Professional Documents
Culture Documents
Special Act On Designation and Management of Free Economic Zones
Special Act On Designation and Management of Free Economic Zones
Special Act On Designation and Management of Free Economic Zones
Article 1 (Purpose)
The purpose of this Act is to facilitate foreign investment, strengthen national competitiveness, and seek
balanced development among regions by improving the business environment for foreign-invested
enterprises and living conditions for foreigners through the designation and management of free economic
zones.
Article 2 (Definitions)
The terms used in this Act shall be defined as follows:
1. The term "free economic zone" means a zone developed to improve the business environment for
foreign-invested enterprises and living conditions for foreigners and designated and published in
accordance with the provisions of Article 4;
2. Deleted; <by Act No. 10529, Apr. 4, 2011>
3. The term "foreigner" means a person who falls under Article 2 (1) 1 of the Foreign Investment
Promotion Act;
4. The term "foreign-invested enterprise" means an enterprise provided for in Article 2 (1) 6 of the
Foreign Investment Promotion Act;
5. The term "foreign educational institution" means a school (including any branch thereof) established
and administered in accordance with foreign Acts and subordinate statutes.
Article 6-2
Article 6-3
Article 7-3 (Consultation when Developing Areas for which Development Plan for Free Economic
Zone has not been Established within Free Economic Zones)
Any person, who intends to grant approval, authorization, designation, permission, etc. on development
works under any other Act for any area within a free economic zone regarding which a development plan
for a free economic zone has not been established, shall consult with the Minister of Trade, Industry and
Energy: Provided, That, in cases prescribed by Presidential Decree, he/she shall have consultation with the
competent Mayor/Do Governor. <Amended by Act No. 11690, Mar. 23, 2013>
Article 8-5 (Revocation of Designation of Development Project Operators and Substitute Designation,
etc.)
(1) The Mayor/Do Governor may revoke the designation of a development project operator in any of the
following cases:
1. Where the development project operator obtains approval, designation, etc. under this Act by fraud or
other improper means;
2. Where the development is unlikely to be completed within the implementation period because the
purchase, etc. of land is delayed due to grounds attributable to the development project operator;
3. Where the development project operator fails to perform an implementation plan under Article 9 (1)
without good cause;
4. Where the development project operator fails to meet qualification requirements under Article 8-3 (1)
5 and (2) 2;
5. Where the development project operator fails to apply for approval for an implementation plan under
Article 9 (1) within two years from the date of designation as a development project operator without
good cause;
6. Where the development project operator fails to comply with an order issued under Article 8-4 (2)
without good cause;
7. Where the development project operator violates this Act and the revocation of the designation of a
development project operator is requested for public interests.
(2) Where the Mayor/Do Governor revokes the designation of a development project operator pursuant to
paragraph (1), he/she may substitute a new development project operator. In such cases, Article 8-3 (1)
through (4) shall apply mutatis mutandis to the designation of a development project operator.
(3) A development project operator substituted pursuant to paragraph (2) shall succeed to the status of the
former development project operator with respect to the development plan for a free economic zone and
approval for the implementation plan under Article 9 (1).
(4) When the Mayor/Do Governor revokes the designation of a development project operator or substitute
a new development project operator pursuant to paragraphs (1) and (2), he/she shall announce the details
thereof in the public bulletin.
Article 9 (Approval for Implementation Plans for Developing Free Economic Zones)
(1) A development project operator shall prepare an implementation plan for developing free economic
zones (hereinafter referred to as "implementation plan") and obtain approval therefor from the competent
Mayor/Do Governor within two years from the date of designation as a development project operator, as
prescribed by Presidential Decree. The same shall apply where he/she intends to modify any of the
approved matters: Provided, That where the development of any free economic zone is implemented in
phases in accordance with Article 4 (7), an application for approval for the final phase of the
implementation plan shall be filed by the time set separately within a range of ten years from the date of
the public announcement under Article 4 (8). <Amended by Act No. 10529, Apr. 4, 2011>
(2) Where a Mayor/Do Governor approves an implementation plan that meets the criteria prescribed by
Presidential Decree or approves any modification thereof, he/she shall consult, in advance, with the
Minister of Trade, Industry and Energy. <Amended by Act No. 10529, Apr. 4, 2011; Act No. 11690, Mar. 23,
2013>
(3) Where a development project operator requests extension of the deadline for approval for the
implementation plan due to any unavoidable reason, such as delay in foreign investment or natural
disasters, etc., the Mayor/Do Governor may extend the said deadline by a period not exceeding one year.
<Amended by Act No. 10529, Apr. 4, 2011>
(4) An implementation plan shall include a district-unit plan formulated in accordance with Article 52 of
the National Land Planning and Utilization Act.
(5) A Mayor/Do Governor shall consult with the development project operator about renting, or supplying
for lotting-out, part of the land for industrial or distribution facilities to foreign-invested enterprises, taking
into account the characteristics and conditions of the free economic zone under his/her jurisdiction and
reflect such matters in an implementation plan. <Newly Inserted by Act No. 10529, Apr. 4, 2011>
Article 9-2 (Special Cases concerning the National Land Planning and Utilization Act)
(1) The Special Metropolitan City or any Metropolitan City having jurisdiction over a free economic zone
or any Si/Gun located within a free economic zone may, where deemed necessary for a development
project, separately determine the maximum building coverage ratio or building-to-land ratio applicable to
the free economic zone within 150/100 by municipal ordinance, as prescribed by Presidential Decree,
notwithstanding Article 77 or 78 of the National Land Planning and Utilization Act.
(2) Notwithstanding the main body other than each subparagraph of Article 29 (2) of the National Land
Planning and Utilization Act, the urban and Gun management planning under subparagraph 2 of the same
paragraph shall be determined by the relevant Mayor/Do Governor. <Amended by Act No. 10599, Apr. 14,
2011>
Article 9-3 (Special Cases concerning the Installation and Utilization of Sports Facilities Act)
A development project operator may, where deemed necessary for a development project, implement the
development project in accordance with the installation of buildings and the site's size as provided for in
the implementation plan, notwithstanding Article 11 of the Installation and Utilization of Sports Facilities
Act.
Article 9-4 (Reversion of Public Facilities, Land, etc.)
Where a development project operator installs new public facilities (excluding parking lots and sports
grounds; hereafter the same shall apply in this Article) or installs facilities replacing the existing public
facilities due to the implementation of such development project, Articles 65 and 99 of the National Land
Planning and Utilization Act shall apply mutatis mutandis to the reversion of the said facilities. In such
cases, the development project operator deemed an administrative agency shall be limited to a person
falling under any of Article 8-3 (1) 1 through 4. <Amended by Act No. 10529, Apr. 4, 2011>
1. through 3. Deleted. <Amended by Act No. 10529, Apr. 4, 2011>
Article 23-3 (Special Cases concerning Permission, etc. for Foreigner-Only Casino Business)
(1) Notwithstanding Article 21 of the Tourism Promotion Act, the Minister of Culture, Sports and
Tourism may grant permission to engage in casino business (limited to foreigner-only casino business)
under Article 3 (1) 5 of the same Act if a person who intends to obtain permission to engage in such
business in a free economic zone intends to make a foreign investment and meets all of the following
requirements:
1. The amount of foreign investment to be invested in tourism business within a free economic zone
shall be at least 500 million U.S. dollars;
2. Money to be invested shall not fall under gains from crimes provided for in subparagraph 4 of Article
2 of the Act on Regulation and Punishment of Criminal Proceeds Concealment in accordance with a
final judgment of a sentence;
3. He/she shall satisfy matters prescribed by Presidential Decree, such as the credit status of investors,
etc.
(2) A person who intends to obtain permission to engage in casino business under paragraph (1) shall
apply for permission to the Minister of Culture, Sports and Tourism, as prescribed by Presidential Decree.
(3) Necessary matters concerning permission to engage in casino business under paragraph (1), such as the
place of business, timing to start business, etc. shall be prescribed by Presidential Decree.
(4) A person who has obtained permission to engage in casino business under paragraph (1) shall have
facilities and equipment in place under Article 23 (1) of the Tourism Promotion Act by the time he/she
starts business.
(5) Where a person who has obtained permission under paragraph (1) falls under any of the following
subparagraphs, the Minister of Culture, Sports and Tourism shall revoke such permission:
1. Where investment under paragraph (1) 1 is not made;
2. Where money to be invested falls under gains from crimes provided for in subparagraph 4 of Article
2 of the Act on Regulation and Punishment of Criminal Proceeds Concealment in accordance with a
final judgment of a sentence.
(6) Notwithstanding Article 11 of the Tourism Promotion Act, a person who has obtained permission
under paragraph (1) may entrust any other person with the management of facilities necessary for the
operation of casino business. In such cases, the entrusted manager shall not fall under grounds for
disqualification under Article 22 of the Tourism Promotion Act.
(7) Except as otherwise expressly provided for in this Act, the Tourism Promotion Act shall apply to
permission, etc. for casino business.
Article 24-2 Deleted. <by Act No. 13837, Jan. 27, 2016>
Article 27 (Special Cases concerning Handling of Administrative Affairs of Local Governments, etc.)
(1) A Mayor/Do Governor shall directly perform the following administrative affairs among
administrative affairs that the head of a Si/Gun/Gu is mandated to perform within a free economic zone:
Provided, That the same shall not apply to affairs prescribed by ordinance of a City/Do as affairs under
subparagraphs 5, 7, 9, 12, and 18: <Amended by Act No. 9774, Jun. 9, 2009; Act No. 10272, Apr. 15, 2010; Act
No. 10331, May 31, 2010; Act No. 10529, Apr. 4, 2011; Act No. 10580, Apr. 12, 2011; Act No. 10599, Apr. 14, 2011;
Act No. 10892, Jul. 21, 2011; Act No. 12248, Jan. 14, 2014; Act No. 12737, Jun. 3, 2014; Act No. 12959, Dec. 31,
2014; Act No. 13805, Jan. 19, 2016; Act No. 14344, Dec. 2, 2016>
1. Supervision over the housing associations and the supply of housing, etc. under Articles 11, 11-3, 14,
15 (1), 43, 44, 49, 54, 57, 59, 93, 94, 96 and 106 of the Housing Act;
2. Permission for construction and management of structures, etc. under Articles 4, 11, 14, 16, 18, 19
through 21, 22, 27, 29, 30, 36, 37 through 39, 43, 45, 46, 60, 79 through 81, 83, 85, 88, 89 and 113 of
the Building Act (excluding permission for construction and management of structures, etc. within a
restricted development area);
3. Administrative affairs involving the environmental impact assessment, etc. under Article 25 of the
Environmental Impact Assessment Act;
4. Administrative affairs involving the control, etc. of business place wastes under Articles 17, 39, 48,
49 and 68 of the Wastes Control Act;
5. Deleted; <by Act No. 12924, Dec. 30, 2014>
6. Administrative affairs involving conservation, etc. of soil environment under Articles 8, 12 through
14, 24, 26-2 and 32 of the Soil Environment Conservation Act;
7. Administrative affairs involving the management, etc. of sewerage under Articles 8, 9, 22 through 24,
57, 58, 61 of the Sewerage Act;
8. Administrative affairs involving the utilization and management of forest, such as permission for
cutting standing trees under Article 36 of the Creation and Management of Forest Resources Act, for
diverting the use of mountainous districts, for extracting soil and stones and for reinstating diverted
mountainous districts, etc. pursuant to Articles 14, 15, 15-2, 17, 19, 19-2, 20, 21, 25, 27, 30, 31, 37
through 44, 49 and 57 of the Mountainous Districts Management Act;
9. Administrative affairs involving the preparation for a plan for creating urban parks, and the
establishment, etc. of urban parks (limited to urban parks established according to an implementation
plan under Article 9 of this Act) under Articles 16-2, 17, 19, 27, 29 through 33, 37 of the Act on Urban
Parks, Green Areas, Etc.;
10. Administrative affairs involving reporting, etc. on the diversion of use of farmland under Articles 35
through 43, 51, 54 and 55 of the Farmland Act;
11. Administrative affairs involving registration and management of tourist accommodation business,
etc., approval for a business plan, permission for and management of amusement facility business, etc.
under Articles 4, 5, 15, 35 through 38, 77, 78 and 86 of the Tourism Promotion Act;
12. Deleted; <by Act No. 12924, Dec. 30, 2014>
13. Administrative affairs involving permission for occupying and using public waters, management
thereof, etc. under Articles 6, 8 through 15, 17 through 21, 55, 57, 58, and 66 of the Public Waters
Management and Reclamation Act;
14. Administrative affairs (limited to an urban development zone established within a development
project district pursuant to a development plan for a free economic zone under Article 6 of this Act)
involving application for the designation of any urban development district, etc. under Articles 3, 7, 10,
11, 26, 29, and 46 of the Urban Development Act;
15. Administrative affairs involving the imposition, collection, etc. of administrative fines incurred by a
delay in the registration of real estate under Articles 3 through 5 and 12 of the Act on Special Measures
for the Registration of Real Estate;
16. Deleted; <by Act No. 13797, Jan. 19, 2016>
17. Administrative affairs involving requests for purchase of sites for urban and Gun planning facilities,
permission for development activities, implementation of projects for urban and Gun planning facilities,
establishment of execution plans for each stage, imposition and collection of compulsory fines, access
to land, hearing, reporting, examination, imposition and collection of administrative fines, etc. under
Articles 47, 56 through 58, 60 through 65, 85, 86, 89, 118 through 124, 124-2, 130, 133, 136, 137 and
144 of the National Land Planning and Utilization Act (administrative affairs involving requests for
purchase of sites for urban and Gun planning facilities, establishment of execution plans for each stage,
and implementation of projects for urban and Gun planning facilities shall be limited to those for urban
and Gun planning facilities to be installed in a development project area pursuant to a development plan
for a free economic zone under Article 6 of this Act and infrastructure to be installed in a free economic
zone after receiving preferential support from the State or local governments under Article 18 of this
Act);
18. Administrative affairs concerning the construction of local roads, Si roads and Gun roads,
determination of road zones, and designation of clearance zones, etc. under Articles 10, 19, 21, 25, 39,
and 40 of the Road Act (only applicable to affairs concerning roads constructed in accordance with
implementation plans under Article 9 of this Act and roads constructed by receiving subsidies from the
State or local governments first of all pursuant to Article 18 of this Act);
19. Administrative affairs involving approval for setting up, etc. of a factory and registration of a
factory, etc. under Articles 9, 13, 13-2, 13-3, 13-5, 14, 14-2 through 14-4, 15, 16, 16-2, 17 through 21,
28-2, 28-4, 28-8 and 55 of the Industrial Cluster Development and Factory Establishment Act;
20. Administrative affairs involving approval, etc. for plans for installing urban gas facilities under
Articles 11, 11-2, 14 through 17, 27, 29, 41, 44-2 and 54 of the Urban Gas Business Act;
21. Administrative affairs involving permission for manufacturing high- pressure gas under Articles 4,
10, 20, 36-2 and 43 of the High-Pressure Gas Safety Control Act;
22. Administrative affairs involving verification as to whether technical standards are met before the
commencement of information and communications work, pre-use inspection and reporting on the
current status of pre-use inspection under Articles 36 and 72-2 of the Information and Communications
Construction Business Act;
23. Administrative affairs involving the examination and registration of land, issuance of lot numbers
and the inspection, etc. of findings of the cadastral survey under Articles 8, 24, 25, 27, 64, 66, 69, 74
through 90, 99, 102, 106 and 111 of the Act on the Establishment, Management, etc. of Spatial Data;
24. Administrative affairs involving the grant of a registration number for the registration of real estate
under Article 49 of the Registration of Real Estate Act;
25. Administrative affairs involving reporting on real estate transactions, verification and investigation
of reported price of real estate transactions, reporting on and permission for foreigners, etc. acquiring
real estate, etc., permission for land transaction contracts, and imposition and collection of
administrative fines, etc. under Articles 3, 5, 6, 8, 9, 10 through 18, and 28 of the Act on Report on Real
Estate Transactions, Etc.;
26. Administrative affairs involving permission for and reporting on the installation of noise and
vibration emission facilities under Articles 8 through 12, 14 through 20, 47, 51, and 60 of the Noise and
Vibration Control Act and management thereof including administrative disposition, etc.;
27. Administrative affairs involving registration of establishment of pharmacies, reporting on
discontinuation of business, etc. thereof, preparation of medicines, preparation of pharmacy medication,
sales of drugs, etc. under Articles 20 through 23, 41, and 44 through 50 of the Pharmaceutical Affairs
Act.
(2) Where the head of the competent Si/Gun/Gu requests the Minister of Trade, Industry and Energy for
exclusion from application under paragraph (1) regarding unit districts for development projects whose
development and investment levels exceed the standards prescribed by Presidential Decree after
consultation with the competent Mayor/Do Governor, and the Minister of Trade, Industry and Energy
deems it necessary following deliberation and resolution by the Free Economic Zone Committee,
paragraph (1) may not be applied: Provided, That a blanket request shall be made for adjoining unit
districts for development projects prescribed by Presidential Decree. <Newly Inserted by Act No. 14307, Dec.
2, 2016>
ADDENDUM
This Act shall enter into force on July 1, 2003.