knowledge city in Northeast Asia.

Target businesses : foreign universities, R&D institutes, Construction machine patrs& materials, LED and medical equipment

Area : 6.27km2

Location : Wachon-myeon, Gyeongsan City, Gyeongbuk ProvinceProject period : 2011 - 2020

Tax benefits

Beneficiaries- Manufacturers, tourist hotels, general amusement facilities and international seminar halls :Over USD 10 million of FDI.- Logistics and medical facilities : Over USD 5 million of FDI.- R&D facilities : Over USD 1 million of FDI.Beneficial information- Tariff on capital goods : 3 year exemption.- Acquisition and property taxes : Exemption 100% for 10 years and 50% for 3 years.- Income and corporate taxes : Exemption 100% for 3 years and 50% for 2 years.Tax benefits for foreign workers : 30% reduction on domestic income or uniform 15% tax rate applied.Manufacturers : Over USD 30 million of FDI.Logistics : Over USD 10 million of FDI.R&D facilities : Over USD 2 million of FDI.Income and corporate taxes :Exemption 100% for 5 years and 50% for 2 years.

Financialsupport

Building lots supported and distributed at low price for foreign enterprises.Construction costs of foreigner's convenient facilities supported.National and public property : Rental fee reduced, private contract.Financial support for the construction of main infrastructure like road.

Foreign currencydealings

Direct payment allowed under the quota of USD10,000 for ordinary trade activities.

Employmentand labor

environment

Exemption from the obligation of covering monthly leave.Allowance of setting unpaid leaves and menstruation leave.Worker dispatch industries expanded and the period of dispatch prolonged.

Internationalizededucationalenvironment

Authorized establishment of educational institutions by foreign educational foundation.Benefit for foreign educational institutions : purchase of property, construction of facilities,financial support for school management and provision of property.Native entrance to foreign schools eased.Employment of foreign teachers by international high schools allowed.

OmbudsmanOmbudsman office for foreign investorsInternational commercial dispute arbitration center(branch of The Korea Commercial Arbitration Board)

Medical servicePermission for foreign medical facilities by foreigners(pharmacies and general hospitals)Special permission for foreign licenses(both medical and pharmaceutical)

Foreignbroadcasting

Extension of channels for foreign broadcasting(up to 20% of general cable broadcasting)

IncentivesVarious Foreign Investment