Hello,

This is Attorney Kyusung Lee from WEON law, specializing in foreign-invested companies and providing related legal advisory services.

When a foreign investor establishes a corporation in Korea and registers it as a foreign-invested company, a lease agreement for an office space is required.

While a lease agreement is not mandatory for corporate registration itself, an address is necessary. Furthermore, subsequent procedures, such as business registration and investment visa applications, require a lease agreement.

Today, I’ve put together information that might help those wondering about site selection when establishing a foreign-invested company.

Please read through to the end, and if you have any questions or find anything unclear, feel free to contact me.

When selecting a site for establishing a foreign-invested company, it is advisable to understand the company's type and industry and make a choice accordingly.

Generally, national industrial complexes or general industrial complexes offer optimal environments for business operations, as they are planned locations with concentrated infrastructure and facilities related to major clients.

In Korea, there are specific sites designated to attract foreign investments, such as Foreign Investment Zones (FIZs), Free Economic Zones (FEZs), and Free Trade Zones (FTZs). These areas are worth considering as a priority.

Additionally, depending on the characteristics of the industry, you may explore other planned sites or individual sites that offer favorable conditions for the intended business.

< Planned Sites vs. Individual Sites >

Planned Sites (Industrial Complexes)
Planned sites are designated and developed under comprehensive plans to install industrial facilities and support facilities for workers and users in a concentrated manner. These areas provide convenience for securing factory land, fostering cooperation among companies, securing a workforce, and ensuring a steady supply of raw materials and components.

However, the types of businesses allowed and the management rules vary depending on the purpose of the site. Even within the same manufacturing sector, permissible industries and regulations differ across complexes. It is crucial to thoroughly review these details.

Individual Sites
Individual sites refer to areas outside of planned sites, such as industrial complexes. They include land or buildings purchased or leased independently by companies in urban or residential areas. Businesses must obtain permits to change the use of such properties to establish factories.

For manufacturing businesses, individual sites allow entry into buildings classified as factories or Type 2 Neighborhood Facilities (manufacturing workshops) under the Enforcement Decree of the Building Act.

However, all land in Korea is categorized by designated use areas under the National Land Planning and Utilization Act, and specific activities are restricted by these classifications.

If you plan to construct a building, you must first confirm the permissible uses and restrictions for the area under the Act and local government ordinances.

< Pros and Cons of Planned Sites and Individual Sites >

▪ Planned Sites (Industrial Complexes)

▪ Individual Sites

Today, we’ve focused on how to decide the location for a foreign-invested company and reviewed planned sites (industrial complexes) and individual sites.

As shown, selecting an appropriate location is essential for the efficient operation of foreign-invested companies in Korea.

However, it is often challenging for foreign investors to independently examine and decide on these aspects. That is why many clients seek my advice.

About Attorney Kyusung Lee
Attorney Kyusung Lee of WEON Law graduated from the prestigious Hotchkiss School in Connecticut and earned a degree in Economics from Brown University, an Ivy League institution. He later obtained his legal qualification in Korea.

With professional experience in the legal team of a major corporation, registration as a startup specialist by the Korean Bar Association, and certification as an international anti-money laundering specialist (CAMS), Attorney Lee has built extensive expertise.

Leveraging his global experience and legal knowledge, he now specializes in matters related to foreign-invested companies, English-language contracts, corporate litigation, and more.

If you need assistance regarding any of the above, please feel free to reach out to Attorney Kyusung Lee at WEON Law.

Thank you.

Contact

Tel: +82 2 6264 7604

Email: kslee@weonlaw.co.kr