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Korea International Trade Association

Korea International Logistics Council

Fl. 46, Trade Tower, Samseong-dong, Kangnam-gu, Seoul, Korea
TEL: 82-2-6000-5114
FAX: 82-2-6000-5460

Logistics in Korea

Korea Trade-Investment Promotion Agency

13, Heolleungno, Seocho-gu, Seoul, Korea
TEL: 82-2-3460-7114
FAX: 82-2-3460-7777


in Korea

Emerging Investment Opportunities

Emerging Investment Opportunities

ⓒ 2009. Ministry of Land, Transport and Maritime Affairs (MLTN).

Invitation to Korea

ortheast Asia (NEA) is emerging a hub of the global economy thanks to strong growth in its
leading economies such as Korea, China, and Japan. The significance of its role is rising
day after day. It is also the center of international trade as the largest manufacturing base,
and one of the three largest economic blocs alongside Europe and North America.

Korea stands at the heart of this massive market that boasts a population of 700 million and GDP
worth 5.3 trillion dollars within 1,200 km. We are now the 13th largest economy in terms of trade
volume thanks to our geographic advantage.
One of our major export items is vessels that are mainly sold to EU members such as Germany,
France, the UK, and Spain. Cell phones, wireless communication devices, electronics (manufactured
by companies including Samsung and LG), automobile, and steel plates are also popular export
items. Our main import items are oil, natural gas, electronics, and agricultural products from the
EU, Middle East, and North America.

Our goal is to create national wealth through the logistics industry utilizing the advantageous
location right between China and Japan. To this end, we are developing a business-friendly
environment and fostering logistics as an advanced service industry leading the creation of added-

World-class logistics companies operating in our Incheon International Airport and the Port
Hinterland Complex of Busan New Port include DHL, Schenker, Tesco, Steinweg, Mitsui&Co., LTD.,
Daiei Shipping. They are carrying out successful businesses in the areas of assembling, processing,
packaging, and labeling. Currently, the global logistics market that had posted continuous growth
in the past is suffering from the recession around the world. However, the economic crisis can be
turned into an opportunity to identify new growth engines through drastic investment strategies.

The Korean government is striving to minimize logistics cost and raise business efficiency of
multinational companies that have invested in our market. To this end, we are supporting them
in various ways such as building infrastructure including hinterland complexes, and offering

‘Logistics in Korea’ provides guidance to multinational companies on Korea’s logistics infrastructure

and investment climate. It is an introduction of Korea’s logistics industry and investment procedure
for companies and investors around the world. I hope the guidebook contributes to efficient
investment decision-making and success of companies operating or interested in Korea.

June 2009
Chung, Jong-hwan
Minister of Land, Transport and Maritime Affairs
Republic of Korea

Invitation to Korea 1 Free Trade Zones

What are Korea's FTZs? 88
Industrial Complex Free Trade Zone 93
I. Welcome to Korea Airport · Port Free Trade Zones 97
Korea at a Glance
Advanced IT, HR Infrastructure for a Logistics Hub 102
General Information 6
General Economic and Social Information 10 The Logistics Industry in Korea 104

II. Gateway to Northeast Asia III. Business Opportunities in Korea

Korea, the Logistics Hub of Northeast Asia 16
Competitive Business Models 110
Sea Transport
Success Stories 128
The Port of Busan 21
Case 1~4 (Sea port based)
The Port of Gwangyang 28
Case 5~8 (Airport based)
The Port of Incheon 32
Case 9~10 (FEZ, FTZ port based)
The Port of Pyeongtaek · Dangjin 36
The Port of Ulsan 38
The Port of Pohang 41
Other Seaports 42 IV. Foreign Direct Investment in Korea
Air Transport Overview of FDI in Korea 146
Incheon International Airport 47 Government Policy and Organization 154
Gimpo International Airport 54
Gimhae International Airport 55 Foreign Investment Procedures and Incentives 157

Rail Transport Living Environment in Korea 172

Domestic Network 57
Trans Siberian Railway, Trans China Railway, Trans Korean Railway 59

Land Transport Appendix

Expressway and Domestic Network 64 Major Logistics Companies in Korea 206
ICDs and Distribution Centers 67 Foreign Organizations in Korea 209
Gyungin Waterways 70
Logistics Related Organizations in Korea 212
Coastal Transport 72
Korean Embassies 214
Free Economic Zones KITA (Korea International Trade Association) 220
What are Korea’s FEZs? 74
KOTRA (Korea Trade-Investment Promotion Agency) 221
Korea’s Free Economic Zones 80
I. Welcome to Korea
Korea at a Glance
I. Welcome to Korea

Korea at a Glance

General Information
Korea is a democratic republic. The Constitution of the Republic of Korea states that technically at war. After the Cold War waned in the 1990’s however, the two countries were
“sovereignty lies with the people and all powers consequently come from the people.” The ready to commence some limited peaceful exchanges, including high-ranking diplomatic
current constitution and political system were first promulgated in 1948 after the country exchanges like the Six-Party Talks, as well as the establishment of the Kaesong Industrial
was liberated from 36 years of Japanese colonial occupation beginning in 1910. The head of Complex and the commencement of the Mount Geumgang (Diamond Mountain) tourism
the nation is the President, who is directly elected by the Korean people every five years for project.
a single term. The President represents Korea and is the head of the executive branch of the
government. The Republic of Korea has a population of about 48 million people. Its population density is
very high due to its small territory (roughly equivalent to the U.S. State of Indiana). Koreans are
The Korean Peninsula is divided into two distinct political entities and governments. Like very eager to provide a strong education for their children, which has contributed to Korea’s
Germany, which was formerly divided into East and West Germany, Korea remains split in two success in overcoming its territorial and resource limitations. Today, a large and well educated
as a result of the Korean War. When Japan surrendered at the end of World War II, the country workforce is one of Korea’s greatest assets. At the same time, however, Korea is becoming a
became subject to two competing political ideologies, pro-democracy and pro-communism, rapidly aging society due to its very low birth rate. Some experts forecast that the birth rate
each intent on establishing their own preferred form of government. will be only 0.21% by 2020. Foreigners account for nearly 2% of the population, exceeding
more than one million people in 2007.
The Korean War broke out on June 25, 1950 and quickly escalated into an international
conflict when the Soviet Union and China intervened to back North Korea, while United Nations Nearly half of all Koreans live near Seoul, which has nearly 11 million inhabitants and is by far
forces supported South Korea. The war lasted three years until an armistice was declared the largest city. Seoul is characterized by its many high-rise office and residential buildings.
on July 27, 1953. From that time, Korea has remained divided, with the two Koreas are still In contrast to the preference in many other countries, most urban Koreans prefer high-rise
apartments for their convenient amenities and ready liquidity upon sale.

The strong demographic concentration in Seoul and its wider metropolitan area is a result of
the rapid migration from the countryside that followed the industrialization and urbanization of
the 1960s and 1970s. Industrial infrastructure was built around Seoul while cultural facilities,
entertainment & retail, and education were concentrated in Seoul itself. Seoul is also the
residence of the majority of foreigners living in Korea.

6 Korea at a Glance 7
I. Welcome to Korea

persevered even in the face of numerous invasions by foreign countries. Korea has largely
been a culturally and linguistically homogeneous nation for most of its history. With the recent
inflow of laborers from other parts of the world, however, a new more multicultural paradigm is

Korea’s culture differs from that of its neighboring countries. Koreans traditionally considered
the cultural heritage of China as fanciful and colorful, while Japan’s cultural heritage is
considered delicate and feminine. In contrast to China and Japan, Korea’s cultural heritage is
defined by its simplicity and closeness to nature.

Korea’s cultural relics coexist with a forest of high-rise buildings, most notably in the capital.
Seoul has been the capital city of Korea since its establishment in 1392, and has many
palaces like Gyeongbokgung, Changgyeonggung, Changdeokgung, and Deoksugung, as
well as royal tombs. Among these, Changdeokgung is a UNESCO-designated World Cultural
Heritage Site. Other UNESCO World Cultural Heritage Sites in Korea include Jongmyo (the
Korea’s official language is Korean. “Hangul” is the unique alphabet of the Korean language. Royal Shrine), Bulguksa Temple and Seokguram Grotto in Gyeongju, Goryeodaejanggyeong at
It was created by King Sejong of the Chosun Dynasty about 600 years ago. Until then, Korea Haeinsa Temple, Suwon Hwasung, the dolmen sites in Gochang, Hwasun and Ganghwa, and
used Chinese characters, which were not directly associated with Korean sounds. King Sejong, the Jeju Volcanic Island and Lava Tubes.
the alphabet’s inventor, sought to increase literacy among the populace and ordered scholars
to create a simpler phonetic alphabet that would accurately represent the native Korean Today, Korea is an industrialized nation with a strong high-tech sector. After the devastation of
language, and could be used instead of literary Chinese, a wholly different language that the Korean War, Koreans leveraged their innate potential to become the 13th largest economy
requires mastery of a very large number of characters. in the world.

“Taegukgi” is the national flag of the Republic of Korea. The white background of the national Possessing both ancient traditions and a strong modern work ethic, Korea continues to
flag symbolizes brightness, purity and peace, while the “Taeguk” pattern in the center be a land of promising opportunities. Today the nation is on the verge of extending its
represents the harmony of Yin and Yang in the world. The four corners of the flag are “Geun,” accomplishments from economic development to contributing globally to the prosperity of the
“Gon,” “Gam,” and “Ri,” which symbolize heaven, earth, water, and fire respectively. Asian continent and beyond.

The most widely known Korean cuisine is “kimchi,” which is a required dish at practically
every Korean meal. Although rice is the main staple, as it is elsewhere in Asia, rice is almost
invariably accompanied by kimchi. There are countless varieties of Kimchi for each region
and household. In addition, there are many kinds of foods made with Kimchi as the primary
ingredient. While Kimchi is hailed as the most representative food within Korean cuisine, Galbi
(grilled marinated beef ribs) tends to be favored by foreigners. Seasoned Galbi, cooked over a
tabletop grill, appeals to foreigners’ tastes, with Suwon being especially famous for this dish.

Korea’s history traditionally dates back the founding of “Gojoseon,” the first Korean kingdom,
by Dangun Wanggeom in 2333 BC. Since then, Korea’s ethnic identity has survived and

8 Korea at a Glance 9
I. Welcome to Korea

General Economic and Social Information As of 2007, Korea recorded USD 969.9 billion in GDP (nominal), ranking it 13th in the world.
GNI per capita was USD 20,045, up 8.9% from the previous year (USD 18,401). Korea’s
According to statistics released by the National Statistical Office (NSO), Korea had a population
economic growth rate was 5%.
of 48,607,000 and a growth rate of 0.31% in 2008. People 14 and under accounted for
17.4% of the population, people aged 15 to 64 accounted for 72.3%, and people 65 and
up accounted for 10.3%. Registered foreigner populations are also increasing. They totaled Korea’s GDP, GNI per Capita, Economic Growth Rate
850,000 in 2008, accounting for 1.8% of the overall population. Year Nominal GDP (KRW, Billion ) GNI per capita (USD) Economic growth rate (%)

2001 622,122.6 10,159 3.8

Demographic trends from 1990 to 2008 Unit: thousand persons

2002 684,263.5 11,497 7.0

2003 724,675.0 12,717 3.1

Total Registered 2004 779,380.5 14,206 4.7

Year Gender Age range
population foreigners
Men Women 0~14 15~64 65 and more 2005 810,515.9 16,413 4.2

1990 42,869 21,568 21,301 10,974 29,701 2,195 - 2006 847,876.4 18,401 5.1

2000 47,008 23,667 23,341 9,911 33,702 3,395 210 2007 901,188.7 20,045 5.0

* Source: Bank of Korea

2007 48,456 24,344 24,112 8,734 34,912 4,810 766

2008 48,607 24,416 24,191 8,458 35,133 5,016 854

Korea was an agricultural country as recently as a few decades ago. The massive
* Source:
transformation in the country’s industrial infrastructure is a testament to Korea’s rapid
economic development. Agriculture, forestry, and fisheries, which accounted for 26.6% of the
Koreans work an average of 43.5 hours a week, and 22.2 days a month. Total work time is
national economy in 1974, shrank to 3% in 2007, while the manufacturing industry rose to
on a declining trend. As of 2008, the economically active population was 24,347,000 and the
27.9% from 21.6% and the service industry to 57.6% from 45% over the same period.
employed population was 23,577,000. The unemployment rate was 3.2%.

In 2008, 99.0% of children of the appropriate age attended elementary school; 93.2% were Transformation in Korea’s industrial structure Unit: %

in middle school; and 90.0% were in high school. 99.9% of elementary school graduates Agriculture, Forestry, Mining and Electricity, Gas and Construction Service
and Fishery Industries Manufacturing Utilities Industry Industry
advanced to middle school and 99.7% of middle school graduates went to high school. At the
post-secondary level, 67.2% of students received higher education, including attendance at 1974 26.6 23.3 (21.6) 0.7 4.3 45.0

universities. More and more children have been advancing to higher levels of education. This 1980 16.2 26.4 (24.4) 2.2 8.0 47.3

indicates that Korean parents place a strong emphasis on quality education for their children. 1990 8.9 28. 1(27.3) 2.1 11.3 49.5

2000 4.9 29.8 (29.4) 2.6 8.4 54.4

Koreans have enthusiastically embraced mobile telecommunications and high speed internet.
2007 3.0 28.3 (27.9) 2.3 8.9 57.6
Nine out of ten Koreans are mobile phone subscribers. As of 2008, the number of mobile phone
* Source: Bank of Korea
subscribers was about 45,600,000 persons, up 4.8% year-on-year, while subscribers of wired
telephone services numbered 22,000,000, down 4.3% from the previous year. Subscribers of
high speed internet numbered 14,710,000 as of 2007. This translates into 30.5 % of Koreans
subscribing to high speed internet services, the seventh highest after Denmark (35.1), the
Netherlands (34.8), Iceland (32.3), Norway (31.2), Switzerland (31.0) and Finland (30.7). With an
increasing number of internet subscribers, internet banking users have soared by 17.7%.

10 Korea at a Glance 11
I. Welcome to Korea

According to the National Statistical Office, the number of employees in agriculture, forestry, Major imports and exports of Korea (based on MTI 3 Unit) Unit: USD, million, %
and fisheries continues to decline every year. As of 2008, the total number of employees Exports Imports
in these industries was 1,686,000, representing 7.2% of the total number of employees,
2007 2008 2007 2008
or 23,577,000. The number of workers in the mining and manufacturing industries was
3,985,000 persons, accounting for 16.9%. These were almost all in manufacturing, with Item Amount Amount Growth Rate Item Amount Amount Growth Rate

the number of workers in mining accounting for only 0.1%. The number of workers in social Ships, Marine
27,777 43,157 55.4 Oil 60,324 85,855 42.3
Structures and Parts
infrastructure and other service industries accounted for 75.9%, or 17,906,000 persons.
23,966 37,573 56.8 Semiconductors 30,817 32,018 3.9
Korea is heavily dependent upon international trade. As of 2007, its dependence on Wireless Communications
30,458 35,713 17.3 Natural Gas 12,653 19,806 56.5
international trade reached almost 75%, ranking 15th in the world. Korea exported more than Devices

USD 422 billion and imported nearly USD 435 billion in 2008, for a total trading volume of Petrochemical
Automobiles 37,284 35,032 -6.0 11,969 17,534 46.5
USD 857 billion. This made Korea the world’s 11th largest trading nation.
Semiconductors 39,045 32,793 -16.0 Iron & Steel 10,150 17,203 69.5

Trading volume of Korea and other major partners (2007) Unit: USD, million
PDP and Sensors 16,929 18,732 10.6 Coal 6,445 12,810 98.8

Trading Volume Exports Imports Iron & Steel 12,375 15,948 28.9 Computers 9,896 9,723 -1.7
10 Korea 728,335 11 Korea 371,489 12 Korea 356,846
Alloy Iron, Pig Iron,
Plastics 13,000 14,909 14.7 5,913 7,960 34.6
1 America 3,179,960 1 Germany 1,329,050 1 America 2,016,980 Scrap Iron
Fine Chemical
2 Germany 2,388,690 2 China 1,217,790 2 Germany 1,059,640 Auto Parts 12,436 13,950 12.2 5,403 6,879 27.3
3 China 2,174,044 3 America 1,162,980 3 China 956,254
Computers 13,808 10,697 -22.5 Copper Products 6,658 6,288 -5.6
4 Japan 1,320,367 4 Japan 700,538 4 England 620,741
Total 371,489 422,007 13.6 Total 356,846 435,275 22.0
5 France 1,161,844 5 France 546,353 5 Japan 619,829

* Source: Korea in World, KITA

Among Korea’s exports, ships, marine structures, and parts have a majority share, followed by As a peninsular country with an impassable northern border, Korea’s exports and imports are
mobile communication devices like mobile phones, and automobiles, PDPs, and iron and steel transported entirely by ship and airplane. At present, Korea has 28 trading ports, including the
products. Crude oil takes up the largest share of imports. Natural gas is one of Korea's largest ports at Busan and Gwangyang, 8 international airports, and 7 domestic airports. The seaports
imports, illustrating Korea's high dependence on foreign energy resources. In addition to oil process 11.4 million ton yearly on average while airports handle 1.2 million ton.
and natural gas, Korea is also largely dependent upon imported raw materials like iron and

12 Korea at a Glance 13
II. Gateway to Northeast Asia
Korea, the Logistics Hub of Northeast Asia
Sea Transport
Air Transport
Rail Transport
Land Transport
Free Economic Zones
Free Trade Zones
Advanced IT, HR Infrastructure for a Logistics Hub
The Logistics Industry in Korea
II. Gateway to Northeast Asia

Korea, the Logistics Hub Overseas

Free Economic Zones
Foreign investment support facilities including commercial,
business and residential buildings

of Northeast Asia
Airport · Seaport Tariff-free Zones
Northeast Raw materials Carry-in
Asia and parts
• Assembly & Processing
Raw materials · Parts
• Sale & Exhibition
· Finished goods
Located in the heart of Northeast Asia, • Packing & Storage
The Finished Carry-out
Korea is well-positioned to serve as the logistics hub Americas goods
for your business.
•Ship, Aircraft Repair Nearby industrial
Europe Transshipment •Oil, Ship Supplies complexes

Concentration of related industries including ship trafficking,

Trans-Manchuria Trans-Siberian insurance, finance, logistics education, and research institutes
Railway Railway


Trans-Mongolia Vladivostok A logistics hub acts as a stronghold where multinational companies may establish regional
Railway Shenyang
Nakhodka headquarters or centers in the hinterlands near well-established regional airports or seaports.
Dalian North American Companies can provide value-added logistics services like manufacturing, assembly,
Trans-China processing, packing, and labeling using raw materials, components, and assembled goods
Railway Niigata
Trans-Korea throughout Northeast Asia.
Railway Kannazawa
Kobe Nagoya Tokyo
Lianyungang Yokohama
Osaka Amsterdam and Rotterdam in Europe, Singapore and Hong Kong in Southeast Asia, and Dubai
in the Middle East have developed into logistics hubs for their economic zones. Northeast Asia,
a major economic zone that includes China and Japan, where about 1.5 billion people reside,
leads global economic growth. In 2000, the total production of Northeast Asia accounted for
European Route nearly 21% of world production, and is expected to increase to 30% by 2020.

For China, now the “factory for the world,” demand for mid-to high-quality materials,
components, semi-finished goods, and finished goods is rapidly rising. China has become
heavily dependent upon foreign intermediate materials and finished goods commensurate with
its increasing income and purchasing power. Companies in the Americas and Europe, which
Multinational companies and international logistics service providers are now building a intend to supply intermediate materials and finished goods, are in dire need of international
global network of major airports and seaports on each continent as they expand their scope logistics strongholds to provide fast and cost-effective services in Northeast Asia.
of business. Regions with superior logistics infrastructure that can provide efficient logistics
services will emerge as logistics hubs. However, Northeast Asia differs from North America and Europe in that there has been no
distinctive logistics center in the region until recently. Northeast Asia is neither a single market
A logistics hub serves as a base that provides services to neighboring areas in a global nor a unified one; it has diverse sub-regions. One logistics hub may not fully cover this entire
logistics system that connects regional economic zones. In this respect, a logistics hub in region. There must be multiple hubs. The approach to the region must be segmented, and
Northeast Asia is a center (or headquarters) of global logistics and also serves as a gateway to response to market demands must be made in a timely fashion.
the region.

16 Korea, the Logistics Hub of Northeast Asia 17

II. Gateway to Northeast Asia

Logistics centers in Hong Kong, Taiwan, and Shenzhen provide international logistics services trade can be carried out without obstacles.
in the southern part of China while Shanghai works as an international logistics hub in the
central region. In a free trade zone, companies can bring in cleaning, labeling, processing, assembling, and
re-packaging services, without being subject to customs clearance proceedings. They can also
Concurrently, Korea is growing as an international logistics stronghold by providing frequent exhibit or re-export them.
marine and air transportation services in the northeastern part of China, the western coast of
Japan, and the Far East of Russia. The southern part of the Korean Peninsula is situated on Busan, which ranks fifth in terms of container traffic, and Busan New Port are located on the
the global “trunk route” and the expansion of the northeast transportation network through “trunk route” to the world, connecting major cities in Northeast Asia (including Japan and
Incheon International airport and sea ports like Busan, Gwangyang, and Incheon raise the China) to provide the best logistics services. A “marine silkroad” is already open that links
connectivity of airports and seaports in the region. ports in Korea with the world via routes to Europe, America, Northeast Asia, China, and Japan.
Korean ports are located between China and Japan, two economic powerhouses, while Busan
Incheon International Airport has high competitiveness backed by its geographic advantages. It and Gwangyang are interconnected with the Northeast region via finely segmented routes.
connects Asia with North America and Europe. The airport handled 2.3 million tons of freight in The two ports link with 45 ports in China, 60 ports in Japan and 5 ports in Russia. Moreover,
2008, making this airport rank 2nd for three consecutive years from 2006. It is a genuine hub Korean ports have a geographic advantage in that they can serve as a gateway to China and
in terms of transshipment volumes to North America, China, and Northeast Asia. Europe via the railroad system of North Korea.

Incheon International Airport attracts more air cargo with other key advantages: a shorter The hinterland of the logistics complexes for Busan Port and Gwangyang Port have attracted
distance from Northeast Asia to New York (11,000 km from Incheon compared to 13,000 km investment from around 40 companies in the logistics and manufacturing industries in a
from Hong Kong and 15,000 km from Singapore), plus connectivity with 51 cities with more number of consortiums. The areas surrounding the Busan New Port, for example, have already
than one million people within 3.5 hours of flight time or less. completed selection of tenant companies for 2009.

As of October 2008, 61 airlines provide service to Incheon International Airport linking 157 As for customs clearance, the major administrative service in international logistics, Korea
cities in 49 countries. In particular, Incheon International Airport offers flight services to 33 has shortened the freight clearance time to world standard levels by implementing a Real-
cities in China and 26 cities in Japan, providing superior connectivity within the region. In Time Freight Management System and a round-the-clock clearance system. Clearance time
addition, Asiana and Korean Air, which are based at the airport, operate a greater number was dramatically shortened to 4.4 days in 2006 from 9.6 days in 2003, while immigration
of routes and flights than Chinese or Japanese airlines, thus providing a highly competitive time was also shortened to 21 minutes in 2006 from 40 minutes in 2003, almost half the
network. International Civil Aviation Organization (ICAO)’s recommendation, 45 minutes.

Incheon International Airport, which went into service in 2001, opened its airport logistics Against this backdrop, Korea can link the entire area of Northeast Asia with the world using
complex, covering 470,000 m², in March 2006 to support value added activities for logistics airports, seaports, and the surrounding free trade zones in a swift and efficient manner while
companies. The second stage of the expansion project is currently underway. As of December still ensuring top-notch service, including prompt immigration and clearance.
2008, a total of 15 companies (individual companies and consortiums) have decided to move
into the first area of the Airport LogisPark in the Free Trade Zone at the airport, and 76% of
leasing has been completed.

A free trade zone is a special area within a country where normal trade barriers are eliminated
to facilitate international trade and commerce. In this area, trade is exempt from tariffs and
taxes, and bureaucratic requirements are reduced. Manufacturing, logistics, distribution, and

18 Korea, the Logistics Hub of Northeast Asia 19

II. Gateway to Northeast Asia

Sea Transport The Port of Busan

The 1990’s have seen East Asia take the lead in the world
economy. Three Northeast Asian countries in particular (China,
Japan, and Korea) have accounted for much of the dynamism East Sea
of the global economy for the past few decades.

Yellow Sea
Multinational corporations in the United States and Europe are
accordingly making strong efforts to expand their presence Busan Port
Sokcho Port
in East Asia. With strong and educated human resources,
skilled manpower, and comparatively high levels of openness
and transparency, Northeast Asia is an attractive market and investment destination for many
Donghae Port multinational firms. With high productivity and continuously expanding consumption, backed
Incheon Port
by investment from the public and private sector, and constantly increasing disposable income,
PyeongtaekDangjin Port Asia is continuing to expand its role as a favored production and consumption base for the
world’s companies.

Global companies are rushing to Northeast Asia because the regional economy has maintained
Pohang Port
and sustained its vitality. The region supplies and processes vast quantities of semi-finished
Gunsan Port
and finished products that are then distributed worldwide. As Supply Chain Management
becomes more widely adopted by global companies, efficient cross-border logistics has grown
Ulsan Port more critical. In this context, Korea has become recognized as a nation that can satisfy the
Busan Port
logistics needs of global companies.
Masan Port
Gwangyang Port

20 Sea Transports 21
II. Gateway to Northeast Asia

Centrally located between China and Japan, Korea is well situated as a gateway to East Asia.
The Port of Busan is the logistics hub that facilitates such functions.

The Port of Busan is one of the world’s largest container ports, handling 13.5 million TEU in
2008. It is also the largest port in Korea, with annual container traffic exceeding 240 million
tons, and accounts for 66% of total exports and imports. The transshipment container traffic
of Port of Busan is 6 million TEU, representing 45% of total traffic, greater than Shanghai,
Shenzhen, Qingdao, Kobe and Yokohama.

With its geographic advantages, the Port of Busan offers sea route linkages with most of Japan
and China. It operates routes to all 57 ports in Japan and provides 57 shipping services a week,
more than feeder services that connect large ports like Tokyo, Yokohama, Osaka, Kobe, Nagoya,
and Kitakyushu with regional ports in Japan. It also boasts lower shipping charges.

There is a trend for large importers in Japan to move their logistics centers from Japanese
ports to the hinterland of the Port of Busan. The main reason behind this shift is Busan’s
excellent connectivity and strong cost competitiveness. terminals in expectation that the new port will be a logistics hub in Northeast Asia (DPW has a
25% stake and PSA Corporation has 16.2% stake).
China is not an exception to this trend. China’s 17 manufacturing and logistics bases --
including Shanghai, Shenzhen, Qingdao, Dalian, and Ningbo -- are connected to the Port of In 2009, Hanjin Shipping Company and Hyundai Merchant Marine Co., two global carriers,
Busan. The port provides more than 46 shipping services a week. opened a terminal 16 m deep which is expected to reinforce the role of the new port as a hub
in Northeast Asia.
The Port of Busan’s value does not lie exclusively with its connectivity between large-scale
ships and feeder ships, or with its cost competitiveness. Its excellent port facilities and high Busan New Port operates 13 berths more than 16 m deep as of 2009. The port stretches
productivity have also attracted shipping companies to the port. North Port, which performs 4,300 m without a curve or corner, making it the longest straight port in the world. With
the major functions of the Port of Busan, operates 14 berths more than 14m deep and 9 continued port development, the port will have thirty 16 m deep berths by 2016. Since the
berths more than 15m deep, which together accommodate 8,000 TEU container vessels. High port is sufficiently distant from downtown, local traffic does not interfere with port traffic flow.
efficiency standards have led to the handling of more than 700,000 TEU per berth. To make With the hinterland complex covering 1.9 million m² right behind the port, the flow between
up for the lack of container yards in the terminal, there are off-dock container yards scattered the complex and terminal is very smooth. Moreover, transshipment is efficient as 30 berths
around Busan to support port functions. are concentrated in a single site. The excellent port design makes the Busan New Port very
attractive to shipping companies.
The North Port had space limits due to constant arrivals and heavy container traffic. A new
port development project was then pursued to facilitate smooth handling of the increased The surrounding logistics complex at the Port of Busan is designated as a free trade zone.
traffic load. The new port was built on Gadeok Island, 25 km away from the Port of Busan. This Global shipping companies operating in Northeast Asia have set up their international logistics
newly built port has been in service since 2007. The port was named the Busan New Port, bases in the hinterland of the Port of Busan. Japan’s Mitsui Trading, Holland’s C. Steinweg
though it was administratively located near the border between Busan and neighboring cities. (the largest warehouse operator for the London Metal Exchange), Hong Kong’s Kerry Logistics,
The new port has an extensive hinterland away from downtown. Global terminal operators like Japan’s Shimonoseki Sea Land Transportation, Date-Japan, and Fukuoka Transportation have
PSA Corporation and DP World participated in the terminal development and are operating the already established warehouses and logistics operations in this area.

22 Sea Transports 23
II. Gateway to Northeast Asia

■ Container throughput of the world ports ■ Busan Port container throughput flow trend Port World (DPW). Hanjin Shipping began operating four berths beginning in 2009, while
(Unit: 1,000 TEU) (Unit: 1,000 TEU) Hyundai Merchant Co. opened four berths in the second half of 2009. At North Port, Korea
Express, Sebang, Dongbu Express/Evergreen, and Shinsundae Container Terminal (PECT) run

2008 11%

2007 10.4% 3.1%

large berths while Unikai Container Terminal (UCT), Kukje Transportation, Hanjin Shipping, and


Dongbang operate feeder terminals, respectively.


Originally, the Port of Busan was developed, managed, and operated by the Korean government,




but bureaucratic requirements hampered efficient management and operation. Against this
backdrop, port management was revamped to improve operational efficiency, respond more
ore ha
i ng en ou m o
ap ng Ko zh n i gb
o ng
zh rda ngta 2004 2005 2006 2007 2008 quickly to user needs, and enhance international competitiveness. As a result, the Busan Port
ing ha ng en sa ba ua tte i
S S Ho Sh . Bu Du Nin G Ro .Q
1. 2. 3. 4 . 5 6 . 7 . 8. 9 . 10
Authority (BPA) was established. The BPA is a public corporation established in January 2003
that manages the port on a self-sustained basis. The BPA’s major functions include development
and management of port facilities and facilities in the surrounding area, and the recruitment
North Port and the New Port of Busan are located on the main “trunk route.” It takes only
of shipping companies, ship owners, and logistics firms. More than 10 years before the
60 minutes at North Port and 90 minutes at the New Port to enter the terminal after a pilot
establishment of the Authority, the Port of Busan adopted a leasing system and developed into a
boards. This takes less time than at Shanghai, which requires more than three hours for
landlord port as in advanced nations. This system was further reinforced by the BPA. The BPA
processing after a ship has departed. The Port of Busan is much favored by large-sized ships
as a landlord, leases terminals to shipping companies and stevedores. The BPA has taken the
that operate on tight schedules.
initiative in working as a bridge between the central government and local governments, building
port infrastructure and facilities, and attracting investments from the private sector to increase
The Port of Busan is linked with Seoul, which has the largest shipping demand, and its
profit for related companies and contribute to the local community.
metropolitan area is served via several expressways. It takes less than five minutes from the
port terminal to the expressway. All container terminals have access to railroad services. For
Shipping and port industries historically
inland transportation, both expressways or railroads are available. The farthest point in the
developed in the Port of Busan. Korea’s first
metropolitan area from the Port of Busan is only 416 km away, taking five hours on weekdays
shipbuilding yard and ship repair yard were
and eight hours on weekends by truck.
established in the area. Though large-scale
shipbuilders like Hyundai Heavy Industries,
The Port of Busan is situated in the southeast of Korea, and has four seasons. The
Samsung Heavy Industries, and Daewoo
temperature falls below zero only for a few days in winter when it is exceptionally windy. The
Shipbuilding & Marine Engineering established
temperature goes beyond 30 degrees Celsius for only a few days in a row in the summertime.
their dockyards near the area, there are also
Korea's summer is not long and the temperature does not exceed that of Tokyo, Yokohama,
many small to mid-sized yards like Hanjin
Osaka, Kobe, and Nagoya, where it is also hot and humid. Qingdao and Tianjin have yellow
Heavy Industries. Ships that require repair
dust problems in spring, Shanghai has much fog, and the temperature often falls below zero
may procure parts and services from the
in Dalian. Productivity is frequently hampered in these regions, and shipping schedules are
Port of Busan at a reasonable price. World-
hard to readjust. The Port of Busan, however, operates 24 hours, seven days a week, and can
class ship supply manufacturers provide parts
conform to tight shipping schedules.
and components for shipbuilding yards and
ship repair yards, including Hyundai Heavy
Hutchison Korea Terminals, a wholly-owned subsidiary established in 2002 by Hutchison Ports
Industries, Samsung Heavy Industries, and
Holding (HPH) a Hong Kong global terminal operator, runs two terminals and six berths. Port
Daewoo Shipbuilding & Marine Engineering.
of Singapore Authority (PSA) Corporation runs one terminal and nine berths jointly with Dubai

24 Sea Transports 25
II. Gateway to Northeast Asia

The Port of Busan has excellent bunker supplies. Ulsan and Yeosu, which are the bunker Container Terminal facilities of Busan New Port
suppliers, are only 65 km and 205 km away, respectively. The bunker supply is stable because Operator Berth length Water depth No of GC Opening year
there are sufficient storage tanks. Premium bunkers produced by SK Energy, S-Oil, and GS 2,000m
DPW/PSA -16m~16m 25 2006~2009
Caltex produce quality oil. The prices of Korean bunkers are also the lowest in East Asia outside 1,200m

Singapore, so Korean bunkers are favored by shipping companies. As a result, sale of bunkers Hanjin Shipping 1,100m -16m 10 2009

ranks second to Singapore in Asia. Hyundai Merchant Marine 1,150m -17m 9 2009

Korea Shipping/ZIM/Kukje Express 1,400m -15m 9 2011

BPA is expanding its international network to offer world-class services to global shippers and
Hanjin Shipping, K Line, YM 1,050m -15m 9 2011
logistics companies. BPA undertook efforts to join the Nakhodka container terminal development
BPA 1,500m -15m 9 2016
project in far eastern Russia. It also signed a Memorandum of Understanding for ICD
development in Mudanjiang Shi and Suifenhe in Heilongjang Province, China. It also exchanged
MOUs with Algeciras Port of Spain, Niigata Port of Japan, and Dalian Port and Dafeng Port in Cost competitiveness of the port of busan
Port Busan Hong Kong Singapore Kobe Yokohama Kaohsiung Shanghai

Container route network for the port of busan Cost Quotient 100 322 186 277 263 107 106

Shipping companies - 78 shipping companies

- 57 routes with Japan

- 31 routes with South America
- 46 routes with China
- 22 routes with Europe
Route network - 16 routes with Russia
- 17 routes with Australia
- 68 routes with Southeast Asia
- 7 routes with the Middle East
- 38 routes with North America

Container Terminal facilities of the North port at busan

Terminal Operator Berth length Water depth No of GC

Korea Express/
Busan Gamman Container Terminal 700m -15m 8
Hutchison Korea Terminals

Busan International Container Terminal Hanjin Shipping/Sebang 700m -15m 7

Shinshundae Terminal PECT 1,500m -14m~16m 14

Hutchison Busan Container Terminal Hutchison Korea Terminals 1,447m -15m 14

Dongbu Busan Container Terminal Dongbu Express/Evergreen 848m -15m 7

Kamchun Container Terminal Hanjin Shipping 500m -13m 5

UCT KCTC/Kukbo 500m -11m 5

Hanjin Trasportation/
3rd Terminal 995m -7.5m~9.5m 8
Korea Express/Donjin

4th Terminal Kukje Express/DongBang 1,311m -7.5m~9.5m 8

7th Terminal Dongkuk Transportation 645m -6m~12.5m 3

26 Sea Transports 27
II. Gateway to Northeast Asia

The Port of Gwangyang This, however, has enabled the Port of Gwangyang to capitalize on port terminals and the
surrounding areas. Currently, fourteen berths are in service at a depth of 15m, with available
The Port of Gwangyang was developed by the Korean terminal length of 600 m.
government to carry out hub functions in Northeast Asia in
conjunction with the Port of Busan. While the Port of Busan Logistic warehouses have been continuously refurbished behind the terminal while a spacious
East Sea
has been used for centuries, the Port of Gwangyang is an hinterland has been built across the road. The port terminals and surrounding areas are also
entirely new port planned by the Korean government in the Yellow Sea away from downtown, so transportation is not hampered by downtown traffic.
1980s. When Korea hosted the Seoul Olympic Games in Gwangyang Port
1988, the Port of Busan suffered from severe congestion. The port of Gwangyang has highly competitive infrastructure due to the active efforts of the
The Korean government accordingly selected a new site and government, the local community, and the Korea Container Terminal Authority. Expressways
developed a new port in response to the needs of shipping to the port terminals link the Seoul metropolitan area with the rest of the nation. Transport
companies, shippers, and trading companies. Since Busan was already a large metropolitan takes five hours to Seoul, which is 360 km away, on weekdays and seven hours on weekends.
city, making it difficult to build new roads and new port facilities, the Korean government Behind the terminal is a freight railroad station, with more than 20 trains in service each day.
opted to develop the Port of Gwangyang to provide an alternative to shippers and shipping
companies. The biggest strength of the Port of Gwangyang lies in its usage costs. The port is located at
the farthest point inside Gwangyang Bay. The entrance is close to the main trunk passage and
Gwangyang, situated in the southwestern part of the Korean peninsula, is only 35 km away requires 80 minutes to the container terminal after a pilot boards. A breakwater is not needed
from Yeocheon Petrochemical Industrial Complex, the second largest industrial complex in because the water is calm. The land surrounding the bay on the left and Namhae Island on the
Korea. The complex houses crude oil tanks, oil refinery plants, and chemical manufacturing right breaks high waves, making it well suited for port construction. As a result, low costs and
facilities, including GS Caltex, Korea Dow Chemical, Gumho Mitsui Chemical, and Korea BASF. low terminal rents ensure the port has optimal price competitiveness.
The area has comparatively few manufacturing companies outside this complex.
Capitalizing on its cost competitiveness, spacious terminal yard, and expansive hinterlands,
Hutchison Ports Holdings (HPH), a global terminal operator, established a wholly-owned
subsidiary, Hutchison Korea Terminals (HKT), and leased one berth in 2002. In addition, HPH
secured four berths in 2004 via Korea International Terminals where it holds an 80% stake
(Hyundai Merchant Marine, and Hanjin Shipping hold 10% stakes, respectively.).

In 2008, ten years after its opening in 1998, the Port of Gwangyang handled 1.8 million TEU
despite the global financial crisis that engulfed the world, putting it on a footing with Kobe and
Osaka. This performance is especially remarkable when considering that the Japanese ports
have operated for centuries.

The Port of Gwangyang offers frequent ocean routes to North America, Europe, the Middle
East, and Latin America. Currently, global shipping companies like Maersk, HMM, Hanjin
Shipping CMA, APL, and IRISL offer route services to global regions in addition to feeder
services linking with Japan and China. Gwangyang offers ten routes to ten different ports in
China, including Shanghai, Ningbo, Dalian, Qingdao, and Xingang. The port is linked with nine
ports in Japan including Tokyo, Yokohama and Nagoya. Depending on the port, various route

28 Sea Transports 29
II. Gateway to Northeast Asia

services are available in a typical week. Service is available at Container Terminal facilities at the port of Gwangyang
all times, without significant waits. Classification Total Phase 1 Phase 2 Terminal 1 Phase 3 Terminal 2 Phase 3 Terminal 1

Project period '87.~'97 '95.~'01 ~'03. '99.~'07

Recently, more and more cargo exported to Japan from Operations
'98. 7~ '98. 7. 2002. 4. 2004.10. 2007. 3.
Southeast Asia and China passes through the hinterlands of started

Gwangyang. This is because large warehouses are located in Korea Express

ICT(Sebang+Hanjin KIT
Operating Keonsosium (STX-
Shipping) Dongbu Express (Korea International
these areas and it is more advantageous to provide logistics company
Hutchison Korea, KIT Terminal)
Panocean, Korea
services at Gwangyang than at a Japanese port. Gwangyang’s
Berth length 5,100 m 1,400 m 1,150 m 1,150 m 1,400 m
hub port capabilities are evident in the London Metal Exchange
Front water
(LME) warehouse situated at the Port of Gwangyang. Sebang 16 m -15 m~16 m -16 m -16 m -17 m
Co., Ltd. attracted an LME warehouse in early 2000. Handling
5,480,000 1,600,000 1,140,000 1,140,000 1,600,000
capacity (TEU)
50,000 DWT × 12 50,000 DWT × 2 50,000 DWT × 2
The advantages of the Port of Gwangyang are not confined capacity
20,000 DWT × 4
50,000 DWT × 4
20,000 DWT × 2 20,000 DWT × 2
50,000 DWT × 4
(No. of ships)
to ample port facilities and high levels of infrastructure. A site
Site area 2,746 km² 840 km² 533 m² 533 km² 840 km²
covering 3.7 million m² is being built near the port, with the - CY Area 1,609 km² 500 km² 259 km² 321 km² 529 km²
- Building area 89 km² 36 km² 21 km² 13km² 19 km²
entire area designated as a free trade zone. Low port usage - CFS 42 km² 21.1 km² 10.5 km² 5.3 km² 5.4 km²
charges, spacious hinterland and the designation of free trade
zones make the port one of the most attractive in Northeast
Asia. Hinterland development plan for the port of Gwangyang

Facility usage Area (1,000 m²) Construction time

Gwangyang does not simply function as a container port. The port is one of the areas that
East (development completed) 1,950 ~2008
surround Gwangyang Bay. From the left of the bay entrance are Yeosu, Yeocheon, Gwangyang, West (Under development) 1,930 ~2011
Total 3,880 ~2011
and Namhae. Among these, Yeosu serves as a fishing port and general cargo terminal, and is
Logistics Complex 2,306
the venue where the Yeosu Expo will be held in 2012. It is warm and mild even in winter and Support facility 285 2006~2015
the temperature does not fall below zero. It has attractive scenery and a clean environment, Public facility 1,289

making it a popular tourist attraction. Total 3,880

Yeocheon, 20 km to the north of Yeosu, houses the second largest petrochemical industry
complex in Korea. It is possible to berth 300,000 DWT VLCC in Yeocheon, and it has long been
regarded as an optimal port for transshipment of petroleum due to its excellent and stable water
conditions. Gwangyang lies at the farthest point of Gwangyang Bay, and has container terminals
where POSCO’s Gwangyang Steel Works, the largest integrated steelworks, operates.

POSCO has an annual production capacity of 17.4 million tons and operates a large-scale,
2,063 m long berth for bringing in raw materials like iron ore, bituminous coal, and limestone,
and a 1,980 m long berth for the export of steel products. Thus, Gwangyang Bay, consisting
of Yeosu, Yeocheon, Gwangyang and POSCO terminal handled 217 million tons in 2008,
following the Port of Busan in terms of cargo traffic in Korea.

30 Sea Transports 31
II. Gateway to Northeast Asia

Incheon, situated on the Yellow Sea, has more difficulty in securing adequate water depth
than the Port of Busan or the Port of Gwangyang located to the south. This problem is shared,
with Qingdao, Dalian, Tianjin, and Shanghai on the Yellow Sea. Large vessels face difficulty
in berthing at the northeastern ports in China. To deal with this problem, the Port of Incheon
has established lock gates that can overcome tidal gaps of up to 10 m. The lock gate is
the biggest in the world, with 50,000 ton vessels (32.3m wide, 230m long, 18.5m deep)
and 10,000 ton vessels (19.2 m wide, 150 m long, 18.5 m deep) able to pass through. A
maximum of 45 vessels pass through the lock gate each day. Eight terminals operate inside
of the lock gate. Terminals 1, 2, 3, 6, and 8 are for general cargo from the lock, terminal 4 for
containers, terminal 5 for automobiles, and terminal 7 for grain.

There is a South Port, a North Port, and a coal port in operation outside. Oil, liquid gas, coal,
sand, and ferrous scrap, which are difficult to handle in the lock gate, are handled outside of it.

The container terminal inside of the lock has five berths at present, but operates an additional
six berths including two berths at the 14m deep container terminal outside the lock to facilitate
the smooth incoming and outgoing of container carriers. Korea Express, Sun Kwang of Korea
and PSA Corporation of Singapore are terminal operators. Recognizing the potential growth of
the port, PSA developed a terminal via the BOT method in 2001 and has operated two berths
since then. The water can stay 14 m deep even at ebb tide outside the lock.

The Port of Incheon

In response to the increasing container traffic at the Port of Incheon, the Korean government
The Port of Incheon is a gateway to Seoul (population: 11 and the Port of Incheon Authority (IPA) acquired the site 15 km away from the dock and
million) and its metropolitan area (25 million population), at are building the New Port of Incheon on it. They undertook to develop six 14m deep large
only 35 km from Seoul. The Port of Incheon is situated in East Sea container terminals in 2008. When the new port is completed in 2011, the handling capacity
the central/western part of the Korean Peninsula and is the of the Port of Incheon will increase up to four million TEU.
Incheon Port
closest to China. The port is 250 miles by sea to Dalian, 313
Yellow Sea
miles to Qingdao, and 448 miles to Shanghai. It takes 15
hours from the Port of Incheon to Dalian, 18 hours to Qingdao, As there are residential and commercial facilities around the lock of the Port of Incheon, the
and 26 hours to Shanghai by a container carrier. space for logistics facilities has become insufficient and traffic has become more congested.
These conditions work to weaken the competitiveness of Incheon, and account for the
stagnant growth of the Port of Incheon from the 1990’s to the early 2000’s, unlike other
The Port of Incheon offers routes linking all the ports in China. It has opened container route ports in Northeast Asia. However, the Korean government has strongly realized the need to
to 12 Chinese ports like Shanghai, Yantai, Ningbo, Qingdao, Dalian, Xiamen, and Dandong and cultivate growth potential in East Asia, particularly in the Yellow Sea area. To increase port
six shipping services are available throughout the week, so the shippers do not need to wait at competitiveness, the Korean government reformed the port management system in 2005
the port. Car ferry service is also available to Dalian, Rongcheng, Tianjin, Qingdao, Weihai, and and established the Port of Incheon Authority. Like the BPA, the IPA was inaugurated as a
Dandong. Incheon has such close ties with China that 70% of container traffic handled at the public organization. It coordinates the opinions of the community and parties of interest, and
Port of Incheon is bound to or from China. manages the port using corporate management principles.

32 Sea Transports 33
II. Gateway to Northeast Asia

Since its establishment as a public organization, the IPA has focused on expanding the Shandong and Changshu Provinces are the main places where the largest demand for freight
surrounding logistics complex, which was the weakest point in the Port of Incheon. Currently, transport occurs. The cargo passes through Qingdao, Weihai, Tianjin, Dalian, or Shanghai
the surrounding area complex of more than 1.5 million m² is being built, and a site of 3.7 ports. These ports provide frequent car ferry and container shipping services to the Port of
million m² will be completed as the hinterland of the New Port of Incheon by 2020. The IPA is Incheon. When the cargo passes through the Port of Incheon and Incheon International Airport,
soliciting logistics companies with phased completion of the surrounding area complex. Many it only takes 3 to 4 days from China to North America and 4 to 5 days to Europe. This route is
companies are now competing to move into the complex and the port’s surrounding area site very popular and its traffic is increasing every year, taking on 6,692 TEU in 2007 and 9,778
has been designated as a free trade zone. This underscores the high growth potential of the TEU in 2008. Marine and air intermodal transport via the Port of Incheon can be attributed to
Port of Incheon in the future, as all surrounding areas are free trade zones. lack of transport capacity in Chinese airports, lack of land infrastructure in China, and excellent
facilities and service from the Port of Incheon and Incheon International Airport. Accordingly,
intermodal transport via the Port of Incheon and Incheon International Airport is expected to
The Port of Incheon hopes to become the logistics hub of the Yellow Sea Zone. The Port
maintain its upward momentum.
of Incheon reformed the old labor system to improve labor productivity in 2007 when the
port laborers were decasualized. The Port of Incheon has served as a base for importing
foods (grain), raw materials (sand, oil, gas, etc.), and daily necessities that will be supplied Container Terminal facilities at the port of incheon
to residents in the metropolitan areas of Korea. This includes grain from the United States,
Terminal Operator Berth length Water depth No of GC Location
Brazil, and China, lumber from Indonesia, the Russian Far East, and Canada, scrap iron from
ICT PSA Coporation 600m -14m 5 South Port
the Americas and Africa, raw animal feed from Southeast Asia, LNG from Indonesia and
Brunei, and anthracite coal from China and Russia. Steel products and 400,000 automobiles SICT Sunkwang 407m -11m 4 South Port

produced by GM Daewoo and Ssangyong Motors are bound for China, Japan, and Southeast KESCT Korea Express 225m -7.5m 2 South Port

Asia via the Port of Incheon. As Incheon handles more than 70 million tons of bulk cargo every E1CT E1 259m -12m 3 South Port
year, the lock is very important. Korea Express 535m -11m 3 Inner Port
4th Terminal
Hanjin Transportation 625m -11m 3 Inner Port

The Port of Incheon is now transferring its functions to the outer harbor from the inner harbor.
The inner harbor already has highly concentrated residential buildings and traffic congestion. Container traffic trends (1,000 TEU)
The outer harbor, however, has already shortened service time by a minimum of five hours
Year Import Export Transshipment Coastal Total
when using terminals in the dock and can offer speedier and more effective services to
2000 274 210 0 128 611
container carriers and shippers who prioritize rapid delivery. The Port of Incheon serves as a 2001 308 229 1 125 663
passage for marine and air intermodal transport. Cargo that requires speedy transport from 2002 359 292 2 117 770
2003 392 317 3 108 821
China to Europe and the Americas passes through the Port of Incheon (traveling from China to 2004 451 377 5 102 935
the Port of Incheon, then Incheon International Airport, and then Europe/the Americas). 2005 558 498 6 86 1,149
2006 695 637 13 33 1,377
2007 834 793 18 18 1,664
2008 857 810 24 12 1,703

34 Sea Transports 35
II. Gateway to Northeast Asia

The Port of Pyeongtaek · Dangjin The Port of Pyeongtaek·Dangjin is emerging as a third steel port in Korea. Dangjin is located
on the right when entering the Asan Bay entrance from the Yellow Sea. Steel makers like
The Port of Pyeongtaek·Dangjin, situated on the western Hyundai Steel, a subsidiary of Hyundai Group, Dongkuk Steel Mill, and Dongbu Steel are
coast, is only 75 km to the south of the Port of Incheon by closely located in Dangjin. The steelmakers import raw materials like iron ore, bituminous coal,
land. It serves as a gateway to the metropolitan area due to its and limestone, as well as semi-finished steel products and export the finished steel products
East Sea
location southwest of Seoul. The Port of Pyeongtaek·Dangjin to the overseas and domestic markets after processing them. New ports for raw materials and
was developed to supplement the functions of the Port steel products have been continuously added.
of Incheon as the port was expected to face difficulties in Pyeongtaek·Dangjin Port
expansion due to full use of port facilities within the lock Yellow Sea

at Incheon. With increasing trade and proximity to China, Container Terminal facilities at the port of Pyeongtaek·Dangjin
however, the Port of Pyeongtaek·Dangjin has emerged as a Terminal Operator Berth length Water depth No of GC Opening Date
strong port in its own right. Though it takes two to three hours to the port after a pilot boards Pyeongtaek Pyeongtaek Container Terminal 480m -12m
4 2005~2008
because it is situated at the farthest end of the Asan Bay, there are no waits because the port Container Terminal Corporation (PCTC) 560m -14m

has no lock. In addition, it has a very expansive surrounding area where new companies can Pyeongtaek I Port Dongbang 720m -12m 3 2009. 9

easily establish themselves. Unlike Seoul, Incheon in Gyeonggido, where traffic is congested
all the time, the port has few traffic issues, making road transportation rapid and convenient.
Container route from the port of Pyeongtaek·Dangjin to china
Currently, container terminals at the Port of Pyeongtaek·Dangjin are being continuously added. Ship Frequency Ports of Call
In 2000 when the container service was first provided, the traffic was only 988 TEU. Due to Three times a week Rizhao, Rongcheong, Qingdao, Weihai
the increase in trade volume and proximity with China, however, container traffic dramatically Twice a week Lianyungang
rose, reaching 356,000 TEU in 2008. As container traffic has increased at the Port of
Four times a week Qingdao
Pyeongtaek·Dangjin, container routes are following suit. In its early stages, the port provided
Three times a week Dalian, Shanghai
services to Dalian, Qingdao, Xingang, and Shanghai in China, but services have now expanded
Container Twice a week Xingang, Xianmen, Hong Kong
to include Haiphong in Vietnam, European ports, and the Atlantic coast of the Americas. The
port also provides car ferry services to Rizhao and Rongcheong in China. Hiphong, Weihai, Longkou, Guangzhou, Yantai, Shantou, Shidao, Dandong, Fuging,
Once a week
Ningbo, Malaysia, Turkey, Rumania, Ukraine, Egypt, New York, Willmington, Savannah

Container traffic Trends (1,000 TEU)

Year import Export T/S Total

2000 1 0.4 0 1
2001 11 10 0 21
2002 34 32 0 66
2003 77 75 0 152
2004 94 96 0 190
2005 111 116 0 228
2006 127 132 1 260
2007 160 156 2 319
2008 173 180 3 356

36 Sea Transports 37
II. Gateway to Northeast Asia

The Port of Ulsan Foreign investments in the chemical terminal facilities at the Port of Ulsan

Jeongil Stolthaven Taeyoung Horizon

Company Odfjell Terminal (Korea) Vopak Terminals Korea
Terminal Terminal Korea
The Port of Ulsan is the biggest industrial port in Korea
situated in the southeastern part of the Korean Peninsula. Joint investment with Stolt- Joint form Horizon
Investment Joint investment with
Haven and Jungil Tank Vopak’s stake 51% Terminal and Taeyoung
Share Odfjell (50:50)
It has 96 berths (16.4 km) including five berths that can East Sea
(50:50) Industry(50:50)
accommodate a maximum of 350,000 DWT vessels. It is the
40,000 DWT × 1
40,000 DWT × 1 30,000 DWT × 1 30,000 DWT × 1
biggest port for petroleum and chemical products in East Asia Port facility
20,000 DWT × 1
20,000 DWT × 2
20,000 DWT × 1 8,000 DWT × 1
Yellow Sea 3,000 DWT × 1
as the largest petrochemical industrial complex is nearby and
oil refineries like SK Energy and S-Oil are located in Ulsan. Ulsan Port 64 units, 136 units, 140 units, 16 units,
170,970 m³ 526,000 m³ 261,100 m³ 99,100 m³
The Port of Ulsan handles 135 million tons of liquid cargo
annually, which accounts for 79% of the total cargo (170
million tons) handled by the port or 39% of the total liquid cargo (345 million tons) in Korea. Currently, chemical shipping lines like Odfjell and Stolt-Nielsen provide regular ocean services.
The Port of Ulsan is on the “trunk route” for transporting liquid cargo, and thus works as a On these lines services are available directly linking Houston, Los Angeles, Tokyo, Osaka,
strategic stronghold for international marine transportation. There are many tank terminals Ulsan, Ningbo, Yeosu, the Middle East, and Rotterdam. The following are the main routes.
operated by global tank terminal companies like Vopak, Odfjell, and Stolt-Haven.
Significant amounts of cargo are transshipped at Ulsan and most ships for transshipment are
Tank Terminals 30,000 to 60,000 DWT. Transshipped cargo is transported by feeder ships to ports in Japan,
Zhangjiagang, Nantong, Nanjing, Dalian and Qingdao in China, and Kaoshiung in Taiwan. A
Company Tanks (No. of units) Storage Capacity (1,000 ㎘)
ship carrying liquid cargo of less than 50,000 DWT can arrive or leave port at any time at
Korea Vopak 140 261 night. Loading and unloading are done throughout the year. Tokyo Bay and Osaka Bay in Japan
Taeyoung Industry 107 250
Jeongil Stolthaven 137 529 do not permit nighttime handling of liquid cargo and Ningbo in China does not allow chemical
Odfjell Korea 64 171 carriers to handle cargo operation during the night. The Port of Ulsan benefits carriers by
Dongbuk Chemical 37 199
offering cargo loading/unloading at any time and transport anywhere and at any time.
Taeyoung Horizon Terminal Korea 41 230

Total 526 1,640

Although the Port of Ulsan is the biggest liquid bulk port in Northeast Asia, it also handles dry
bulk cargo and containers. Dry bulk cargo includes woodchips, feed sub-materials, anthracite
The following are foreign-invested companies in the chemical terminal facilities at the Port of Ulsan. coal, and ore required by the hinterlands of the port. Container cargo mostly originates in

38 Sea Transports 39
II. Gateway to Northeast Asia

national industrial complexes. The cargo is bound to 38 ports in ten countries including
Japan, China, Southeast Asia, and the Middle East. The port handles 400,000 TEU containers
The Port of Pohang
annually. The Port of Pohang is located on the eastern coast of Korea
and in the southeast of the Korean peninsula. The port is
The Port of Ulsan has many private terminals in Korea. Hyundai Motor Company, the fifth the largest one for handling steel products, and handles
East Sea
largest auto maker in the world, runs an 830m long automobile-exclusive terminal that raw materials and products for steel makers. POSCO, the
loads one million cars annually. SK Energy and S-Oil run a marine berthing facility that can world’s largest steel works, is situated near the port. The
accommodate 350,000 DWT VLCC and a dolphin facility that can berth 3,000 to 50,000 steel works produces 13.7 million tons of steel annually. Iron Yellow Sea

DWT tankers. The biggest shipyard in the world, that of Hyundai Heavy Industries, is located in ore and bituminous coal are imported from Australia, Brazil, Pohang Port
Ulsan. and India. Large material carriers are up to 250,000 DWT.
Piers for raw materials are 19.5 m deep. Steel makers in the
The Port of Ulsan is both a commercial port and an industrial port. There are many private industrial complex, including Dongkuk Steel Mill, Hyundai Steel, and SeAh Steel, import semi-
terminals for oil refineries and petrochemical companies in Ulsan. In addition, as the port of finished products. Ships of 2,000 DWT (at minimum) enter the Port of Pohang from Japan and
Ulsan is a port for liquid cargo, many tank terminal operators are in service. As mentioned China while ships of 50,000 DWT arrive at the port from the Mediterranean Sea, Russia and
above, terminals have been historically operated by private companies at the port, so efficiency the Americas. Steel products like coils, steel billets, iron plates, and steel pipes produced by
in the Port of Ulsan is much higher than other ports. The Port of Ulsan is adopting various tenant companies in the steel industrial complex are exported to the world including Japan,
strategies to reinforce the role of liquid cargo ports in East Asia by concentrating its resources China, the Middle East, and Europe.
on serving as a hub for liquid cargo. To this end, the New Port of Ulsan and the surrounding
areas are under development and port facilities will be continuously expanded to respond to In addition to the steel industrial complex, Korea’s largest textile industrial complex and
customer needs. electronic industrial complex are located in Daegu and Gumi, which are 95 km and 125 km
away, respectively. To leverage geographic proximity to these complexes, a container terminal
Cargo handling trends is under construction. The container terminal, which will open in 2009, is 12 m deep and the
Unit: 1,000 ton
quay is 1,000m. It is expected to provide services to China, Japan, and Northeast Asia.
Liquid cargo
Year Refined Other Total
Crude Oil and ▒ Container terminal facilities
petroleum Chemical Gases Sub-total
Terminal Operator Berth length Water depth No of GC Opening Date
2000 62,389 41,396 15,629 4,258 123,672 27,395 151,067
2001 62,316 40,781 14,730 4,155 121,982 27,597 149,579
Pohang Yeong il New Port Pohang Yeong il New Port 1,000m -12m 2 2009. 8
2002 59,583 41,596 14,400 4,047 119,626 28,585 148,211
2003 59,077 38,130 14,860 4,474 116,541 29,601 146,142
2004 63,211 42,300 16,745 4,824 127,080 33,134 160,214
2005 63,652 44,121 16,731 4,667 129,171 33,243 162,414
2006 66,549 43,657 16,274 4,201 130,681 35,036 165,717
2007 64,482 43,819 18,412 3,531 130,244 38,408 168,652
2008 63,644 45,104 16,545 3,268 128,561 41,753 170,314

40 Sea Transports 41
II. Gateway to Northeast Asia

Other Seaports
The Port of Masan
The Port of Masan is located on the southern coast of the
Korean Peninsula. It is between the Port of Busan and the Port
of Gwangyang. The entrance routes to the Port of Masan are East Sea
on the same line with that of the Busan New Port, and located
20 miles farther than the Busan New Port.
Yellow Sea

The Port of Masan is near the city of Masan, Changwon, and Masan Port
Jinhae. The first free trade zone in Korea is located behind
the Port of Masan Terminal 3. Electric/electronic companies,
machinery makers, non-metal producers, textile companies, metal companies and precision
instrument manufacturers have settled in the complex. Multinational corporations such as
Nokia, Sony, and Sanyo moved into the Masan Free Trade Zone to bolster the local economy.

Machinery and metal equipment makers are mostly located in Changwon. Heavy equipment
The Port of Gunsan
manufacturers like Doosan Heavy Industries and Posco export cranes, power generation The Port of Gunsan is situated on the western coast of Korea
equipment, and other heavy industry equipment. Jinhae houses shipyards which build and and across from Shandong Province in China. Gunjang
export ships to the global market. Industrial Complex was built around the port and the Iksan East Sea
Free Trade Zone is only 45 km away. The industrial complex
The Port of Masan mainly handles heavyweight and bulk cargo, as well as container cargo. and FTZ were recently expanded.
Yellow Sea
Currently, the Port of Masan offers container routes mainly to Japan and China. Companies in
The Port of Gunsan mostly handles bulk cargo. Grains, feed Gunsan Port
Masan and Gumi of Gyeongbuk, Korea’s largest electric and electronic industrial complex, and
Daegu, Korea’s biggest textile industrial complex also use the Port of Masan. Thus New Port sub-materials, lumber, scraps, and pulp and paper consumed
is under development to facilitate the smooth handling of increased container cargo. Masan in the hinterlands are imported via the Port of Gunsan
New Port is expected to run four 20,000 GT berths with 12 m deep water. The berth length from the Americas, China, Southeast Asia, and Indonesia. The main export via the port is
will be 980 m. The new port is scheduled to be completed by late 2011. automobiles manufactured by GM Daewoo.

Container traffic Trends Taking advantage of geographic proximity with China, liner shipping companies have opened
Unit: TEU
regular services to China. Currently, the Port of Gunsan provides services with Shanghai and
Year Imports Exports Total
Lianyungang Ports in China. Car ferry service is also available to China.
2000 18,374 23,392 41,766
2001 27,669 37,038 65,016
2002 18,071 30,619 49,020 Container route from the port of gunsan to japan
2003 20,049 26,358 47,352
2004 28,480 33,509 61,994 Country Frequency Ports
2005 25,320 30,143 55,559
2006 15,428 17,018 32,634 Japan Once a week Tokyo, Yokohama, Chiba
2007 14,218 15,117 29,468
China Once a week Lianyungagn, Shanghai
2008 11,710 12,891 25,055

* The total includes transshipment and coastal traffics

42 Sea Transports 43
II. Gateway to Northeast Asia

The Port of Donghae The Port of Sokcho

The Port of Donghae is located in the middle of the East Coast. The Port of Sokcho is located 110 km to the north of Donghae
The eastern part of the Korean Peninsula is well known for Port. It offers regular car ferry services linking northern China
its setting because it is mostly mountainous and the Korean East Sea
and far eastern Russia. For three northeastern provinces East Sea
government prohibits development of the region. Masses of in China, it is more cost effective and timely to export to
anthracite coal, limestone, and ore are buried in the region and the Americas and Europe via the Port of Donghae, passing Sokcho Port
Yellow Sea Donghae Port Yellow Sea
limestone is processed into cement for export to Japan, China, through far eastern Russia than via ports in the Yellow Sea
and the Middle East. Anthracite coal, ore, and limestone are (including the Port of Dalian). Accordingly, traffic on the route
transported by sea to domestic markets. is continuously rising. At present, the port offers services to
Zarubino and Vladivostok in the Russian Far East three times
Donghae Port offers regular container services to Far Eastern Russia. This service covers not a week. In mid-2009, the port plans to open new services linking Vladivostok to Niigata in
only far eastern Russia but also North and East Europe, and Central Asia via the Siberia Land Japan.
Bridge (SLB).
Container traffic Trends Unit: TEU
Port facilities
Year Imports Exports Total
Terminal Berth length Water depth Cargo 2000 499 343 842
South Terminal 1,282m -10m~13m Cement, Other ore, General Cargo 2001 1,236 1,157 2,829
2002 2,729 2,053 4,782
North Terminal 1,190m -9m~12m Cement, Other ore, General Cargo 2003 3,000 2,481 5,481
2004 3,200 2,637 5,837
West Terminal 400m -10m Container, General Cargo, Other ore 2005 3,308 2,993 6,301
Central Terminal 270m -12m~14m General Cargo, Other ore 2006 3,923 3,802 7,727
2007 3,892 3,823 7,715
Terminal for Coal 270m -13m Coal 2008 1,666 1,641 3,307
Terminal for Oil products -6.5m Oil products

44 Sea Transports 45
II. Gateway to Northeast Asia

Air Transport Incheon International Airport

The Hub of Air Freight in the Northeast Asia
Incheon International Airport is located in the center of the Northeast Asian economic zone,
where 30% of the world’s trade traffic and at least 40% of worldwide air cargo originates.
About 167 cities worldwide currently connect through Incheon International Airport on more
than 70 global airlines. More flights to China (35 routes) and Japan (26 routes) are available
from Incheon International Airport than any other airport in Northeast Asia.
Yangyang Airport
Connectivity in the Region Incheon International Airport handles the second highest
Number of Cities Served (Dec. 2007)
quantity of international air cargo (based on tonnage)
Gimpo Airport (Seoul) 168 China

Incheon Airport
in the world and has been maintaining an increasing
124 N. America
Wonju Airport 121 Others trend towards high traffic with an annual average growth
rate of 9% since its opening in 2001. The weight of
transshipment cargo as a portion of total traffic is very
Cheongju Airport
high (approximately 50%), indicating that air freight hub
functions within the region are developing on the basis of
Pohang Airport ICN HKG SIN NRT
its excellent location and connectivity.
Gunsan Airport
Ulsan Airport
Daegu Airport

Gimhae Airport (Busan) 35 cities
Gwangju Airport 39 cities 24 cities

Sacheon Airport
Muan Airport
Yeosu Airport
26 cities
International Airport MIDDLE EAST
8 cities ASIA
32 cities
Domestic Airport
2 cities
Jeju Airport

5 cities

When the “Open Sky Agreement among Korea, China, and Japan” becomes effective in 2010,
Incheon International Airport will develop further into a Northeast Asian air freight hub.

46 Air Transport 47
II. Gateway to Northeast Asia

Tax incentives

Type Applicable Taxes Reduction Period / Rate Requirements

Corporate Tax
100% for the first 3 years & Manufacturing :
National Tax Income Tax
50% for the following 2 years investing over USD 10 mln
Value Added Tax
Acquisition Tax Logistics :
Local Tax Registration Tax 100% for 10~15 years investing over USD 5 mln
Property Tax

Land lease incentives

Below are the current land lease incentives based upon investment :

Investment Amount (USD) Land Lease Incentive

USD 5,000,000 ~ USD 9,999,999 50% reduction in land lease for 5 years

USD 10,000,000 ~ USD 14,999,999 100% reduction in land lease for 5 years

USD 15,000,000 ~ USD 29,999,999 100% reduction in land lease for 7 years

USD 30,000,000 ~ USD 49,999,999 100% reduction in land lease for 10 years

USD 50,000,000 and above 100% reduction in land lease for 15 years

Free Trade Zone (FTZ) Others

Incheon International Airport has designated the cargo terminal and airport freight complex • Goods can be utilized or consumed without paying customs duty
as a Free Trade Zone (FTZ) with an area of 2,093,000 m², and is planning to expand the FTZ • Supply of goods or services within the FTZ is exempted from imposition of value-added tax
to an area of 3,015,000 m² by 2011 through the addition of the second stage airport freight
complex with an area of 921,720 m².

The FTZ is a non-tariff region that is convenient for import, export, and value-added
transshipment freight activities. It has performed as a Northeast Asian freight hub for many
companies by providing incentives in an international business environment.

The incentive for a company located in the FTZ differs based on the amount of investment.
For example, a company that invests between USD 5 million and USD 10 million can receive a
50% discount on its initial land rental term of five years, while a company that invests USD 50
Strong Air Cargo Infrastructure and Cargo Terminal Facilities
million or more can be exempt from land rent for a period of 15 years.
Incheon International Airport which has completed the second stage of its expansion, has
Furthermore, a manufacturing company that invests USD 10 million or more, or a logistics three extra-large runways (4,000 m × 60 m) that can process 410,000 craft (80 planes an
company that invests USD 5 million or more is fully exempt from national taxes (corporate tax, hour), as well as a total of 40 large cargo aprons for processing of cargo aircraft on an annual
income tax, and value-added tax) for the first three years and from local taxes (acquisition tax, basis.
registration tax, and property tax) for 10 to 15 years in addition to a 50% discount on taxes for
the following two years. The Cargo Terminal Area (CTA) at Incheon International Airport consists of two sites in the
south and north with an area of 2.15 million m². Major airlines, international postal services,

48 Air Transport 49
II. Gateway to Northeast Asia

U.S. military postal services, per m²) is charged for air cargo newly created by transshipment or value-added freight
are located in the south. activities. The land-lease period for a company in the airport logistics complex is a maximum
DHL, Polar Airlines, air cargo of 50 years. The basic lease period is an initial 30 years and can be extended twice for 10
warehouses, are located year periods so that companies in the complex are guaranteed stable and continuing business
in the north. The eight activities.
companies located in the
cargo terminal at Incheon Sixty-five percent of the total land was sold in lots when the freight logistics was established.
International Airport are Global companies that specialize in logistics such as KWE and Schenker, as well as local
capable of handling 4.68 air freight forwarders like Logitech for Samsung, and Pantos Logistics for LG are located on
million tons of cargo annually premises to perform various value-added freight activities.
in the area with 281,680
m² in total. It is expected Lease conditions
that new air freight businesses will be created by improved connectivity to the airport freight
Item Specification
complex in the future.
Transshipment KRW 11,490 / m² / year
Manufacturing USD 12 EUR 8.9
Land lease fee
Terminal facilities at Incheon airport (Depending on purpose)
KRW 11,490 / m² / year
Other logistics uses
Companies Size (m²) Capacity (ton) USD 12 EUR 8.9

Korean Air Cargo 91,900 1,420,000 After 3 years from the date of execution of the agreement or business commencement,
Asian Cargo 50,400 1,160,000 Land lease fee imposing date
whichever comes earlier.
South Cargo Terminal Foreign Airlines 50,400 1,400,000
Int'l Express Mail Center 33,800 350,000 30 years from the date of agreement
U.S Military Mail Center 2,000 20,000 Land use period
(2 extension options of 10 years each)
Subtotal 228,500 4,350,000

DHL 20,000 100,000

North Cargo Terminal Polar Air Cargo 17,000 120,000 Sixty-five percent of the total land was sold in lots as soon as the freight complex at Incheon
Air Cargo Warehouse 16,180 110,000
International Airport was established. Global companies that specialize in freight such as KWE,
Subtotal 53,180 330,000 Schenker, etc. and the air freight agencies for export companies such as Samsung Electronics,
Total 281,680 4,680,000 Logitech, Bumhan Pantos, etc. are located on the premises to perform various value-added
freight activities.

Efficient and Competitive Airport Logistics Complex

The airport freight complex, with approximately 1,044,000 m² in total, was established to
serve various logistics businesses by maximizing the advantage of the FTZ in the east of the
cargo terminal at Incheon International Airport. The air freight complex is located in an optimal
site, directly connecting the air cargo terminal and the runways and aprons. An air freight
complex with an area of 1,400,000 m² will be additionally built up by 2011.

The land rent for the logistics complex at Incheon International Airport is relatively inexpensive:
USD 12 annually per m² for general logistics activity. Only half the above rent (USD 6 annually

50 Air Transport 51
II. Gateway to Northeast Asia

World’s Beating Service and Cost-Competitiveness Superior ground handling service

In order to provide the fastest and most predictable cargo handling service, ICN introduced the continuous
Incheon International Airport was selected as ‘The Best Airport Worldwide” by the Airport
service improvement program, ensuring a better service quality than those of other leading airport.
Council International (ACI) for four years in a row from 2005 to 2008, and was selected as ‘The
Best Cargo Airport Worldwide” in 2008 by Air Cargo World. Activity Goal Result (2007)


The airport offers 24-hour customs clearance service all year round and boasts the fastest Truck Waiting Time (in 30 min) 97% 98.7%

export/import customs clearance (including tariff charges and refunds) in the world. It provides Cargo Reception (in 15 min) 95% 98%

the world’s best service quality in its air cargo land work. Cargo Breakdown-ATA Standard

Passenger Aircraft (in 3.5 hrs) 95% 97%

Charges for using Incheon International Airport (landing charges, parking charges, etc.) are Freighter Aircraft (medium, in 5 hrs) 97% 100%
lower than other competing airports. The airport provides more competitive air freight business Freighter Aircraft (large, in 8 hrs) 97% 100%
opportunities by implementing new route openings, flight expansion, and various discounts for Express Cargo (in 2 hrs) 97% 100%
airline operating during off-peak season. Perishable Cargo 97% 100%

Inbound Cargo Assortment (in 1 hr) 95% 96.5%

Fast and Easy Customs Clearance Mishandling Rate 0.00015% 0%

Incheon Airport customs ranked first cut of 169 members of World Customs Organization in ACI Service * Source : IIAC
Excellence Award.
• 24 hour clearance service
ICN’s operating costs compared with major competing airport
• Express cargo: One-stop clearance on the spot
ICN's aeronautical charges are lower than that of major competing airports in the region.
• Pre-declaration available before entry
Landing Charge Parking Charges Operating Cost
Category Korea USA Canada Australia
Export Clearance Within 2 mins ICN 100% 100% 100%
Within 2 hrs System UNI-PASS ACE ICS ICS
KIX 205% 165% 190%
Import Clearance (0.5hrs if the
integrated system) Paperless 100% 60~95% 95% 99% NRT 187% 165% 165%

Customs Drawbacks Within 5.2 hrs Automatic PVG 117% 162% 137%
99.6% 90% Measuring -
acceptance (export)
HKG 89% 159% 117%
Tax Payment Within 10 mins Single Window Complete Complete Complete Preparing
Asia Average 120% 142% 125%
* Source : IIAC * Source : IATA, 2007

incentive Program
New Air Service Incentive 100% reduction on landing charge for a year

Increased Frequency Incentive 50% reduction on landing charge for a year

Night Flight Incentive (23:00~5:30) 25% reduction on landing charge for a year

off-peak Flight Incentive 25% reduction on landing charge for a year

52 Air Transport 53
II. Gateway to Northeast Asia

The Other Airports planning to supply logistics facilities with an area of about
26,000 to 34,000 m² by 2012 on the basis of the high
marketability and utility of the logistics complex at Gimpo
Seven international and seven domestic airports, in addition to Incheon International
Airport, are evenly distributed nationwide in Korea that provide various air freight business
opportunities. Six international airports (other than Yangyang Airport) specialize in air
cargo handling facilities (terminals) and are capable of handling about 1.2 million tons of
international and domestic air cargo.
Gimhae International Airport
international airport Gimhae Airport is the gateway to the Busan and
Gimpo Gimhae Jeju Cheongju Muan Daegu Sub total Gyeongnam regions, the second largest economic zone in
D I D I D I D I D I D I D I Korea. It possesses various international air routes (second
Area (m²) to Incheon International Airport), and has flights to more
30,914 115,040 9,685 18,338 15,562 31 1,667 590 2,050 1,062 844 - 60,722 135,061 than 20 cities in seven countries throughout Asia and
Annual Handing Capacity (10,000 tons)
Europe (Japan, China, Taiwan, Thailand, Vietnam, Hong
Kong, Russia, and Germany).
61.8 98.9 19.0 16.3 31.0 1.7 3.3 0.5 4.1 0.9 1.7 - 120.9 118.3

* D: Domestic I: International
Gimhae Airport upgraded its facilities to accommodate large cargo aircraft by opening its
modern international cargo terminal with a total area of 18,338 m² as of January 2009. It is
Gimpo International Airport expected that more active air logistics business opportunities will be created in addition to the
growth of the regional economy in the future.
Gimpo International Airport (cargo terminal and logistic complex) is located within 20 km of
downtown Seoul. It provides access to the largest metropolitan area with significant demand
for air cargo, and also has excellent connectivity to other major Korean cities.

The cargo terminal and logistics complex at Gimpo Airport performs functions similar to those Jeju International Airport
of Incheon International Airport and have been developed as core logistics facilities for the Jeju International Airport handles the most domestic air cargo in Korea (80% of total air cargo)
Seoul metropolitan area. and can handle 194,000 tons annually in an area of 15,694 m². Jeju Island handles a variety
of air cargo traffic, from marine products to flowers and tangerines. The demand for import
Many global freight forwarders specializing in logistics, including DHL, Expeditors, and air cargo is very high due to the region’s specialized tourism industry, which also creates high
Schenker are located in the logistics complex at Gimpo Airport. Korea Airports Corporation is growth opportunities in air freight in the future.

54 Air Transport 55
II. Gateway to Northeast Asia

Rail Transport Domestic Network

Status of the Railroad Network and Rail Cargo Transport in Korea
46.81 million tons of cargo are transported annually on Korea’s railroads with 24 routes
spanning a length of 3,381 km. The railroads have not been actively extended in terms of
facility expansion since 1950, but have grown 10% since 1990 due to the opening ofhigh
speed railroads and the commencement of regular railroad construction projects. Double-
tracking and electricification-railroad rate have steadily increased with extensions of 41.3%
and 53.5%, respectively, as of 2007.

The quantity of cargo transported has changed relatively little since 2000, and is smaller than
Seoul the 57.92 million tons transported in 1990. Individual items tend to decrease, but by and
Gwangmyeong DongHae
large, containers have a tendency of steady rates of increase.
Suwon Jecheon

Chunan/Asan ChungJu Railroad Network Cargo Transport Results (10,000 tons)

Year Service Double
Electrification Smokeless General
Daejeon Extension Tracking Cement Container Ore Oil Other Total
West Daejeon Rate (%) Coal Merchandise
(km) Rate (%)

Kimchun 1990 3,091 27.4 16.7 1,411 328 1,968 616 466 528 475 5,792
East Daegu Gyungju 2000 3,123 30.1 21.4 1,736 872 712 382 261 258 303 4,524
2001 3,125 32.1 21.4 1,794 777 718 395 239 259 330 4,512

Ulsan 2002 3,129 32.1 21.4 1,893 815 667 418 222 265 293 4,573

2003 3,140 33.0 21.7 1,951 875 712 388 226 264 295 4,711
Masan Busanjin
2004 3,374 39.1 47.1 1,772 893 638 418 234 255 241 4,451
Gwangju Busan
2005 3,392 39.9 47.1 1,516 1,003 657 384 197 240 170 4,167
Gyeonbu Line
Sunchun 2006 3,392 40.6 53.6 1,582 1,125 737 369 176 220 125 4,334
Honam Line
Jeolla Line 2007 3,399 41.3 53.5 1,648 1,173 688 424 200 210 110 4,453
Janghang Line
Jungang Line
Taebaek Line
The high-speed railroad, exclusively for passenger trains, is 240.4 km long between
Gwangmyeong and Dongdaegu out of a total 3,399 km of trackage. It is expected that the
length of the high-speed railroad routes will reach 638.5 km in 2017 when the 2 nd stage
Gyeongbu high-speed railroad and the Honam high-speed railroad projects will be completed.

The Central Line (Seoul to Gyeongju), the Gyeongbu Line (Seoul to Busan), the Taebaek Line
(Jecheon to Baeksan), and the Yeongdong Line (Yeongju to Gangreung) handle 9.393 million
tons, 9.072 million tons, 8.308 million tons, and 7.313 million tons, of cargo respectively.
They amount to 73% of the annual cargo transport quantity of 46.81 million tons sent by rail

56 Rail Transport 57
II. Gateway to Northeast Asia

in 2008. The Donghae Route, Gyeongjeon Route and Jeolla Route play important roles in rail As for progress in ongoing regular railroad projects, as of 2009, there are 18 projects under
cargo transport. construction with a total length of 1,109 km and a total project budget of KRW 21 trillion. There
are 10 projects in the design stage with a project budget of KRW 12.2 trillion. The goal is to
build a high speed railroad cargo transport system by expanding the railroad network to major
Status of Railroad Freight Centers industrial complexes and ports and by building major high speed arterial railways.
Freight centers to handle railroad traffic possess CYs (Container Yards) with an area of
843,000 m² in 26 stations, CFSs (Container Freight Stations) with an area of 34,064 m² in
three stations, 95 cement stock facilities in 37 stations, branch centers with an area of 97,000
m², and a vehicle yard with an area of 20,690 m².

Freight Center Status Trans Siberian Railway,

Category Area/Capacity
Number of
Freight Center Station
Trans China Railway, Trans Korean Railway
Station Name

Ohbong, Dujeong, Sapgyo, Sojeongri, Jochiwon, Cheongju, Chungju, Bugang,

South-North Railroad Connection Project
CY 843,000 m² 26
Maepo, Okcheon, Ahpo, Yakmok, Busanjin, Gaya, Ulsan port, Onsan, Gangneung, The south-north railroad connection project in Korea is between Munsan Station and Gyeseong
Seokpo, Gunsan, Dongiksan, Dongsan, Imgok, Songjeongri, Heungguksa,
Sinchangwon, Taegeum Station (27.3 km) and between Jejin Station and Geumgangsan Station (25.5 km).

CFS 34,064 m² 3 Ohbong (10,711 m²), Busanjin (3,832 m²), Sinchangwon (19,521 m²)

Susaek, Ohryudong, Ohbong, Suwon, Seongbuk, Deokso, Paldang, Choseongri,

Ohsong, Bugang, Maepo, Sintanjin, Heukseokri, Yeonmudae, Cheongju, Eumseong, South-North Railroads
Cement Stock
570,000 tons 37 Doan, Ganchi, Sinseong, Okma, Jupyeong, Yakmok, Sindong, Goedong,
Nammunsan, Hanrimjeong, Geukrakgang, Jangseong, Yeosu, Buyong, Bukjeonju, Gyeong-ui Line
Chuncheon, Mureung, Sinnyeong, Pyeongeun
Munsan station to Kaesung Station (27.3 km, Single Track)
97,000 m² 8 Yongsan, Seongbuk, Onsan, Ohbong, Susaek, Jinju, Changhang cargo, Bukjeonju
Munsan Imjingak Dorasan Military Demarcation Panmun Sonha Kaesung
Vehicle Yard 20,690 m² 2 Seongbuk (16,500 m²), Ulsan (4,190 m²) station Station Station Line (MDL) Station Station Station

Iron Steel Center - Uiwang (6,765 m²), Ohbong (9,597 m²), Goedong (4,565 m²) <12.0 km> <15.3 km>
Other 6 Iron Steel Yard - Sinchangwon (6,460 m²), Incheon (1,280 m²)
Ore Warehouse - Donghae (11,837 m²)
Donghae Line
Jejin Station to Geumgangsan Station(25.5 km, Single Track)

Future Railroad Network Master Plan and Progress Jejin Station

Military Demarcation Gamho
Samilpo Station
Line (MDL) Station Station
The goal of the national railroad network master plan (March 2006), which sets the direction for
the network’s construction through 2015, is to set up a railroad network in six south and north <7.0 km> <18.5 km>

axes, and six east and west axes connected to the high speed railroad to connect all major cities
in the nation in two to three hours time. The goal is to achieve railroad extensions of 3,816.5 km,
The south-north railroad was constructed in full by linking the Gyeongeui Route railroads
double track rates of 64.1%, and electrified railroad rates of 73.1%.
(Seoul to Sineuiju) as a direct result of the historic South-North Korean Summit Talks in 2000.
South and North Korea held a ground-breaking ceremony for construction to connect the

58 Rail Transport 59
II. Gateway to Northeast Asia

railroads of the Gyeongeui Khasan railroad and the Najin Port improvement project in April 2008. The ground-breaking
Route and the Donghae ceremony of the project was held on October 4 of that year.
Route on September 18,
2002, following the terms TCR is currently saturated with domestic traffic demand by China. Thus, China has not been
of an agreement signed in active in moving the continental railway connection project forward, except for its inland areas.
August of that year. The As for the use of the TCR main route (Lianyungang – Beijing – Kazakhstan), this is seen as
construction of the south advantageous to connect the sea transport routes between Korea (Incheon Port – Busan Port)
section of the Gyeongeui and Lianyungang at the moment, while the TCR main route with the inland areas of China
Route was completed in provide service to Central Asia (Kazakhstan) after marine transport from Busan (Incheon) Port
December 2002. Trains have to Lianyungang.
been operating to Imjingak
Station since September The northeast provinces of China are the major production bases for food and mineral
2001 and to Dorasan Station resources. The economic growth and resident life improvement caused by the recent northeast
since April 2002. The construction of the south section of the Donghae Route was completed development policy has rapidly increased demand for transport in the corresponding region. To
in December 2005. meet these growing needs, China is constructing its ‘Eastside Railroad,’ about 1,380 km from
The Amur River to Liaoning Province along the border between Russia and North Korea.
South and North Korea tested the operation of the new connections with a train operating at a
speed of 40 km/h in the 27.3 km section of the Gyeongeui Route and the 25.5km section of The freight bottleneck of the three northeastern provinces is expected to be resolved through
the Donghae Route in May 2007. Even though it was a test operation and one time event, it the construction of the Eastside Railroad in the future. In order to expand and facilitate smooth
became the starting point to prepare for a future opening. The successful train test operation exchange with the three northeastern provinces (Jilin, Liaoning, and Heilong Jiang Provinces),
eliminated worries about safety and overcame technical obstacles to full-scale operations. it is necessary to connect them to the Gyeongeui Route. The condition of the railroad in the
north section of the Gyeongeui Route among the routes passing through the Korean Peninsula
is relatively good so there is high potential to succesfully utilize the Pyeongyang – Sineuiju
route in the near future. Transport to the interior of China utilizing the TCR main route through
Progress of Trans-Continental Railway Connections Pyeonyang, Sineuiju, and Beijing is greatly needed to diversify the freight network connecting
The continental railroads connected to the Trans Korean Railway (TKR) are the Trans Siberian inland China and the wider Asian region.
Railway (TSR), Trans China Railway (TCR), Trans Mongolian Railway (TMGR), and Trans
Manchuria Railway (TMR). The four routes of the TSR and TCR are comparable to international Status of transcontinental Crossing Railroad Routes
railroads in that they are routes with a high possibility of being utilized in connection with
Building Electric
Classification Distance (km) Double Track (km) Length (mm)
the South-North train. However, the TMGR and TMR lack sufficient routes in the international Railroads (km)

railroad network due to decaying facilities and inefficient border passage. Traffic on the TSR Trans Siberian Railway (TSR) 9,288 9,288 8,917 1,520

has increased recently, but returns on investment on are still relatively low. Trans China Railway (TCR) 8,613 7,127 5,001

Trans Manchuria Railway (TMR) 7,721 7,367 6,067 1,435

The recent positive attitude of Russia towards the connection of the TKR to TSR will be a major
Trans Mongolian Railway (TMGR) 7,753 6,296 5,777 1,520
factor to propel the continental railway construction project in the future. Moreover, the railroad
transport network to supplement sea transport to the European region has been secured for
the future, and it is expected that the multi-purpose utilization of Siberia as a resource will
increase. North Korea and Russia recently reached an agreement on propelling the Najin-

60 Rail Transport 61
II. Gateway to Northeast Asia

The Inter-Governmental Agreement on the Trans-Asian Railways

The basis for connecting the continental railroads was set up by concluding the inter- Land Transport
government agreement on the Trans Asian Railway (TAR) at the UN ESCAP’s 3rd Conference of
Ministers of Transportation held in Busan in November 2006.

The 18 countries that signed it were Armenia, Azerbaijan, Cambodia, China, Indonesia, Iran,
Kazakhstan, Laos, Mongolia, Nepal, Korea, Russia, Sri Lanka, Tajikistan, Thailand, Uzbekistan,
and Vietnam, while the 10 countries that did not sign were Pakistan, North Korea, Bangladesh,
India, Malaysia, Myanmar, Kyrgyzstan, Singapore, Turkmenistan, and Georgia.
Trans Asian Railways Gimpo
Seoul Hanam
Incheon Youngdong Line 234 km DongHae
Ansan Wonju DongHae Line 60 km

Pyeongtaek·Jecheon 57 km
Pyeongtaek Anseong
Dangjin Chunan Punggi

Central Line 289 km

Seohaean Line 341 km Gongju
Iksan·Pohang Line 63 km
Nonsan Pohang
Jeonju Daegu
Honam Line 194 km
Hamyang Ulsan
Gochang Daedong
Gochang·Damyang Line 43 km Busan·Ulsan Line 47 km
Damyang Namhae 1 Line 17 km
Gwangju Jinju
Suncheon Namhae Line 168 km
Muan·Gwangju Line 42 km Gwangyang
Routes are used
Line under construction
Private Line
Private Line under construction

62 Land Transport 63
II. Gateway to Northeast Asia

Expressway and Domestic Network Expansion and maintenance of expressways

The addition of 29.5km to the Gyeongin Expressway linking Seoul and Incheon in 1968 and
Overview of expressways and national roads the opening of the 426km long Gyeongbu Expressway linking Seoul and Busan in 1970
Korea’s road networks consist mainly of expressways and national roads linking major brought the entire country within a day’s travel. As of late 2007, a total of 3,368km in
cities and regions through the nation. As of late 2007, the expressways stretch 3,400 km, expressways on 26 lines had been constructed, playing a pivotal role in passenger and freight
while national roads span 14,000 km, representing 17% of total road length. In addition to transportation by land.
expressways and national roads, regional roads, county roads and trunk roads in downtown
areas link the interior of provinces, and amount to total of 86,000 km. Total road length in status of roads in oecd member states
Korea exceeds 100,000 km of which 78% is paved. Paved express roads of four lanes or Classification Road Length (km) Road length per 1,000 persons (km)
fewer extend 2,600 km. 12,800 km of the nation’s roads are paved. 93% of them are four
America 6,544,257 21.40
lanes or fewer.
Japan 1,177,278 9.20

England 388,008 6.38

korea's road system (As of late 2007)
France 950,985 15.43
Length of Lanes (km)
Classification Length (km) Pavement Rate (%) Italy 484,688 8.23
Under four lanes More than six lanes
Korea 103,019 2.13
Expressway 3,368 100 2,557 810

National Roads 13,832 97.4 12,701 766

Regional Roads, etc. 85,819 74.2 59,549 4,258

Gyeongbu Expressway, Honam Expressway, Namhae Expressway, Youngdong Expressway
Total 103,019 77.6 74,807 5,834
and Guma Expressway were opened in the 1970s. In the 1980s, the 182.9km 88 Olympic
Expressway and the 117.8km Jungbu Expressway were built, and in the 1990s, the 92.9km
In Korea, geographically, south-north roads have more traffic than east-west roads and are road from Toegyeowon to Pankyo, Jangsu, and Ilsan, as well as the 14.3km road from Seoul
more developed. The road length per area is 1.03km/1km², hovering slightly below the level of to Ansan and the 15.8km Second Gyeongin Expressway were added. In addition, new roads
advanced nations. The road length per 1,000 persons is 2.13km, only a tenth that of the US and expressways were built including Seohaean Expressway, Jungang Expressway, Daejeon-
and slightly more than one fifth that of Japan. In France, the total road length is shorter than Tongyoung Expressway, Pyeongtaek-Chungju Expressway, Cheonan-Nonsan Expressway and
Japan, while the road length per 1,000 persons is 15.43km, 9.2km longer than Japan. Incheon International Airport Expressway to provide more balanced development in the nation’s
territory. New roads including Busan-Ulsan, Busan-Daegu, Iksan-Pohang, Mokpo-Gwangyang,
Gochang-Damyang, Muan-Gwangju, and Daejeon-Dangjin were built and existing roads were
extended to facilitate freight transportation between Korea and other countries.

A total of 13 roads are under construction or have already been constructed. Korea is
undergoing efforts to bring the entire nation to within a half-day trip. Notable achievements
include the Jungang Expressway, Seohaean Expressway, Jungbu Naeryuk Expressway and the
Daejeon-Tongyong Expressway.

64 Land Transport 65
II. Gateway to Northeast Asia

Jungang Expressway
The Jungang Expressway stretches from Chuncheon to Busan, spanning 362km. The road was
ICDs and Distribution Centers
designed to enhance accessibility to the central and inland Youngnam regions and promote Logistics facilities in Korea include freight stations, freight terminals, collection & distribution
tourism in these areas. The opening of the Jungang Expressway halved travel time from Busan and
centers, farm products distribution facilities, Integrated Freight Terminals (IFTs), and Inland
Chuncheon. The section between Daegu and Busan was privately funded and the sections from
Container Depots (ICDs). Among them, the logistics infrastructure refers to IFTs and ICDs.
Daegu to Andong, from Jecheon to Wonju and from Hongcheon to Chuncheon were widened to four
lanes. Utilizing the infrastructure, logistics activities such as transportation, storage, unloading, and
Seohaean Expressway shipping can proceed smoothly.
A 355.1km expressway was built in the western coastal region linking the Port of Incheon to the
Port of Mokpo to respond to changing conditions in Northeast Asia, and to serve as a hub port.
Construction commenced in 1990 and was completed in 2001. The opening of the expressway
shortened travel time from Incheon to Mokpo by more than four hours.

Jungbu Naeryuk Expressway Northern

The Jungbu Naeryuk Expressway is under construction to distribute future traffic load on the Gangneung
Gyeongbu and Jungbu Expressway and to balance development of the nation’s territory. It spans a Bucheon Seoul/Dongnamgwon
total of 330.7km, of which 294.1km was opened in 2007 while the 36.6km between Yangpyeong Gwangju
and Yeoju is scheduled for completion in 2012. Metropolitan
Pyeongtaek Eumseong
Daejeon-Tongyoung Expressway Chunan
The Daejeon-Tongyoung Expressway stretching 209.8km was opened in 2005 to meet the Jungbu Area
demand for transportation of cargo from the Port of Gwangyang to the Chungcheong region and Andong
South Daejeon
to develop the relatively underdeveloped northeastern part of Jeollabukdo and the western part of Daejeon

Jeonju Youngnam Area

Other Expressways
Honam Area Ulsan
In addition to the aforementioned four expressways, Incheon International Airport Expressway
(36.6km), Pyeongtaek-Chungju Expressway (59.4km), Iksan-Pohang Expressway (129.4 km),
Mokpo-Gwangyang Expressway (101.1 km), Daejeon-Dangjin Expressway (94.3km), Gongju- Gamcheonhang Busan Area

Seochoen Expressway (59.0km), Cheonan-Nonsan Expressway (80.9km), and Seoul-Yangyang

Expressway (78.5km) were built (some sections are still under construction).

Inland Logistics Bases

Logistics complex
In operation
Construction completed
Under construction

66 Land Transport 67
II. Gateway to Northeast Asia

IFT and ICD June 1999. It was built on a 317,000 m² site. With the Port of Busan and Kimhae Airport nearby,
the IFT plays a role as a transport base for exports and imports. The Yangsan ICD, the inland
The Integrated Freight Terminals (IFTs) handle loading, unloading, classification, information
container station for the Busan Area, is built on a 952,000 m² site and was opened in April 2000.
processing and the packing of freight using more than two transport modes (i.e. freight trucks and
railroads). Facilities include distribution centers, freight stations, container yards, and railway stations.
The Jangseong ICD built in Jangseong-gun, Jeollanamdo, completed its first phase and
went into service in June 2005. Currently the second phase is underway. It will be built on a
The Inland Container Depots (ICDs) are logistics strongholds built in a strategic transportation
529,000 m² site and will act as a logistics hub in Jeollado. The IFT and ICD will be separately
location for roads and railways in order to reduce traffic problems between off-dock container yards
built and operated in the capital and Busan area, but the two facilities will be jointly built and
and ports. The ICDs were established as a means of expanding SOC (Social Overhead Capital)
operated in the Honam area as well as other areas. Accordingly, it is referred to as the Inland
and enhancing the rationalization of logistics process like shifts in transportation from land to rail.
Logistics Bases (ILBs).
Intermodal transportation using ICD can be more effective than using single mode transportation.

The Inland Logistics Bases (ILBs), will serve as freight transport stronghold in the Chungcheong
In 1987, the Korean government set up a distribution modernization policy for the freight
and Gyeongbuk areas, and are under construction via a private construction firm contracted
terminals (IFTs and ICDs). It established IFTs in Gunpo in the capital area, Yangsan in the
in March 2005. For the ILB, freight stations, distribution centers, and container yards are
Busan area, Jangseong in the Honam area, and Cheongwon-Yeonji and Chilgok in the
being built on a 481,000 m² site in Yeongi-gun and Cheongwon-gun, Chungnam. The ILB of
Youngnam area as five logistics bases in 1991 to reduce transport time and costs through
the Youngnam area will be built on a 456,000 m² site in Chilgok-gun, Gyeongsangbukdo. The
massive freight transportation linkages via the main railway.
ground was broken in February 2007.

The Euiwang ICD is a customs clearance center for containers bound for the capital area where
Operation of the general freight terminal
they are temporarily stored and then transported. The depot went into service in July 1993. It
covers 735,000 m² and performs customs clearance, freight collection, storage, classification, Freight terminals other than ICDs and IFTs are called general freight terminals. There are
simplified bonded transportation, tariff refunds, railway transport stationing, issuance of B/Ls to about 30 terminals in operation throughout the nation as of January 2009. Among these, the
shipping companies and plant quarantine. A customs house, banks, and shipping companies are largest terminals are the Korea Freight and Seobu Truck Terminals in Seoul, the Busan Freight
housed in the ICD to handle railway transportation, tariff refunds, and B/L issues. Terminal, the Pohang Freight Terminal in Gyeongbuk, and the Seobu Freight Terminal in Daegu.

The ICD is an extension of the pier at the port to the inland. This railway transport from the pier Role and future of logistics infrastructure
to the customs house in the ICD is simplified bonded transportation and carries out the same With the establishment of the ICDs and IFTs, transportation loads are distributed among
function as freight being handled at a terminal or a customs house. Tariffs are refunded early small-sized trucks, large to mid-sized trucks, and railways. Small-sized trucks run between a
for export freight coming to the Euiwang ICD based on a certificate of Goods Carried-in issued terminal and neighboring consumer communities, while large to mid-sized trucks and railways
by the ICD after the export declaration is received. Accordingly, the depot is well suited to mid- run on a long distance platform. This led to a logistics system that realized environmentally-
weight freight using railways, resulting in more freight coming to the Euiwang ICD. friendly, cost-effective economies of scale by reducing logistics costs, including lead time and
fuel costs. In addition, the construction of the ICD helped shippers save on logistics costs as
The Gunpo IFT will be built on a 347,000 m² site in the capital area after the then Ministry they can obtain export containers from the shortest distances because empty containers can
of Construction and Transportation of Korea agreed on the proposal by the Korea Integrated be stored in the ICD after the import goods in a container are delivered to their owners.
Freight Terminal to expand the IFT in October 2002 due to increasing demand for freight
transport from the 1990s. When the aforementioned five logistics bases are completed and a new one in the northern
capital area (Paju) is built, a global logistics network will be created linking regional airports
The Yangsan IFT of the Busan area broke ground in December 1994 and went into service in and sea ports and serving as a logistics hub in Northeast Asia that carries out domestic
transport and international freight transfers.

68 Land Transport 69
II. Gateway to Northeast Asia

Gyungin Waterways Expected Effects

The Ministry of Land, Transport and Maritime Affairs (MLTM) forecasts that KRW 2.25 trillion
The GI Waterway stretches 18km, with a 14.2km trench already completed. Digging an will be invested in the construction of the GI Waterway. The resultant economic effects will be
additional 3.8km trench toward the Han River will allow the waterway to join the Han and the 25,000 new jobs and KRW 3 trillion in production inducements.
West Sea.
The GI Waterway will be completed in 2011 and with its completion, the waterway is
Classification Gulpocheon Trench Gyungin Waterway expected to reduce logistics costs, control floods in the basin of Gulpocheon, relieve traffic
Extension 14.2 km 18 km (Added Section 3.8 km) congestion, and create demand for tourism. The Ministry of Land, Transport and Maritime
Bottom Width 80 m 80 m Affairs anticipates that 970,000 TEU containers, 750,000 ton steel products, 76,000 vehicles,
Facilities Trench and Embankment (Four Lanes, 13.4 km) Channel, Terminal and Sluice 913 m3 of sea sand and 1.05 million passengers will be on the waterway by 2030. When
Project Cost KRW 584.9 billion KRW 2.2458 trillion the Yongsan Terminal, which is part of Han River Renaissance Project underway by the Seoul
Metropolitan Government, is completed, passenger ships will pass through the waterway from
China to Yongsan, the center of Seoull.

The waterway can accommodate 4,000 G/T barges, larger than the original size (2,500 G/T).
It will open in late 2011 but more trenches will need to be dug in order to secure the required
6.3 meter depth.

Overview of the GI Waterway project:

Major facilities plan - Four bases And Four sub-bases

Windmill Park
Gimpo Terminal
Riverside Park
Hyangyuwon Makyeongwon

Incheon Terminal Waterfront
Dumulmeori Eco Park

Four bases for logistics, culture, tourism, and leisure Four sub-bases using waterfront

70 Land Transport 71
II. Gateway to Northeast Asia

Coastal Transport Recently, however, with coastal transport’s increasing prominence as an environmentally-
friendly mode of transport, Hanjin Shipping has reopened the coastal container line service
Cargo traffic allotment proportion by transport mode in Korea between Gunsan and Gwangyang on February 24, 2009 followed by the coastal transport
service linking the Port of Incheon, the Port of Gwangyang, and the Port of Busan. This move
is attributable to heightened expectations with respect to coastal transport induced by the
70 reduction of port charges (including container line navigation charges, berthing charges,
60 and anchorage charges) in 2009 and stricter responsibility for green house gas emissions
50 Public roads
40 Ships
Hanjin Shipping plans to station two 4,000-ton container vessels (Hannamho & Hanpoho) (215
30 TEU) at the Port of Busan followed by the Port of Incheon and the Port of Gwangyang, and
run them three times a week. The opening of the coastal container line service is expected to
increase traffic from the nearby Yeosu Petrochemical Industrial Complex, the capital area, or
Jeollado, to ensure stable transport methods and reduce logistics costs.
1966 1971 1976 1981 1986 1991 1996 2001 2006

Re-examination of coastal transport as “Green Transportation”

Domestic freight traffic (based on tonnage) rose 9.7 times in the period from 1966 to Compared with the fuel consumption for one container, trucking requires 20 times more fuel
2006. Traffic increased 2.14 % by road, 5.13 % by coastal shipping, 0.85% by railway, than coast-sailing ships. Road transport requires eight times more energy (kcal) per ton-
and 315% by airplane from 1966 to 2007. kilometer than railway transport. The Ministry of Land, Transport and Maritime Affairs plans
to complete the port-railway development plan for Busan New Port and Gwangyang Port by
2011. This plan includes the establishment of power supply facilities for large vessels and a
High dependence on road transport and problems high efficiency energy project by late 2009.
The reason behind high dependence on road transport is that recently, truckers become more
competitive due to oversupply of trucks in the freight trucking market and that shippers favor
road transport rather than other transport modes because of more flexible transport contracts.

Resumption of domestic coastal container liner service

The domestic coastal container liner service operated by Hanjin Shipping and Korea Express
ceased in April 2006. This was triggered by competition in the coastal transport market when
coastal routes between Busan and Incheon and Gwangyang were opened to foreign shipping
companies in 2002. The coastal container liner service lost competitiveness due to port charge
reduction exemptions (berthing charges, anchorage charges, freight immigration charges,
etc.), exclusion from duty-free oil users and exemption from the overland container tax.

72 Land Transport 73
II. Gateway to Northeast Asia

A World within Korea

East Sea
Incheon FEZ

Hwang-Hae FEZ Daegu-Gyeongbuk FEZ

Saemangeum-Gunsan FEZ

Yellow Sea Busan-Jinhae FEZ

Gwangyang Bay Area FEZ

Free Economic Zones

What are Korea’s FEZs? Types of Special Economic Zones

A Free Economic Zone (FEZ) is a special zone providing incentives to invite foreign companies. Classification Details Cases

A special economic zone is a region that with eased regulations on economic activities • Korea: Free Trade Zone
Regions for Activating Trade Functions among
Trade-Centered Zone • America: Foreign Trade Zone
occurring within the zone. Nations
• Japan: Foreign Access Zone

• Korea : Free Trade Zone, Foreign Investment Zone

Special economic zones include “trade-centered zones,” “production-centered zones,” and Production-Centered Regions Maintaining a Production Base with the • Mexico: Maquiladora
Zone Provision of Tax Benefits • Taiwan: Export Processing Zone
“complex zones.” Trade-centered zones are regions where import items within the special zone • China : Special Economic Zone
are free from various regulations like limitations on quantity, payment of tariffs, and item taxes,
Regions for Comprehensive Business with Trade,
and foreign currency regulations. Examples include the Free Trade Zones (FTZs) in Korea, the Complex Zone • Hong Kong, Singapore, China Pudong
Production and Financing Combined
Foreign Trade Zone in the US, and the Foreign Access Zone in Japan. The production-centered
zone is a special zone for inviting foreign manufacturing companies. Examples are the Free
Trade Zones in Korea, the Export Processing Zone in Taiwan, and the Special Economic Zone Among the special economic zones, Korea’s FEZ is a complex special economic zone that
in China. Third, a complex zone is a zone with a trade-centered zone plus a production- includes export activities, logistics, financial services, education, R&D, sightseeing, culture,
centered zone, and can guarantee a wider range of economic activities like trade, production, and a foreign residents’ environment.
and financing.
Free Trade Zones (FTZ) and Foreign Investment Zones (FIZ) are roughly similar to Free
Economic Zones, though they differ in some critical respects. An FTZ is a region that
guarantees freedom of manufacturing, distribution, and trade activities through relaxed
regulations to attract foreign investment, improve international trade, and promote regional
development. In an FEZ, tariffs are not applied, and various taxes (corporate tax, acquisition
tax, registration tax, and property tax) and rent are reduced for foreign companies. Moreover,
the goal of an FEZ is to improve the management environment of foreign investment
companies and the living conditions of foreigners in order to promote foreign investment.
Various tax reduction benefits have been provided for foreign capital invested in the FEZ.

74 Free Economic Zones 75

II. Gateway to Northeast Asia

Eased regulations are applied to medical services and education in these areas to create an
environment suitable for foreigners. Labor activities can be specifically regulated to create a
better environment for corporations. Copenhagen Moscow

London Amsterdam
Southampton Rotterdam Vancouver
Le Havre Paris Ulan-Bator
In this respect, FEZs can be a more comprehensive special economic zone compared to Barcelona Dandong
Vladivostok Portland
Beijing Tokyo
FTZs and FIZs. The targets of FIZs are only corporations, while the targets of FTZs are export- Tashkent Tianjin Yokohama
Los Angeles
Long Bea
Cairo Zhengzhou Shanghai
oriented foreign companies. The targets of FEZs include not only the manufacturing industry Jidda Dubai Hongkong
but also all industries such as logistics, business, sightseeing, education and medical services. Aden Bangkok



Six FEZs Dampier


Gwangyang Saemangeum- Durban

Incheon Busan-Jinhae Yellow Sea Daegu-Gyeongbuk Cape Town Port Elizabeth
Bay Area Gunsan Melbourne Auckland
Area (km²) Wellington

209 105 89 55 67 40

Airports / Ports
Incheon Int'l Airport/
Incheon Port
Busan Port/
Busan New Port
Gwangyang Port
Pyeongtaek Port ·
Dangjin Port
Gunsan Port,
Gunzang New Port
Daegu Int'l Airport Advantages of Korea's FEZs
Development Period Geographically, Korea has huge background markets with respect to China and Japan and plays a
key role as a center for trade in Northeast Asia. Moreover, strong shipping networks, air networks,
2003-2020 2003-2020 2003-2020 2008-2025 2008-2030 2008-2020
and ports have been developed to connect Korea's FEZs to every continent in the world. Linkage
Major Industries to be Attracted
of the railroad network to the TSR (Trans-Siberian Railway), TCR (Trans-China Railway), and TMGR
- Land development - Logistics - Logistics - Cutting-edge
 - Manufacturing - Int'l education
manufacturing (Automobiles,
(Trans-Mongolian Railway) is being prepared so that a direct connection to Russia, China, and
- Int'l business -C utting-edge parts - Fine chemicals - Medical complex
and materials - New materials
(Automobiles, It, Shipbuilding, Europe will be possible.
- Logistics Biotechnology, etc.) Machinery, etc.) - Textiles, Fashion
- Manufacturing
 - Tourism, Leisure
- Tourism, leisure (Automobiles, - Logistics - New and renewable - Games, Software
-C utting-edge Shipbuilding) energy - Manufacturing
- Electronics

(parts and materials,
In the areas of policy, market, manpower, and infrastructure, Korea’s Foreign Economic Zones
- Tourism, Leisure information -Tourism, Leisure
- Manufacturing (catering to chinese IT) boast some of the highest investment attractiveness of any FEZ in the Northeast Asian region.
- Biotechnology
clients) It is important to note that the Korean government actively solicits foreign investment through
Website the adoption of favorable policies. Korean can also provide strong human resources. The Korean
www. www. www. www. public’s strong desire for educational achievement, strong IT technology and inherent diligence all
maximize the productivity and cost-efficiency of tenant companies in Korea’s FEZs.

In particular, Korea’s FEZs are equipped with strong infrastructure to provide an optimum business
environment for foreign companies. Incheon International Airport, the Port of Busan, and the Port
of Gwangyang are recognized as some of the world’s best facilities. Furthermore, a large logistics
complex has been created to attract logistics companies in support of tenant companies in the
regions behind major airports and ports. All Korea’s FEZs are directly connected to suitable airports
and ports.

76 Free Economic Zones 77

II. Gateway to Northeast Asia

Korea is actively trying to attract more investment from foreign companies outside Northeast
Asia (i.e. China and Japan) and various incentives have been provided for tenant companies
to this end. In order to provide the conditions preferred by foreign companies, tax reduction,
financing, reduction of regulations, simplification of administrative procedures, and a better
settlement environment are being made available, and there are no limitations on residence
among other special zones in Korea. Thus, various facilities like manufacturing related
facilities, international airports and ports, international logistics centers, international business
complexes, education institutions and residential complexes can be set up inside the FEZs.

Korea’s FEZs will be a strategic partner for the success of residing companies as an optimal
location for foreign companies hoping to enter China, Japan in Northeast Asia and emerging
countries in Asia.

▒ Incentives and Special Laws to Attract Foreign Investment into FEZs

Strong Points of Korea’s FEZs
Companies operating in FEZs eligible for tax deductions based on the following formula:
Classification Details
Deduction = taxable revenue × foreign investment rate × tax rate
• Active Foreign Investment Support Systems and Favorable Policy Environment, including the Foreign - The above deduction applies to corporate, acquisition, registration and property taxes (including
Investment Promotion Act land taxes) and to income taxes for business owners.
Policy - The above deduction applies for three years after the generation of operating income;
• Integrated Foreign Capital Invitation Support Agency, including the Free Economic Zone Authority and Invest Korea
• Various Incentives, including Tax Reduction, Cash Support, and Financial Support Tax Cuts and business owners save 50 percent of that amount for two years thereafter.
- Also, companies are exempt from tariffs on imported capital goods for three years.
• Access to the Chinese and Japanese Markets
• The World’s 12th largest trading nation through trade with 220 Countries
• Expansion of the Market by Actively Pursuing FTAs like the Korea-USA, Korea-China, and Korea-EU FTAs • MINIMUM INVESTMENT
- Land development: USD 30 million - Manufacturing: USD 10 million
Markets • Domestic Market with World’s 12th largest GDP Growing by 5% Annually
- Tourism: USD 10 million - Logistics: USD 5 million
• Sophisticated Consumers Ideal as for Test Marketing
- Medical institutions: USD 5 million
• Leading Companies like Samsung Electronics, Hyundai/Kia Motors, and POSCO
• More than Half of the Global Fortune 500 Companies are Present in Korea
• Cash grants to establish a business and cover start-up costs
• Educated and Motivated Workforce • Private (non-bid) contracts available for publicly-owned property at reduced cost:
Financial Support
• High Labor Productivity Rent as low as 1 percent of land-clearing costs
Manpower • Outstanding Technical Capability in IT and Strong Technical Skills in Shipbuilding • The National Treasury support for infrastructure construction
• Rapidly Emerging Female Workforce
• Decreasing Labor disputes and Stable Industrial Relations
No obligation to fill a certain quota of workers with disabilities or offer paid leave.
• Incheon International Airport, the Hub of Northeast Asia Labor Regulations
• Geographically Optimal Ports
Infrastructure • Competitive Freight Conditions through High Speed Railroads and Expressways, and Future Connection to the
Tax Benefits for Foreign employees of companies operating in FEZs receive an income discount credit of 30 percent;
TSR and TCR Foreign Workers a low income tax rate of 17 percent applies to earners in certain tax brackets
• Strong IT Environment and R&D Centers

• Urban Environment with Access to Nature

• Cultural and Recreational Facilities
• Numerous Foreign Schools and High-Level Medical Services
Living Area
• House Lease Agreement and Rental Houses
• Simultaneous Interpretation Services with Cell Phones
• Foreigner Life Support Centers, including the Free Economic Zone Authority and Invest Korea

78 Free Economic Zones 79

II. Gateway to Northeast Asia

of the nearby islands. The Cheongra District is being developed as a city for international
finance and leisure. The Songdo District is being developed as a new city for international
business on the basis of IT, BT, and R&D. Harmonious development for each region will provide
foreigners residing in the FEZs with the best settlement environment for international business,
education, medical services and sightseeing.

The IFEZ has the potential to develop as a global international city as a result of its
geographical location. China is a 1.5 hour flight from Incheon, and Japan can be reached in a
similar amount of time. 51 cities with a population of at least one million or more are located
within 3.5 hours flight from Incheon. Furthermore, the metropolitan area with a population of
22 million constitutes the largest consumer market in Korea.

Incheon International Airport provides airliners to 133 cities in 41 countries, and is strategically
located to connect this large market. The ratio of transshipment from Incheon International
Airport is the highest in the Asia-Pacific region. The cargo volume is the third largest in the
world. Passenger transport volume is the 10th in the world. Two runways are being expanded
recently, and 1,058,000 m² is being added to the current area of 1,091,000 m² for the cargo
terminal so that it can more effectively play a role as the largest hub airport in Northeast Asia.
Moreover, the Port of Incheon, the gateway to the metropolitan area helps provide smooth

Korea’s Free Economic Zones exports and imports. Incheon is well connected to China, making it an optimal location for
foreign companies doing international business with China.

Incheon FEZ
The Incheon Free Economic Zone (IFEZ) is the first FEZ
designated by the Korean government in August 2003 as
an international business base. With a vision of “Building the East Sea
Best Business-Centered City in Northeast Asia by Actively
Incheon FEZ
Enabling International Business, Logistics, and Knowledge-
Yellow Sea
Based Industries with Human Resources, Companies, and
Nature”, the base’s creation will be complete by 2009. In
order to realize this vision, Incheon is being developed as an
international city with the goal of building industrial innovation
clusters, logistics networks, and a financial hub that comprise an optimal spatial organization.

The IFEZ is classified into 3 regions in total including the Yeongjong District, Cheongra District,
and Songdo District, and is being developed in a linked fashion to attain functional efficiency.
The Yeongjong District is being developed as a facility for freight and distribution for the
Incheon International Airport, a hub airport in Northeast Asia, and for sightseeing and leisure

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Busan·Jinhae FEZ Wungdong District is being developed as a base for logistics, distribution, leisure and
recreation. A large port background complex has been built up in the district to ensure it can
The Busan-Jinhae FEZ (BJFEZ) was declared in October
play a role as a logistics base in Northeast Asia, and a sightseeing and leisure complex is
2003 to make it advantageous for foreigners to invest in and
being developed by links with the south coast sightseeing industry belt.
East Sea
reside in Gangseo-gu, Busan and part of Jinhae, Gyeongnam.
Envisioned as “The Global Logistics and Business Center”, it is
The Busan New port, with current development projects of 30 berths in the BJFEZ, is creating
being developed as an optimal base for investment by foreign
Yellow Sea Busan·Jinhae FEZ a global network connecting Europe, Southeast Asia, Northeast Asia, and America. As a
large hinterland is being developed in the north, the south, and the west, nine domestic and
overseas companies are operating as of 2009, and 13 companies are applying for residence.
BJFEZ consists of five districts in Sinhang, Myeongji, Jisa,
It is also linked with railroad infrastructure, including the TSR, TCR, TMGR, etc., while Gimhae
Dudong, and Wungdong, and these districts are being
International Airport is within 20 minutes, all providing direct routes to major cities in Asian
developed in a radial shape with close linkages.
countries like Beijing, Tokyo, Manila, and Bangkok. The combination of ports, airports, and
railroads provides optimum logistics conditions.
Sinhang District is being developed as a base for logistics, distribution, international
business, and marine affairs by building a container terminal with 30 berths and a logistics
complex behind it. Myeongji District is being developed as a base supplying air freight, high-
tech parts and materials, as well as comfortable and attractive residences for foreigners.
Myeongji District is being used as a production base in Northeast Asia by a French company, Gwangyang Bay Area FEZ
Renault Motors, proving the competitiveness of its location. Jisa District is being developed The Gwangyang Bay Area Free Economic Zone (GFEZ) was
as a high-tech industry and R&D center exclusively for foreigners. Competitive infrastructure designated on October 30, 2003 to create a production base
facilities for manufacturing including automobile parts, machinery, shipbuilding machinery, for international logistics and to develop the area as a sea East Sea
and materials, this is a district where significant foreign investment is being made with a freight depot for Northeast Asia.
focus on the Busan Scientific Local Industrial Complex. Dudong District is being developed
as comfortable residential complex and industrial and electronics education and R&D center. The GFEZ is being developed by dividing it into five districts
Yellow Sea

like Gwangyang, Yulchon, Sindeok, Hwayang, and Hadong to GFEZ

make the best environment for foreign investment.

Gwangyang District is being developed as the Gwangyang container terminal and a large port
in the hinterland. Fourteen foreign companies reside in the Gwangyang hinterland as of 2009.
Gwangyang Port is an optimal base for managing 16 modern container terminals that can be
linked to the world. New materials, precision industries, iron steel, shipbuilding, petroleum and
chemicals, energy, and assembled metal industries are producing in the Yulchon District. In
particular, a 4.1km² area (out of 4.7km²) was sold in lots in the first Yulchon Industrial Complex
so that 38 companies could begin operation. Sindeok District is being developed as a center
of residence, education, medical services and R&D. Hwayang District is being developed as
an ocean leisure and sightseeing complex where a country club and a marina will be located.
Production functions like shipbuilding, ship machinery, and assembly will be located in Hadong

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The Gwangyang Port is a major transshipment base in the Northeast region functioning in expectation of an increased
the GFEZ and has been evaluated as an optimal location to perform international business. presence from foreign
Gwangyang also boasts high quality of life due to the development of its sightseeing resources companies. The FEZ has been
and cultural arts. evaluated as a particularly
suitable location for value-
added freight activities for
foreign companies targeting
the China market.
Yellow Sea FEZ
The Yellow Sea FEZ (YSFEZ) was designated with an area of
55,050,000 m² with a vision of establishing an “International
East Sea
Cooperation Base around the Yellow Sea”. The FEZ is located
in Gyeonggi-do and Chungcheongnam-do and was created
Yellow Sea FEZ
in May 2008 with a mission of “cultivating districts for
specialized knowledge creation and development and as a
Daegu-Gyeongbuk FEZ
Yellow Sea depot for export to and import from China.
The goal of the Daegu-Gyeongbuk Free Economic Zone
(DGFEZ) is to invite foreign capital, technology, and advanced
The YSFEZ consists of 5 districts in Songak, Inju, Jigok,
think tanks to the knowledge-based local manufacturing and
Poseung, and Hyangnam, and is to be developed as a center of high-tech industry. East Sea
service industries to create a knowledge innovation cluster.
Daegu-Gyeongbuk FEZ
Songak District has been created as a high-tech industry cluster for automobile parts, Yellow Sea
The DGFEZ is equipped with strong transporta tion
electronic information businesses and R&D. Moreover, it was developed as a self-sufficient
infrastructure, including international airports, high speed
city enabling international business, logistics, commercial activities, residences, and ecological
railroads, and seven expressways that put the whole country
parks. In the Inju District, a cluster of deep knowledge-based industries like displays and
within 2 hours. It is home to global companies like Samsung,
semiconductors has been created, including an international business complex with convention
LG, ExxonMobil, and Siemens.
centers and exhibition halls. Jigok District has been built up as a high tech automobile parts
cluster linked with the nearby special automobile complex. Poseung District supports high-
Moreover, the Daegu-Gyeongbuk region possesses a strong economic base in manufacturing,
tech industries like automobile parts, electronic information, and R&D, and global logistics
including electricity, electronics, machinery, steel, and fabric as well as new growth industries
with Pyeongtaek and Dangjin Port as the center, while also providing international business
like energy, IT integration & convergence, and medical services. Regional universities and
facilities and and leisure facilities like hotels and casinos. Hyangnam District is being
colleges supply 70,000 or more workers annually so that abundant human resources and a
developed as a high-tech BT industry cluster for bio-pharmaceuticals, medical devices, and
sound industrial relations culture is being created. There are also 600 or more various public
biological electronics linking existing nearby industrial complexes with the pharmaceutical and
institutes and technology research centers like the Daegu Gyeongbuk Institute of Science
IT industries.
and Technology, the ETRI Daegu Center, the Pohang Accelerator Laboratory, and the Pohang
Institute of Intelligent Robotics which provide support for R&D for various companies. The
The Location of YSFEZ is competitive in many respects, and is within one hour from the Port
region also possesses five university hospitals, six general hospitals, 61 regular hospitals,
of Pyeongtaek and Dangjin, Incheon International Airport, and a large background market.
and 25,000 or more medical personnel. Medical services are abundant and medical device
Samsung Electronics, LG Display, Hyundai Kia Motors, and Hyundai Steel have further
manufacturing is thriving, while an environmentally-friendly green city is also being created so
confirmed its competitiveness. Pyeongtaek and Dangjin are constructing a large hinterland in
that there is no inconvenience to foreigners’ daily lives.

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In the DGFEZ, a knowledge

Saemangeum-Gunsan FEZ
corridor consisting of the IT
The Saemangeum-Gunsan FEZ (SGFEZ) has been developed
Valley, Knowledge Service
to intensively cultivate new industries as well as marine
Valley, Parts Materials Valley,
sightseeing and leisure. It is to be set up in the 401 km²-wide
and Convergent Technology East Sea
Saemangeum area with the world’s longest sea wall at 33km,
Industr y Valley, is being
and the Gogunsan peninsula, which is near some 60 islands. Saemangeum-Gunsan FEZ
created and developed
in five cities, including
The SGFEZ is being developed in four districts, including the
Daegu, Gumi, Gyeongsan, Yellow Sea
Saemangeum Industrial Complex, Saemangeum Sightseeing
Yeongcheon, and Pohang,
Complex, Gogunsan International Marine Sightseeing
as well as 11 project
Complex, and the Gunsan Residence surrounding areas.
districts. The IT Valley is to
be created as a global free technology district by activating knowledge-based industries such
The large scale cluster for high-tech industries and new energy has been built in the
as IT, mobile communications, robotics, and solar energy. The Knowledge Service Valley is
Saemangeum Industrial Complex. The international sightseeing complex includes a park,
being developed as a base for the international culture industry by intensively recruiting the
golf complex, and sightseeing and leisure facilities all constructed in the Saemangeum
culture creation industry, including education, medical services, culture, and fashion on the
Sightseeing Complex. The international marine sightseeing complex includes a luxury hotel,
basis of competitive education conditions and human resources. The Parts Materials Valley
villa zone condominium, marina, casino, and water park and has been created mainly in the
is a district specializing in the knowledge-based manufacturing industry, including high-tech
coast of Gogunsan in the Gogunsan International Sea Sightseeing Complex. A comfortable
mechatronics and intelligent vehicles to upgrade the vehicle parts and machinery industry. The
residential area for foreigners includes public areas, with residential and commercial facilities
Convergent Technology Industry Valley is being established to invite future growth industries
all harmonized with the natural environment, parks, and green spaces of the Gunsan
like NT, BT, RT, and ET and R&D on the basis of abundant potential in science and technology
Residence surrounding areas.
including think tanks and the capital of POSTECH and POSCO.

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Free Trade Zones

What are Korea's FTZs?
Liberalized trade in goods and services, and the development of new integrated transport
networks and information and communication technology have brought about seismic changes
to international commerce and the logistics industry. Fierce competition triggered by such
changes has led the public and private sector to realize the need to expand business strategy
beyond national and regional boundaries and toward the world.

Market strategies are required to respond to customer needs stemming from changes in
the global market, cost savings, and quality improvement. In particular, global companies
strengthen corporate competitiveness in the world market by mapping out global market
strategies, thus manufacturers advancing into overseas markets must pay close attention
to supply chains as part of their global strategy. They also must make efforts to enhance
competitiveness by reducing inventory and financing costs and providing customer-oriented
services and additional logistics services. Accordingly, companies need to set up logistics Trade Zones to promote foreign investment and export/import logistics. In particular, Korea's
centers in ports, airports, or industrial complexes to perform integrated logistics management. Free Trade Zones are located in a hub of railway, land, and marine transportation, including
an international hub airport and ports to enhance global logistics competitiveness. Like
In addition, the trend to introduce logistics supply chains led by specialized logistics Singapore, Korea has designated airports and seaports which provide one-stop service in the
companies has accelerated with the introduction of rationalized and simplified tariff and non- global supply chain. The centers are the Port of Busan, the Port of Gwangyang, and the Port of
tariff barriers. With this trend, most Asian countries rushed to establish Free Trade Zones for Incheon.
the logistics industry (centered on logistics companies) centered on airports and seaports to
maximize economic benefits. ▒ Concepts of Korean Free Trade Zones

Northeast Asia has built a supply chain for global production and consumption since the DOMESTIC AREA FENCE Foreign Countries
(Tariff Region)
1990’s centered on China, the “factory of the world.” Northeast Asian countries established Free Trade Zone
(Non-Tariff Region)
Exemption of tariffs
Free Trade Zones based on ports and airports and provided assistance for the global logistics Levying of tariffs
Customs Omitted Carrying-in
supply chain in response to the needs of multinational companies. of goods

Customs (Gate)
Import Customs
Logistics and Production
Korea, capitalizing on its geopolitically advantageous location in Northeast Asia, shifted the Carrying-out Unloading, Transport, Storage
Carrying-in and Exhibition, Manufacturing,
center of its Free Trade Zone to the logistics industry in the 2000s from the manufacturing of goods
of goods
Wholesale, etc.
Re-export and
industry in the 1970s. With Free Trade Zones, Korea has improved its national competitiveness Transshipment
Regarded as Exports
as a logistics hub in Northeast Asia, meeting the needs of multinational companies and (Refund/Exemption)

conforming to global business standards.

Korea’s Free Trade Zones have developed as competitive regions in manufacturing and These Free Trade Zones house 43 global companies from Europe, China and Japan due to
logistics in Northeast Asia. The Korean government offers a variety of incentives to Free their strategic location, where tenant companies can address markets in Korea, Japan and

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II. Gateway to Northeast Asia

China simultaneously. In addition, many domestic and multinational companies are willing to Advantages of Korea’s Free Trade Zones
move in the logistics-centered Free Trade Zones to be developed from 2009. The strong response of multinational companies for Korea’s Free Trade Zones is largely due
to better accessibility to China, Japan and Far eastern Russia than neighboring countries,
The Korean government is ready to offer eight industrial complex type Free Trade Zones (Masan, allowing them to engage in various businesses. Another attraction is the incentives provided
Donghae, Yulcheon, Ulsan, Gimje, Iksan, Gunsan, Daebul) and five logistics-based Free Trade by the Korean government.
Zones to companies at home and abroad in response to strong interest and request for
tenancy in the port Free Trade Zones. Korea’s Free Trade Zones offer the best incentives and administrative assistance to tenant
companies, including deregulation in manufacturing, distribution, and trade, optimal
In particular, logistics-centered Free Trade Zones include five port Free Trade Zones (the Port infrastructure, low rents for land and buildings, tax reduction, and one-stop administrative
of Busan, the Port of Gwangyang, the Port of Incheon, the Port of Pyeongtaek·Dangjin, and the services so that tenant companies can do business friction-free. The Korean government
Port of Pohang), and one airport Free Trade Zone (Incheon International Airport). The Port of simplifies customs clearance on value-added logistics activities such as the movement of
Busan and the Port of Gwangyang Free Trade Zones already house 43 global companies in the goods and transfer among registered companies and the use/consumption/maintenance
form of a consortium, and companies are expected to move into the Port of Incheon and the of foreign goods, and applies zero value added taxes. In particular, the Korean government
Port of Pyeongtaek·Dangjin Free Trade Zones. removed most financial regulations such as foreign remittance that neighboring countries still
regulate. The following are major incentives offered to tenant companies in the Free Trade
Zone in Korea.
▒ Industrial complex Free Trade Zones (As of late 2008)
Classification Masan Iksan Gunsan Daebul Donghae Yulchon Ulsan
Designation Year '70.01 '73.10 '00.10 '02.11 '05.12 '05.12 '08.12 '08.12 Major incentives offered in ftzs
Area (km²) 954 310 1,254 1,156 248 343 1,297 992 Duties withheld
Tenants • Goods required for production and manufacture such as facility materials and raw materials
(foreign invested 98(52) 31(6) 27(6) 30(21) - 1(1) - -
• Goods held by logistics companies or traders for some period (goods for intermediate trade, etc.)
Employment 7,510 1,294 2,326 - 20 Tax incentives
Foreign Investment 50 • Manufacturing companies that can invest more than ten million dollars, logistics companies that invest
128 million 5.3 million 20 million 63 million - more than five million dollars
(USD) thousand
 Corporate income tax, income tax, 100% reduction for three years, 50% reduction for two years
Exports (USD) 3.3 billion 1.5 billion 0.14 billion 2.8 billion - -  Property Tax, Acquisition tax, Registration tax, Composite land tax: 100 to 50% reduction for fifteen years at

• Application of zero value-added tax

 Domestic goods supplied for export to Free Trade Zones
▒ Logistics-centered Free Trade Zones (as of late 2008)  Goods and services provided by one tenant company to another

Classification Busan Port Gwangyang Port Incheon Port Pohang Port Incheon Int'l Airport Other
Designation Year 2002.01 2002.01 2003.01 2008.12 2005.04/2007.12 • Provide one-stop service, including construction permits, factory establishment, tax reduction, reporting of
foreign investment
Area (million m²) 5,451 6,755 2,294 709 3,015
Tenants 15(0)
(Foreign Invested 25(22) 26(25) *Ten companies -
Companies) moved in.
Freight Volume 19.97 million ton 9.82 million ton Stevedores - -

Investment Attraction USD 455,900,000 USD 343,900,000 Korea tenant

- USD 108,900,000
(Foreign Investment) (USD 80,794,000) (USD 108,155,000) companies

* Pyeongtaek Port is scheduled to develop 1.428 million m²

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Rents in the Port Free Trade Zones

Rents in Korea's Free Trade Zones are extremely competitive, at less than half the rent in
China’s coastal free trade zones. Most tenants in the Port Free Trade Zones receive preferential
rents because they meet the requirement of a minimum 10% foreign stake. The applicable
rents are different for each port, but are all very attractive.

According to a survey of tenants in late 2008, rents in the Free Trade Zones were recognized
as the lowest in the world, while the geopolitical location and logistics infrastructure of Korea
were rated as excellent. External factors such as the appreciation of the Korean Won have
brought about positive effects like lower labor costs and export prices.

Port FTZ Conditions Rents

Basic rent General Tenants KRW 300 per month per m²

Port of Logistics companies among foreign

Preferential rent KRW 150 per month per m²
Busan invested companies

Rent based on publically Tenants not suitable for the purpose of Publically Announced Land
announced land prices designation of free trade zone Price×50/1,000 (annual)

Basic rent General Tenants KRW 260 per month per m² Industrial Complex Free Trade Zone
Port of
Busan/ Logistics companies among foreign
Preferential rent KRW 40 per month per m² 3 years
Busan New
invested companies
Masan Free Trade Zone
Rent based on publically Tenants not suitable for the purpose of Publically Announced Land
announced land price designation of free trade zone Price×50/1,000 (annual) The Masan FTZ is the first industrial complex only for foreigners.
It was designated as a Free Export Zone in 1970. However,
Basic rent General Tenants KRW 200 per month per m²
it was designed as a Free Trade Zone in 2007 and plays a
East Sea
Port of Logistics companies among foreign
Preferential rent
invested companies
KRW 30 per month per m² central role in Korean exports by attracting foreign investment
Rent based on publically Tenants not suitable for the purpose of Publically Announced Land
companies. It is recognized as successful model of Free Trade
Yellow Sea
announced land price designation of a free trade zone Price×50/1,000 (annual) Zones among 1,000 FTZs in 120 countries. It added 160,000
m² in December 2006, thus the entire area was 953,000 m².
Masan FTZ
Rents in the Port Free Trade Zone in Korea are uniform despite the presence of foreign stakes
and are more favorable than those in Japan and China. In addition, the buildings are equipped Masan and Changwon, the hinterlands of the Masan FTZ, are
with an EDI system based on the latest technology, enabling tenant companies to do business representative industrial clusters that have experienced research manpower, educated labor, and
in an optimum environment. high levels of technology. The two cities are favorable for value-added high-tech companies.

▒ Rent of building (composite logistics warehouse) in the Port Free Trade Zone Masan FTZ has continued to expand through renovation and modernization because it
continues to accommodate foreign invested companies. A project to modernize facilities has
Classification Rent Applicable period
been underway from 2009 to 2014. When the project is completed, tenant companies will
Port of Busan KRW 641 per month per m²
3 years increase to 130 companies from the current 94, and annual exports will rise to USD 10 Billion
Port of Gwangyang KRW 510 per month per m²
from USD 5 Billion. Employment will increase to around 20,000 jobs from 7,000.

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Iksan Free Trade Zone shipbuilding-related companies and one machinery manufacturer, giving the shipbuilding industry
The Iksan FTZ is the second Free Export Zone designated the lion’s share of the zone. Foreign companies that want to do business in the shipbuilding
as such in October 1973. After the related law was revised, industry in Korea will be benefit the most.
it was designated as a Free Trade Zone. Iksan FTZ will be East Sea
renovated into a national industrial complex where both The Daebul FTZ has provided standard factories with KRW 70 Billion in investment since May
foreign and domestic companies can easily enter beginning in 2008. Standard leased factories consist of 4 buildings for light industry, 2 buildings for heavy
2011, after it is successfully sold in 2010.
Yellow Sea industry and warehouses. The greatest advantage of the standard leased factory is the additional
Iksan·Gunsan FTZ rent incentive of KRW 700-800 per month per m².

Gunsan Free Trade Zone

Donghae Free Trade Zone
The Gunsan FTZ is situated in the Gunjang National Industrial Complex. The 1.254 million
m² area was designated as a Free Trade Zone in October 2000. The FTZ is divided into three The Donghae FTZ was designated on a 248,000 m² site
districts, Production, Logistics, and Support. The Production District provides two types of in December 2005 for development as a base for trade
factories; Self-owned factories (a tenant company leases the site from the Korean government in Korea's East Sea Area and northward trade. Advanced
East Sea

to set up a factory) and standard factories (a tenant company leases a government-owned manufacturing and logistics industries related to IT, BT and
factory). A standard factory is a useful system where the Korean government is responsible new materials will be intensively developed in the FTZ. The
Yellow Sea
for construction and maintenance while a tenant company can be immersed in business Donghae FTZ has favorable conditions to securing raw
activities only. In the Logistics District, the Korean government sets up a joint logistics center materials from Northeast Asia (including Russia) and excellent
Donghae·Yulchon FTZ
and offers it to tenant companies at a highly competitive price. The Support District provides import/export conditions. It has the Donghae Port and
conveniences for tenant companies such as production support facilities, public facilities, Yangyang International Airport in its vicinity, which will help
employee welfare facilities, and sports and fitness facilities. facilitate import/export activities.

The Gunsan FTZ spans a 29.091 million m²site on industrial land, including Gunjang National
Industrial Complex. New sites are also available in the FTZ because of the Saemangeum Yulcheon Free Trade Zone
Reclamation Project. It has very favorable conditions as a growth base for the automobile The Yulcheon FTZ was designated in December 2005 to set up a place where companies can
industry, including GM Daewoo, TATA Daewoo Commercial Vehicle, and the Automobile Parts freely do business and international trade without barriers, and to attract foreign investment.
Complex. It is only two hours away from the capital city, Seoul, and within one hour from Yulcheon 1 Industrial Complex placed in the Port of Gwangyang Free Trade Zone will be built
Daejeon and Gwangju. It is expected to play a gateway to the Administration Complex. on a 9.157 million m² site by 2011.
The Yulcheon FTZ has the Gwangyang Container terminal nearby, so it is easy to carry in and
carry out goods and raw materials. The average annual temperature is 13.8C and the average
Daebul Free Trade Zone annual rainfall is 13.93 mm. Relative humidity is 68% and the average wind speed is 4m/
The Daebul FTZ was built on a 1.156 million m² site in sec. It has optimal weather conditions. With its favorable location and conditions, Yulcheon 1
November 2002. Occupancy rates exceeded 70% via linking East Sea Industrial Complex has already received LOIs (Letter of Intent) from 17 companies who want to
with the shipbuilding industry cluster project. Currently, a total move in. Major industries include shipbuilding, heavy industry, and the petrochemical industry
of 16 companies are operating there, including eight Korean Yellow Sea
for tenant companies POSCO and Hyundai HYSCO.
companies (including Hyundai Mipo Dockyard) and eight foreign Daebul FTZ
companies (including K.S. Yanase Industry). There are 15

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Ulsan Free Trade Zone

The Ulsan FTZ was designated in December 2008 to create a
site that combined advantages in logistics, international trade
and production and grew into a cluster in connection with East Sea
the Northeastern industrial belt. To do this, the FTZ plans to
create a sophisticated industrial structure based on advanced
Yellow Sea
industries like mechatronics and bioscience and invest a
total of KRW 260.7 Billion to build production, logistics and Ulsan FTZ

support facilities on a 1,297,482 m² site from 2009 to 2012.

The Production facilities will house Japanese manufacturing
companies (assembly/metal, electronics/electric) and advanced knowledge-based
manufacturing companies (mechatronics and bioscience). The logistics facilities will house Airport · Port Free Trade Zones
storage & warehouse companies, transport companies and trading companies. In addition, the
support facilities will accommodate production support facilities, public facilities and welfare Incheon International Airport Free Trade Zone
facilities. The FTZ will make efforts to remove inconveniences for tenant companies. The Incheon International Airport Free Trade Zone (IIA FTZ)
was designated on a 3.015 million m² site in April 2005 as
The Ulsan FTZ will hasten development by 2012 so as to offer low-cost land to foreign part of a strategy to develop IIA as a hub airport in Northeast East Sea
companies that want to move into the FTZ. In addition, the conditions for tenant companies Asia. It is divided into two districts, the freight terminal area
have been dramatically improved as it is being developed in connection with Ulsan New Port, and the airport logistics complex. It is located east of the
Yellow Sea
KTX Ulsan Station neighborhood development and Ulsan New City. It is also working with the airport. The Four Freight Terminals link aircraft with overland
automobile, shipbuilding and petrochemical industries which are the core industries of Ulsan. transport to help tenants attain smooth transport, storage,
and handling. It operates 24 hours a day, 7 days a week. It
also has room for staged expansion in response to increasing
Gimje Free Trade Zone demand. It has installed information processing systems that can handle information on freight
The Gimje FTZ performs supplementary functions to the movement and storage in real time. The Airport Logistics Complex provides easy investment
Seamangeum/Gunsan Free Trade Zone and is expected to procedures and an appropriate business environment for multinational and global logistics
create synergy effects by accelerating inland development in companies through rapid freight handling, incentives, and simplified customs clearance.
East Sea
Jeollabukdo and attracting foreign investment. The FTZ will be
set up on a 991,740 m² site with KRW 70.5 Billion investment The IIA FTZ is located next to Incheon International Airport (IIA) which ranks second in
by 2011. It plans to attract auto parts, machinery and
Yellow Sea freight traffic in the world. IIA has optimal conditions for transshipment to major cities in
Gimje FTZ
renewable energy industries. It expects to house 30 tenant Northeast Asia including Seoul, Korea, Tokyo, Japan, and Shanghai, Qingdao, and Dalian in
companies, send out USD 850 Million in annual exports, and China. Compared with China which developed facilities for passengers, IIA was designed to
create around 4,500 jobs by 2011. simultaneously handle freight and passengers, thus providing the most optimal airport network
The Gimje FTZ will lay out Production, Logistics, Support and Public Facility districts, and and infrastructure. For this reason, more and more Chinese air freight is coming to IIA via boat
tenant companies will be given various tax incentives, including deregulation, low land rent, for transshipment at IIA.
and tariff exemptions.
The IIA FTZ has already housed 22 multinational companies. In particular, 14 logistics companies
moved in to the Airport Logistics Complex, which will reinforce the advantages of the IIA FTZ.

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The Port of Busan Free Trade Zone The Jungma reclamation site at the the Port of Gwangyang FTZ was sold to Steinweg, a
The Port of Busan FTZ was designated on a 5.415 million warehouse company on the LME (London Metal Exchange). Since its move to the the Port
m² site in January 2002 to add value to the Port of Busan, of Gwangyang FTZ, Steinweg has grown rapidly and handles the largest container traffic in
which ranks fifth in container traffic in the world, and to China, Japan and Northeast Asia.
East Sea
facilitate foreign investment. In 2007, the FTZ was expanded
to 5.505 million m² site to establish an international shipping The Port of Gwangyang FTZ is a duty-free area and hailed as the best place for transshipment
supplies distribution center, and to establish the site around
Yellow Sea and assembling and processing of carried-in goods from overseas.
the LME warehouse within the port. With this expansion, Busan Port FTZ

transaction and logistics costs will be reduced due to logistics

clustering, while the financial industry will develop further. The Port of Incheon Free Trade Zone
When the logistics complex in the hinterland is completed, the creation of added value will be The Port of Incheon FTZ was designated on a 2.294 million
accelerated due to facilitated foreign investment. m² site in the Inner harbor and hinterland of the Port of
Incheon in January 2003. An additional 111,000 m² site East Sea
The Port of Busan FTZ has completed its second stage and companies have moved in. The at the South Port container terminal was designated in
Incheon Port
first stage commenced successful operations in 2006. The Busan New Port hinterland (FTZ, September 2008 to be used as a berthing facility and off- FTZ
Yellow Sea
419,000 m²) in the first and second stages housed nine companies. The Dongbang Logistics dock container yard. The expansion of the FTZ will strengthen
Center (37,000 m²) is now into full operation. the competitiveness of the logistics industry as it can create a
port cluster in connection with the Incheon FTZ.
The Ministry of Land, Transport and Maritime Affairs plans to offer the 1.421 million m² South
Container hinterland and the 3.579 million m² Ungdong District at very competitive prices by The Port of Incheon is located in the major metropolitan area of Korea which has enormous
2015. When this is completed, value-added industrial activities will be enhanced and Busan growth potential, and across from China, a vast market. It is also close to the Incheon
New Port will truly be a global logistics hub. International Airport, allowing for the creation of an international transport network. It is
recognized as a logistics-centered port in the vicinity of the metropolitan area. With the
increased awareness of the Port of Incheon in the wake of the expansion of the FTZ, the port
The Port of Gwangyang Free Trade Zone plans to increase line services to China, Japan and Northeast Asia..
The Port of Gwangyang FTZ covers a 6.755 million m² site
and was designated in January 2002. Subsequent expansions
were made to create container traffic and carry out value- East Sea
added logistics activities in conjunction with the second
container port in Korea, the Port of Gwangyang.
Yellow Sea
Gwangyang Port FTZ
With the expansion of the Port of Gwangyang FTZ, new
investments are expected to continue. For the logistics
complex in the hinterland completed east of the Port of
Gwangyang FTZ, there are 23 foreign invested companies with around KRW 300 Billion in
investments. Forecasts are for 8.74 million tons of freight and 1,105 jobs. Economic benefits
such as KRW 323.6 Billion of investment will be induced.

98 Free Trade Zone Free Trade Zones 99

II. Gateway to Northeast Asia

As of 2008, there were ten resident companies, and they were mostly bonded warehouse of KRW 1,391.8 Billion and 10,803 jobs. Indirect benefits include the revitalization of the
operators. However, foreign logistics companies will increase their investments with the distribution industry in the hinterlands, enhanced export competitiveness, and procurement of
expansion of the FTZ. raw materials at low cost due to the concentration of industries. When the Pyeongtaek·Dangjin
FTZ is completed and its tenant companies start operation, the Port of Pyeongtaek·Dangjin will
grow into a gateway to the metropolitan area and a central port of Korea's East Sea Area.
The Port of Pohang Free Trade Zone
The Port of Pohang FTZ was designated in December 2008 Along with the Port of Incheon, the Port of Pyeongtaek·Dangjin has a role as a central port in
with an aim of balanced development of the eastern coast increasing trade volume with China. Trading volumes are constantly increasing and the port
of Gyeongbuk. The FTZ diversifies production and logistics scores the highest traffic growth among Korean ports. Foreign invested companies that moved
East Sea
bases in the region and offers new opportunities to foreign in to the Port of Pyeongtaek·Dangjin FTZ will accordingly set up the port as a base for trade
companies by distributing national industrial facilities and port with China. As the neighboring area is designated as the Yellow Sea Free Economic Zone,
Yellow Sea
traffic. the Pyeongtaek·Dangjin FTZ will be able to offer a competitive living environment including
Pohang Port FTZ residences, medical services, education, tourism and leisure.
Pohang, which is a steel city with excellent R&D capabilities,
is expected to serve as the hub of regional development
and will have the opportunity to reinvent itself as a logistics center for Korea's East Sea Area,
encompassing Northeastern China and Far Eastern Russia, by
capitalizing on geographical advantages. With this potential, the
the Port of Pohang FTZ will offer new business opportunities to
foreign invested companies in Northeast Asia and Korea.

The Port of Pyeongtaek · Dangjin Trade Zone

The Port of Pyeongtaek·Dangjin Free Trade Zone was
designated in March 2009 to attract domestic and foreign
logistics companies to create new traffic. In this area, the
logistics industry will be developed and the FTZ will present
itself as the region’s most favorable area for foreign invested
companies. In the first stage of the project designated in
2009, the construction
of infrastructure will be
completed by March 2010.
East Sea

The cargo volume of the Port

of Pyeongtaek·Dangjin FTZ is
Pyeongtaek·Dangjin Port FTZ
Yellow Sea
expected to increase 637,000
TEU and create added value

100 Free Trade Zones 101

II. Gateway to Northeast Asia

Advanced IT, HR Infrastructure

and other research institutes at home and abroad. Its goal is to develop professionals with
knowledge and hands-on experience. The GLMP (Global Logistics Management Program for
CEOs) introduces management strategies with the latest trends in the logistics industry, and

for a Logistics Hub provides opportunities for top management of logistics companies to build businesses and
relationships and pursue logistics systems’ innovation through benchmarking successful
The Korean government has spared no effort in fostering specialized, talented manpower to
enhance national and private sector competitiveness. The results of such efforts are visible in
Logistics professionals fostered through these education programs can work successfully in
government-led education projects like: (1) “Brain Korea 21,” a specialized university project
the logistics industry in Northeast Asia and develop themselves as global professionals in the
aimed at fostering professional manpower and industry-academic cooperation; (2) university
specialization support projects, where universities in the metropolitan area become specialized
through enhanced university competitiveness and the fostering of professional manpower by
enhancing specific areas for comparative advantage; and (3) the New University for Regional
Innovation (NURI), a support project for the Graduate School of Logistics aimed at developing
professional logistics personnel at an international standard that will lead innovation in
corporate logistics and the supply chain.

These projects are funded by the Ministry of Education, Science & Technology while the
project to support the Graduate School of Logistics is funded by the Ministry of Land,
Transport, & Maritime Affairs. The educational programs of the Graduate School of Logistics
will be provided in English only in conjunction with the international cooperation programs of
various universities around the world. The projects also focus on fostering global level talent
through joint research projects with prominent faculty. In addition, under the industry-academic
collaborative programs, internships will be available to develop hands-on knowledge and
skills. The graduate school is developing online education programs jointly with the Chartered
Institute of Logistics & Transport (CILTS) and encourages the acquisition of international
certification. Moreover, it is also offering scholarships to develop better logistics professionals.

The Graduate School of Logistics offers comprehensive logistics curricula including a

Masters of Global Logistics Management (MGLM), Masters of Logistics Management
(MLM), Master of Science in Logistics (MSLog), Ph.D. in Logistics, and the Global Logistics
Management Program for CEOs (GLMP).

The MGLM (Master of Global Logistics Management) is an MBA-level, specialized master’s

degree program that targets mid working-level managers who have built a career path. The
Master of Science in Logistics (MSLog) and Ph.D. in Logistics (Ph.D) are programs built in a
comprehensive education and research system in connection with the Asia Pacific Logistics
College, Jungseok Research Institute of International Logistics and Trade, overseas universities

102 Advanced IT, HR Infrastructure for a Logistics Hub 103

II. Gateway to Northeast Asia

The Logistics Industry in Korea Major logistics companies in Korea

Shipping companies account for seven of the top ten logistics companies and eleven of the
top 20 logistics companies in terms of sales revenues.
This indicates that logistics services are still concentrated in international transport like
Status of the logistics industry in the national economy
shipping rather than specialized logistics service providers that offer full service to shippers
The overall perception of Korea’s logistics industry has dramatically improved in recent years.
in Korea. This clearly shows a structural trend towards shipping companies, which take up
Nevertheless, to some degree the industry is still regarded in Korea as less important than
74.8% of the total sales among the top 20 companies.
areas like sales, production, or marketing. Recently, the logistics industry has begun to be
recognized as a new growth engine of the national economy, as it is seen as an independent
There are nine representative specialized logistics companies (including Globis, Korea Express,
industrial form by the Korean government.
Samsung Electronics Logitech, Pantos Logistics and Hanjin with sales of KRW 8.51 trillion in
total). Specialized logistics companies accordingly have strengthened their presence in Korea.
▒ weight of the logistics industry in Korea’s economy (2007) The Korean government introduced a certification policy for full-service logistics companies
Classification All Industries (A) Logistics Industry (B) Weight(%, B/A) aiming to globalize the Korean logistics industry in January 2006.
Number of Companies 3,189,181 171,587 4.5%

Number of Employees 15,728,028 566,835 3.6%

Sales Revenue (a billion KRW) 1,864,067 82,342 4.4%

The Korean government is making efforts to improve social awareness of the logistics industry
in consideration of its weight in the national economy.

Based on sales revenues by industry in 2007, the logistics industry of Korea ranked eighth
following distribution (retailing and wholesaling), construction, electronics, automobiles,
chemicals, primary metals, and coke/refined petrochemical products and nuclear fuel.
It represented 4.4% of the national economy. In terms of added value to sales, it scored
35.83%, far higher than the 22.7% recorded for of the manufacturing industry, though falling
behind retail and wholesaling, at 38.39%. It is regarded as an industry that can create high
added value for the economy in terms of employment.

The logistics industry was still in its infancy until the 1990s in Korea. In the early 1990s, large
companies began to recognize the logistics industry as the last stage in ensuring market
competitiveness through cost savings and improved customer service based on efficient
logistics. Since the late 1990s, the Korean government has driven various policies to develop
the industry as one of the core national industries of the 21st century.

As of 2006, the national logistics cost, an indicator of total cost consumed for logistics activities
in Korea, was KRW 106 trillion. In real terms, it grew 4.44% annually. Given the potential and
current market for logistics, total sales hovered around KRW 82 trillion in 2007, so the logistics
industry still has potential to double its current size in light of ripple effects in related industries.

104 The Logistics Industry in Korea 105

II. Gateway to Northeast Asia

▒ Ranking of major logistics companies in Korea ▒ Present logistics subsidiaries of large-sized companies
Ranking of Company
Sales (a year, KRW 100 million)
Companies Business Sales (as of 2007) Recent Trends
2007 2006 2007 2006 2005 2004
1 1 Hanjin Shipping Shipping 69,360 60,514 59,801 62,021
· Overall management of volumes for related subsidiaries like Hyundai Mobis and Hyundai Steel and partner
KRW 2.510 trillion companies
2 3 STXPANOCEAN Shipping 48,734 27,844 27,924 25,863
· Connection with globalization of Hyundai Motor Co., expansion of overseas networks and rising overseas sales
3 2 Hyundai Merchant Marine Shipping 48,456 47,342 48,456 51,186 Korea Express
4 4 Glovis Logistics 25,102 18,851 15,408 9,028 · Specialized logistics company of the former Dong-A Business Group
KRW 1.267 trillion
· Inclusion of Geumho Asiana Group, incorporation of Korea Express International Logistics
5 8 Korea Line Corporation Shipping 19,713 11,502 11,093 11,501
Samsung Electronics Logitech
6 5 SK Shipping Shipping 18,712 17,755 15,832 16,726
· Samsung Electronics’ logistics sales
KRW 1.140 trillion
7 6 EUKOR Car Carriers Inc. Shipping 15,823 15,410 15,560 14,837 · Handling of Samsung Electronics only after changing the company name to Samsung Electronics Logitech

8 7 Korea Express Logistics 12,669 11,703 11,717 11,190 Pantos Logistics

Samsung Electronics KRW 1.020 trillion · Handling export / import volumes from LG Electronics
9 10 Logistics 11,399 8,283 8,256 7,000
10 12 Samsun Logix Shipping 10,907 7,148 9,447 8,441
KRW 759.8 billion · Specialized logistics company of the Hanjin Business Group
11 9 Pantos Logistics Logistics 10,203 9,401 10,009 9,415
Hyundai Logistics
12 11 Hanjin Logistics 7,598 8,025 7,427 6,618

13 20 Daeyang Shipping Shipping 7,244 3,007 7,933 9,711 · Door-to-door service provider of the Hyundai Business Group
· Started as Asia Merchant Marine, changed company name to Hyundai Logistics Corp. in 1993
KRW 564.0 billion
14 13 Hyundai Logistics Logistics 5,640 5,114 4,664 4,292 · Revamped into a specialized door-to-door delivery and freight forwarding company since 1997
· Changed company name to Hyundai Logistics in 1999
15 15 CJ-GLS Logistics 5,194 4,780 4,407 3,786
16 14 Heunga-A Shipping Shipping 4,833 4,993 5,420 5,292
· Started business with cargo from CJ Group
KRW 519.4 billion · Aaccomplished 50% of third-party volume through active marketing
17 17 Sebang Logistics 4,612 4,102 3,817 3,679
· Acquired Singaporean Accord and set up CJ-GLS Asia
18 16 KMTC Shipping 4,519 4,520 4,787 4,916
Dongwon Industries (Past) Reseuko
19 18 Sinokor Merchant Marine Shipping 4,172 3,489 3,447 3,471 · Started as a Korea-Japan joint venture company in 1997, logistics company for food and beverages
KRW 351.0 billion · Incorporation in Dongwon Industries in December 2005
20 - Hi Logistics Logistics 2,705 2,106 1,559 1,499 · Including merchant sales (logistics sales of 69.9 billion KRW in 2006, representing 21% of total sales)
Total 337,595 275,889 276,964 270,472 KIFT
· Started a private operator of Gunpo Integrated Freight Terminal
KRW 302.8 billion
· Handling exports of Geumho Tire

Hi Logistics
Present logistics subsidiaries of large-sized companies
· Started business with domestic sale logistics for LG Electronics in 1999
KRW 270.5 billion
Most specialized logistics companies are subsidiaries of large conglomerates (or business · In 2004, changed company name to Hilogistics and ran business for subsidiaries of LG Group

groups) in Korea. They laid the foundation for growth based on sales from other subsidiaries Hansol CSN

within the same business group and have tended to develop into third-party logistics · Started business with goods from Hansol Paper
KRW 251.5 billion · Transformed to a specialized logistics company from an online door-to-door delivery company including
companies. These business groups are actively pursuing the expansion of businesses to cyber logistics

overseas markets through the globalization of subsidiaries based on their logistics subsidiaries. Lotte Logistics

KRW 28.4 billion · Stated business with goods from Lotte Group, including Lotte Department Store and Lotte Mart

106 The Logistics Industry in Korea 107

III. Business Opportunities
in Korea
Competitive Business Models
Success Stories
III. Business Opportunities in Korea

Competitive Business Models Production district logistics intensive

management model
The Korean government is putting a lot of efforts into establishing a business-friendly This business model is designed to promote services through intensive logistics
environment in Free Economic Zones. As part of these initiatives, it is developing market- management in production district areas.
oriented business models, on a national-level, designed to promote and support the
business activities of corporations moving into the region.
Korea is one of China’s closest neighbors, and is well placed for intensive management of import/
In particular, the Ministry of Land, Transport and Maritime Affairs and the Ministry of
export through highly-trained logistics personnel, and a state-of-the-art logistics system.
Knowledge Economy have presented a variety of business models as described below
to enable more efficient utilization of Free Economic Zones and Free Trade Zones in With this logistics stronghold utilized as a strategic base to provide logistics services through
integration and joint management of industrial production, corporations are expected to enhance
connection with the international division of labor in Northeast Asia, with FEZs focusing on
customer services by accelerating delivery of goods directly to customers.
logistics and FTZs focusing on manufacturing process..
More specifically, multiple products in small quantities from all over China can be brought together
into ports in Korea’s Free Trade Zones to be sorted through reliable logistics services before they
are delivered directly to major customers in the US, Europe, and elsewhere. Businesses are able
to benefit from more cost reductions with the recent depreciation of the Korean won vis-à-vis the
Chinese Yuan.

Case Study: China-based company L had few problems with supply & demand for individual products for
its affiliates but, due to separate logistics system, distribution costs for the entire group were increasing.
It is now actively engaged in feasibility studies of models to rectify this problem.

Utilization Effects
The Company can integrate logistics system of affiliates across the entire group as described below
and then enhance the quality of service and the image of the group as a whole.

Services through intensive logistics management

in production district areas

• Comprehensive logistics service in the row

materials districts LG in China
• Direct delivery to customers
(Tianjin, Shenyang, Shanghai, etc.)
Tianjin Dalian
Qingdao Investment amount: Undecided
Shanghai Ports concerned: Port Hinterland Complex of Korea
Major business: Intensive management and
distribution of electronic appliances
Free Trade Zones of Korea (Logistics centers) - Logistics services in individual factories
: Provides Various incentives, Competitive rent, - Group-level comprehensive logistics service
Quality services

110 Competitive Business Models 111

III. Business Opportunities in Korea

Quality logistics service model Raw materials supply & demand

Service promotion type management model
This business model is designed to promote services through flexible responses to This business model enables a stable supply of raw materials and creation of value added.
customer requirements.

Feasibility Feasibility
The import of price-competitive consumer goods manufactured in China to Japan is on the rise, Competition to acquire raw materials has heated up recently due to fluctuating prices and an
but due to problems in meeting Japan’s rigorous quality management criteria, customer complaints unstable supply of raw materials, and corporations are increasingly interested in securing a stable
have been frequent. supply of resources. This business model is designed for Chinese and Japanese corporations
experiencing difficulty in procuring high-priced raw materials subject to market fluctuation. Large
Chinese agricultural and fishery products whose safety status has not been confirmed go through a corporations or logistics companies that need to trawl the whole of China for raw materials will
state-of-the-art quarantine system within the Port Free Trade Zone in Korea, designed to quarantine be able to do so in a stable manner by utilizing the Port Free Trade Zone of Korea while enjoying
products that require rigorous quality management and the shortest possible lead time. Export to economic benefits due to protection from excessive price fluctuations.
Japan as well as distribution for domestic consumption in Korea can be significantly enhanced
through a well-organized feeder network.
Case Study: Company L currently residing in the Gwangyang Port Free Trade Zone has enjoyed high
profits by engaging in storage, delivery, and quality management of non-ferrous metals targeting
Case Study: Korea-based company “H” is equipped with a frozen warehouse facility and engages in the  Northeast Asia and Far eastern Russia, while China-based company L in Tianjin is considering using
processed export of frozen foods between China and Japan by utilizing Korea's rigorous animal and plant the Gwangyang Port Free Trade Zone to source raw materials throughout China (including copper, grain,
quarantine system, as well as a variety of feeder lines, including the Port of Busan. aluminum and etc.).

Utilization Effects Utilization Effects

An additional amount of value can be created through service promotion and superior product The company is able to both promote product competitiveness and obtain arbitrage profits at the
management through increased product reliability. same time through a stable supply of raw materials.

Promotion of logistics services through flexible response Enhanced logistics service through stable use and
to customer requirements supply of raw materials

• Advanced refrigeration warehouse

• Efficient logistics management
Additional Exports
products Korea H group (Busan, Seoul etc.) China-based L group (Tianjin)
Dalian Various Investment amount: Undecided Timely Supplies Investment amount: Undecided
Tianjin Efficient Inventory
feeder networks Ports concerned: Busan Port Logistics Complex Management Ports concerned: Gwangyang Port Logistics Complex
Agricultural Qingdao Qingdao
& marine Major business: Intensive management for Major business: Intensive management of distribution
products distribution of frozen fishery products of raw materials
Shanghai - Intermediary processing trade for frozen fisheries Shanghai - Supplying all China with raw materials
- Expanded Japanese market thru enhancement of service quality - Supplying materials within China through the Gwangyang port
Rigorous management + Economies of scale Creating additional values through
(cost savings) price controls

112 Competitive Business Models 113

III. Business Opportunities in Korea

Brand image utilization model Overseas market entry model

Market expansion type
The business model is designed for Chinese manufacturers that seek entry into US,
The business model is designed to avoid the effect of the so-called ‘China Discount’ Japanese and European markets with the Korean market utilized as a test bed.
and ‘China Blocking’ in the US and European markets (major export targets of Chinese
products) and to create more added value.
A newly-established Chinese electronic company A in Qingdao delivers its products through the local
Feasibility central logistics center but is considering transferring delivery to the Port Free Trade Zone of Korea.
This business model aims to create added value by utilizing relatively high awareness of the Korean The company is preparing to conduct a market test on their new products by utilizing the demand-
brand. Many Chinese manufacturers need new survival strategies due to lower brand image, rising oriented tendencies of Korean customers to verify market feasibility for their products before
labor costs, and appreciation of the Yuan. Chinese manufacturers are making various attempts to exporting to the global market.
shift production portfolios from low-priced products with cheap labor cost to higher end products.
Case Study: The China-based H group is seeking entry into the Korean market with the third largest
This business model is designed to transfer products without strict production district regulations market share and into the US electronic appliance market with the 10th largest market share through the
and with significant tax break effects due to multilateral FTAs from the current Chinese production utilization of this business model.
base or assembly factory to the Port Free Trade Zone where they are processed, assembled and
then exported with the Korea brand.
Utilization Effects
Case Study: The China-based K group imports semi-assembled products from China and processes them
The same company endeavors to expand its market share in Korea, an enthusiastic market for
in Korea before exporting them (it accomplished 10 Million Dollars in exports and profits within one year electronic appliances, seeking to be ranked third by 2010.
since establishment in February 2005).

Utilization Effects
The group is guaranteed to get a delivery price 20% higher than the previous one.

Enhanced product awareness through rigorous verification

Revenue increase by 10~20% for exports via Korea in the Korean market

Market expansion through

China Kingking Group (Shandong) reductions in lead time
10% revenue increase China Haier Group (Shandong)
Investment amount: KRW 50 billion + KRW 200 billion
Investment amount: Undecided
Ports concerned: Busan Port + Gwangyang Port CDC in Korea
Ports concerned: Busan Port + Gwangyang Port
Logistics Complex
Logistics Complex
Major business: Candle manufacturing, delivery to
Major business: Electronic appliance industry
- Expanded market share in Korea and Japan
- Semi-manufacturing in China <–> Export with Korean brand - Expanded overseas market through verification in the Korean
(10% revenue increase) market
- Logistics service with added value

114 Competitive Business Models 115

III. Business Opportunities in Korea

Marine & air logistics management model Integrated delivery management model
Cost reduction type
This business model is ideal for Chinese and Japanese logistics companies that source
The business model is designed to ensure a stable supply of cargo within a short period of products from multiple regions and that distribute to multiple regions as well.
time along with cost reductions.

Feasibility This business model is designed to reduce logistics cost and delivery time by delivering multiple
Companies that deal with high-priced or seasonal products (fiber, electronics, etc.) are able to products in small quantities directly to each destination in Japan through a feeder network well-
accomplish timely delivery of products that used to require mid-term product delivery periods (approx. established around Korean ports connecting Korea, China and Japan.
one week) by conventional air carrier transportation along with additional distribution cost savings by Land transportation (trucking) through distribution centers in major ports in Japan involves a number
utilizing this business model. of problems, including an increase in distribution costs when delivering products around Japan,
environmental pollution, and traffic congestion. Therefore, this model will not only bring about a
reduction in distribution costs but also establish an environmentally-friendly import distribution
Case Study: Company E based in Tianjin, China (a multinational logistics company) has expanded system within Japan through environmentally-friendly marine transportation.
business through cost savings and the introduction of various services since it adopted this business
model in 2005
Case Study: The Japanese company M began its business from December 2005 and an increasing
number of Japan-based logistics companies have established corporations in the Port Free Trade Zone of
Korea to conduct business.
Utilization Effects
Although it takes two or three days more than a direct freight flight from China to US, this can save
some USD 2,000 or more for 40ft cargo. Utilization Effects
These companies are able to save on transportation costs, indirect tax and administrative costs, etc.
by as much as KRW 200,000 to KRW 300,000 per TEU on average through the Free Trade Zones in
Korea in addition to land distribution costs within Japan (approx. 15~20%).
Cost savings and timely delivery of
mid- and short-term cargo
Total transit time
4~6 Days
Japan’s land transportation cost savings model
2~3 Days 2~3 Days
China-ICN ICN-the US & Europe
through a developped feeder network in Korean ports

Ex-Factory Ocean Breakbulk Air Activities at Gamchon Distripark

Storage, Processing, Consolidation, etc. FCL
Company E in Tianjin FCL FCL
(a multinational logistics company) FCL
Europe NE Asia
Investment amount: Undecided Italy, France
China, Taiwan
Ports concerned: Inchon Port Logistics Complex
Major business: Sea & Air Service FCL
- Cost reduction through a feeder line between Korea and China SE Asia the US, Canada,
- Timely delivery through an air carrier between Central Thailand, Indonesia Japan Mitsui Products
American and the US Malaysia, Vietnam
Competitive & Reliable Service - Invested in Gamcheon port FTZ(100 billion KRW)
- Operated from December 2005

116 Competitive Business Models 117

III. Business Opportunities in Korea

 odel utilizing the Generalized System

M This model, presented as a solution to this problem, is intended to find the product segment whose
basic tariff and special tariff from Japan’s Generalized System of Preferences is almost identical,

of Preferences(GSP) in Japan and to provide value-added logistics service.

This business model is designed to reduce some of the barriers of the Generalized System
of Preferences (GSP) in Japan. ▒ Applicable Model for export to japan

Tarrif Rate
Business status HS code
Tarrif Rate
 here is a six to eight percent difference
T Classification
(2 units) General Tariff Preference
The Generalized System of Preferences is a program designed to promote profits from export and between general preference tariff rate and Tariff
industrial development in developing countries by applying a tax rate lower than the general tariff to general tariff rate Furniture 34 Free Free
specific import items from developing countries (implemented since August 1971). Construction Materials 69 2.2% Free
The number of countries subject to the Generalized System of Preferences in Japan is 155 in total, Tools 44 2.6% Free
BM applicable items
concentrated mostly in Africa and South America. The product items subject to basic tariffs Metal Products 38 3% Free
However, if items imported from those countries that enjoy the benefit of the program, such as China in Japan and special tariffs from Japan’s Motor 84 8% 5.28%
and southeast Asian countries, go through intermediary processing such as consoling, labeling and Generalized System of Preferences include
Wood Products 44 2.6% Free
packaging in the Port Free Trade Zone of Korea before being delivered to Japan, they no longer furniture, construction materials, tools, metal
products, motors, wood products, fertilizers, Fertilizers 31 Free Free
get the benefit of the Generalized System of Preferences (5~10% of tax break), which means the
fiber, and electronic appliances, etc. and are Non-Ferrous 78~81 Free Free
intermediary trade via the Port Free Trade Zone of Korea offsets the distribution cost reduction able to obtain the same tariffs stipulated in 52 Free~11.2% Free~3.36%
effect. the Generalized System of Preferences if value 53 Free~12.8% Free~2%
added logistics services (console, labeling, 54 4.8%~10% 0.8%~6.5%
processing, packaging and etc.) are provided in 55 Free~10% Free~7.04%
the surrounding area distribution complex for Electronic Appliances 85 Free Free
Definition of GSP Applicable Nations ports in Korea. Source:
• It is a program that applies a tariff rate lower than  total of 155 countries are beneficiaries of
that of general tariff on specific items imported Preference Tariff Program. Most of those courtiers
from developing countries or regions in an attempt are located in Africa and South America.
to help them achieve enhanced export profits
and promote economic development as well as
• J apan’s Preference Tariff policy has remained
effective since August 1971

Central Asia Azerbaijan, Afghanistan, Ahru meniah, Tadzhikistan, Turkmenistan etc.

Algeria, Guyana, Ghana, Gabowerude, Cameroon, GAMBIA , Guinea, Guinea-Bissau, Republic of the
Congo, Zambia, Djibouti, Gibraltar, Zimbabwe, Sudan, Equatorial Guinea, Senegal etc.

Latin America Argentina, Antigua and Barbuda, Uruguay, Solomon, Dominican Republic, Trinidad and Tobago etc.

Eastern Europe Albania, Mordova, Montenegro, Bosnia and Herzegovina etc.

Middle East Yemen, Iraq, Iran, Lebanon etc.

South-East Asia Indonesia, Thailand, Sri Lanka, Papua New Guinea, Vietnam, Philippines, Myanmar, Laos etc.

Oceania British Anguilla, British Virgin Islands, Samoa etc.

Central America Guatemala, Honduras, Mexico etc.

118 Competitive Business Models 119

III. Business Opportunities in Korea

Investment attraction model for market • If the unit production cost in Japan is assumed to be 100, the unit production cost in Korea is
80~85 and this difference is expected to grow as the local procurement of parts and intermediate

acquisition Utilization of Korea-US FTA products within Korea increases and the amount of production expands.
• However, due to the gap in technology levels, some core parts and intermediate products will need
to be procured from Japan although investment into the Korean market is expected to expand
This business model is for foreign companies planning to expand their business in the technology transfer.
Northeast Asian Market utilizing the Korea-US FTA.
With the business type and cost structure of company S taken into account, the market expansion
type investment attraction model is highly applicable, along with cost reductions and creation of
Business status additional profits.
The Japan-based LCD manufacturer S used to manufacture LCDs in Japan and deliver them to Considering the effect of the Korea-US FTA alone, the production of Korean LCD manufacturers is
Korean companies in the initial stage. However, it established a manufacturing branch in Korea in expected to increase by as much as 5% or more, which necessitates the expansion of production
accordance with a request from these companies as the production of LCDs in Korea significantly capacity by 50%. In this case, planned manufacturing branches in Taiwan and China may be
increased. The company has a manufacturing & sales branch in Incheon with 90% of its production established in Korea’s Free Economic Zone instead.
sold in the Korean market and the remaining 10% sold in Taiwanese and Chinese markets. The
headquarters in Japan manufactures products for the Japanese market as well as parts and New business model
intermediate products required by the Korean branch.
Manufacturing and sales
branch in Korea 60~70% of products are sold to Korean
companies, including Samsung and LG
Manufacturing branch -  Expanded production capacity (1.5 times
Current business model in China (planned) or more), decrease in unit production
cost (85%->75%), cost savings through
economies of scale The Korean market is expected to
-  Establishment of a production bases
Manufacturing and sales expand by 5% due to the Korea-US FTA
targeting the Chinese market (investment
branch in Korean to be determined depending on the
circumstances of the Chinese market) Domestic Consumption
-  Unit production costs are 80%~85% of
Manufacturing branch 90% of products are sold to Korean Japanese Headquarters
those in Japan companies, including Samsung and LG
in China (planned) Domestic Consumption
-  Market segmentation: Export to the Chinese -  Core parts, intermediate products, mass
Domestic consumption 90%, Export 10% market production of complete products
-  Establishment of a global production base Providing complete
(future investment to be expanded) products and core parts -  Production Cost =100
Domestic Consumption Japanese Headquarters
Domestic 80%~90% of complete products
Consumption Export to the European market are sold to domestic (Japanese)
re-exports -  Core parts, intermediate products, mass companies
production of complete products
exports re-exports
Providing complete -  Production Cost =100 Non-tariff exports
products and core parts Export to the US market

80%~90% of complete products are Non-tariff exports

sold to Japanese companies
 Establishment of a
Manufacturing branch in re-exports
Taiwan (planned)
-  Establishment of a global production base
(future investment to be expanded) exports Effects
• Cost perspective: It is anticipated that the current unit production cost, which is 85% of that of
Japan has decreased to 75% due to economies of scale triggered by expansion of production
Feasibility within Korea.

A Japanese company S that established a manufacturing and sales branch in Korea’s Free Economic • Profit perspective: It was found that the current profit level of 20% can increase to 29.4%
Zone obtained positive effects in delivery limits, after sales services, etc. In addition, as demand in through cost saving activities.
China and Taiwan increases, the company is scheduled to establish another manufacturing branch • Sales perspective: Sales currently dominated by Korea (90%) are expected to expand to the US,
in China and Taiwan in response to the potential growth of the Chinese market in the future. China, and Europe through expansion of production bases due mainly to the Korea-US FTA policy,
resulting in an increase of profits.

120 Competitive Business Models 121

III. Business Opportunities in Korea

Brand awareness promotion model Current business model

This business model utilizes both the global brand value of Korea and ratification of the Korean contractors
Korea-US FTA. -  Provision of 15~20% of core
parts and intermediate products
Chinese HQ Foreign contractors
-  Planning, design, R&D, semi- -  Provision of 15~20% of core
Business status automatic manufacturing process Providing intermediate products
parts and intermediate products

• Electronic company S manufactures industrial fans (tariff rate: Korea=8%, US=4.7%) in Qingdao, Low price,
Low quality,
China and considers the US its most sought-after market. Industrial fans are commodity products Delivery limit.
that do not require high-end technology and S electronics is in charge of developing its own Order
Chinese contractors
independent technology. Buyers in the US
-  60%~70% of raw materials and Complete products
(delivery of industrial fans)
• The company procures intermediate products and core parts (motors, propellers, etc.) mostly intermediate products -  90% of sales production

from Korean and foreign contractors while procuring miscellaneous parts and raw materials from Import Tariff : 4.7%
contractors within China. Other buyers

• The high procurement rate of intermediate products and parts as well as additional logistics costs -  10% of sales production

and delivery limits requires a large amount of inventory and subsequently gives rise to monetary
problems as well.
• Company S assembles parts and raw materials outsourced from external sources in a semi-
automatic manufacturing process and labor costs take up about 10% of unit production cost. Effect
Company S is expected to improve the profit structure as it overcomes the gap in labor costs
between Korea and China if it establishes a production system that interconnects Korea and China
by building a factory in Korea’s Free Trade Zone.
• The real wage of Chinese workers increased by at least 30% due to the enforcement of a New
Labor Act in 2008.
Cost perspective
• Meanwhile, US buyers lowered unit production costs of Chinese products as opposed to Korean • Production in Korea will cause an increase in labor costs, but such costs will be mostly offset by
or Mexican counterparts only because they are Chinese products, imposing a burden in terms of the automation rate for manufacturing in Korea, modularization of parts procured from the Chinese
profit structure. branch and enhanced labor productivity.
• The portion of profit out of unit production cost was only 5~10% but is now 2~7%, and has • In addition, a decrease in costs of parts and raw materials and expansion of outsourcing within
become lower after the enforcement of the New Labor Act. Korea is expected to further reduce production costs and eliminate the uncertainty of supply time
• Additionally, there are restraints in the import of intermediate products and raw materials, and in frames.
particular a ban on introducing cheap second-hand equipment from Korea creates additional cost
• A dditional costs will be eliminated and securing capital will be easier by escaping the
increase factors.
administrative and miscellaneous costs imposed when manufacturing in China for export as well
• The new Chinese VAT sets the tax refund rate to 8% as opposed to the previous 13% with 17% of as the non-refunded part of the Chinese VAT
• Therefore, companies engage in indirect procurement from Hong Kong or other countries to avoid Profit perspective
Chinese VAT imposed on intermediate products and parts. Since the major target market of Company S is the US, it can expect to increase profit in exports by
as much as the tariff rate (4.7%) due to the Korea-US FTA, and enhance its profit structure by relief
These problems have made Company S consider moving back to Korea’s Free Economic Zone or in the China discount and the effect of the Korea premium.
Free Trade Zone, a movement which is expected to accelerate due to recent appreciation of the
Chinese Yuan against the Korean Won.

122 Competitive Business Models 123

III. Business Opportunities in Korea

Biz model for differentiation of brand

and place of origin
This business model is designed to promote profits from the increase in the value of the
Korean brand and expected ratification of the Korea-US and Korea-EU FTAs.

Business status
Company S is a mid-sized company that manufactures luxury leather handbags and purses for
females based on high quality and advanced technologies and that delivers its products to multiple
New business model ordering parties (luxury brands).

• The company has a business division and R&D function in Korea while manufacturing all products in
Korean contractors China.
-  Provision of 30~40% of core • Major production items include luxury leather handbags and purses for women, mostly high value-added
Chinese branch
parts and intermediate products products with tariff rates of 8~10% for Korea and 8~10% for the US & Europe.
Foreign contractors
-  Semi-automatic manufacturing Providing -  Provision of 15~20% of core
process for intermediate products intermediate products parts and intermediate products
Product development is made in Korea while manufacturing is based on ODM through collaboration
with ordering parties as well as approved technology and quality.
Chinese contractors

-  40~55% of raw materials and • The core parts and raw materials are procured from Korean contractors (procurement rate of 60~70%)
intermediate products Order
Korean HQ (Gwangyang) while general parts and miscellaneous raw materials are procured from Chinese contractors (procurement
-  Planning, design,
rate of 30~40%).
R&D, semi-automatic Buyers in the US
Import Tariff: 0% • This spikes up the distribution cost, which significantly reduces export competitiveness all the more due
manufacturing process
from the Korea-US FTA -  90% of sales production to the recent appreciation of the Chinese Yuan.
Other buyers Complete products
(delivery of industrial fans)
-  10% of sales production
Timely procurement is extremely important as the company is required to obtain parts and materials
within 50 days after subcontractors place an order due to the predetermined product manufacturing
schedule. The Chinese branch manufactures complete products by manually processing procured
parts and intermediate products.

• The portion of labor costs out of the unit production cost is currently at the level of 20~25% but a 20%
increase in wages has been made, compared to 2007, since the enforcement of the New Labor Act in
2008. This has put a heavy burden on profit structures, all the more because of the recent appreciation
of the Chinese Yuan.

Profitability is not favorable as ordering parties (luxury brands) set the delivery price to 20~30%
of the consumer price along with 10~30% of the ‘China Discount’, further aggravating export

• Additionally, the company used to pay 15~17% in Chinese VAT and got a refund of 11~13% but this
refund rate has been dramatically reduced since 2008.

124 Competitive Business Models 125

III. Business Opportunities in Korea

Current business model • In addition, the current tariff of major manufacturing items from Company S, including luxury
leather handbags and purses, is 8~10%, but extra profit can be realized through the elimination
of tariffs due to the Korea-US and Korea-EU FTAs respectively.
Korean HQ (Uiwang) Korean contractors

-  Manufacture of R&D test products -  Manufacture of intermediate

Chinese branch
products (leather, synthesized
fiber, original fabric, ornaments
Sales perspective
-  Manufacture of complete products etc.) (60~70%) Company S needs to develop its own brand as it retains capabilities in design and quality as the
through manual assembly Providing intermediate products(60~70%)
(Procurement: within 60 days, distribution basis for competitiveness of items on the same line.
within one week)
Order, design, ODM
HQ of luxury manufacturers
• In particular, the internal brand can contribute to enhanced profitability as the delivery price of its
Chinese contractors own internal brand is 50~60% of the consumer price.
-  Investigation on trends, markets,
-  Manufacture of intermediate products consumer preferences
(synthesized fiber, original fabric, simple parts) (5 seasons)
• However, as it requires a huge amount of investment and risks to develop a new luxury brand,
Tariff 8~10%
Providing 30~40% of parts & raw materials
(paid by sales division)
government subsidies as well as phased planning will be required.
North American sales division
Delivery of complete products
(within 90 days after ordering) -  70% of sales production

Other sales division

New business model
-  30% of sales production in
Europe, Asia and other regions
Chinese branch Korean HQ (Uiwang) Korean contractors

-  Modularization with outsourced -  Market survey, Establish ment -  Manufacture of intermediate

parts and raw materials, Production of development planning , products (leather, synthesized
of intermediate products (mostly Manufacture of R&D test products fiber, original fabric, ornaments
Effect manual processing) etc.) Provide 60~70%

With the items and technologies of Company S taken into account, it is anticipated that the company  Providing intermediate Luxury HQ
will generate substantial profit as well as accomplish corporate development through a short-term products
Order, design, ODM
strategy of differentiating place of origin and a mid- and long-term strategies of developing an Chinese contractors -  Investigation on trends, markets,
 Providing intermediate consumer preferences
independent brand. -  Provision of 20~30% of low value products (module) (5 seasons)
added parts and raw materials
Korean HQ (Gwangyang) North America sales division
Profit perspective -  Partial transfer of core functions
-  70% of sales production
such as R&D. Luxury handbags,
• The company develops its own design and provides a number of luxury brands with its products Luxury brands, High-end handbags.
so it is expected to improve profitability by targeting the high-end market with differentiated Assembling & processing for European branch
Other sales division complete products
products including place of origin through consultation with ordering parties. Tariff : 0% -  Brand sales
-  30% of sales production in
Europe, Asia and other regions with Korea-US, Korea-EU FTA
• In particular, this strategy can secure a high delivery price if it deploys manufacturing of high-end
products with materials procured from Korea.
• The current delivery price is only 20~30% of the consumer price while the delivery price of luxury
brands with materials procured from Europe, Korea and Japan is 30~40% of the consumer price.

Cost perspective
• Since there is a large amount of procurement of parts and raw materials from Korean contractors,
it can shorten delivery times and reduce distribution costs if the products are manufactured in
• If the company engages in manufacturing products within Korea’s Free Economic Zones, the labor
costs may go up but this will be offset by modularization of intermediate products procured from
Chinese branches, automation of Korean factories, and improved labor productivity.

126 Competitive Business Models 127

III. Business Opportunities in Korea

Success Stories
A. Sea port based
CASE 1. This business model is intended to target the Northeast Asian market with liquid cargo, including

Distribution cost reductions through

high-end cleaners, oils, and wines manufactured in Europe and the US while achieving cost
reduction, promotion of services, and product sophistication.

packaging in large quantities

Case Study: France-based company B transports products (including hair removal products for women and
The model is designed to reduce distribution costs by transporting high-end special
high-end cleaners) in large quantities that require supply on the same day to the Busan Port Free Trade Zones,
cleaners, perfumes, and wines etc. manufactured in Europe in large quantities to Korea’s
and then repackages them in small quantities before exporting them to Japan and Korea. The company enjoys
Port Free Trade Zones and conducting mixed loading, consoling, sophisticated packaging, tax breaks of as much as USD 200~300 per TEU.
and labeling before delivering them to consumers.

This business model is designed to create value added through customized sales strategies via
packaging that conforms to customer requirements, as well as sophisticated and prompt services Distribution cost reduction effects : USD 200~300/TEU
that reduce distribution costs by 10~20% through transport in bulk packaging (drums, oak barrels, The business model where specific cleaners or daily supplies
etc.), Items include high-end cleaners, perfumes, and wines etc. currently manufactured in several manufactured in European countries including Germany and
European countries (including Germany, France and Italy) transported to Korea’s Port Free Trade France are repackaged in Busan before being delivered to
Zones. In particular, companies exporting to Japan are able to reduce transportation time through multiple destinations in Japan
the utilization of a well developed feeder network in the Busan port. A number of companies are
considering using this model in the liquor market as well.

128 Success Stories 129

III. Business Opportunities in Korea

Model utilizing Korea’s assembly Model involving reassembly of Japanese
technology second-hand cars
This business model is intended to utilize advanced technology regarding machinery This business model aims to create added value through proper product management and
parts, geopolitical location and relatively cheap labor cost customization, including changing the position of the steering wheel for regions with high
demand for second-hand cars like the Middle East, South America and Russia.
This business model brings high-priced office chairs and equipment manufactured in the US and
Europe into the distribution center in Korea’s Port Free Trade Zones where they are finished before The global automobile market faced an unprecedented crisis during the global recession in 2008
being exported to the Northeast Asian market. In particular, with the increase in demand for high- giving the global secondhand car market significant opportunity to grow. In particular, due to a
end office equipment in Korea and Japan coupled with economic growth in China, markets are set ban on driving right-hand drive cars in Russia, the demand for Korean secondhand cars as well as
to grow rapidly, along with high value-added distribution services that utilize superior assembly Japanese cars is expected to rise. Currently, secondhand cars exported to the Middle East utilize
materials in Korea. containers with a variety of service routes rather than the Roll-on/Roll-off routes dedicated to
automobiles in specific ports only, due to restraints in production year and a reduction in supply.
This business model features transportation in small units and high-capacity loading from the
investment corporation’s perspective, along with reduction in distribution and labor costs. Defect Despite the uncertainty of market demand, there is a high chance of success considering the
rates are low as products are assembled in the vicinity of consumer locations. sustained economic growth of BRICs and of the third world countries. With the enhanced brand
image of Korean cars, companies involved in this business are enjoying increased prices for
secondhand cars from Korea and demand for exports of Japanese cars via Korea due to relatively
Case Study: US-based company T has an assembly factory in Korea where materials from France and low remodeling costs compared to Japan. The global secondhand car market is expected to
Korea are assembled to target the Northeast Asian market. The company can reduce distribution costs by sustain expansion from 900,000 cars currently to up to two million cars due to green growth and
15~30% on average and is scheduled to expand production capacity in the near future. environment-friendly policies being adopted worldwide.

The demand for secondhand cars is expected to soar due to changing global economic
circumstances making it possible to accomplish environmental renovation and a variety of
distribution businesses.
Utilization of Korea’s assembly technology
• Import of parts for high-end chairs to assemble and sell in
Korea, China and Japan Case Study: Japan-based secondhand automobile exporter B, which is currently stationed in the
• Reduction of production costs by 30% and distribution costs Gwangyang Prot Free Trade Zone exported 4,000 secondhand cars in Japan and is now preparing to
by 15%
begin export in the Port of Gwangyang.

Sheets from US

Korean Shaft

French frames

130 Success Stories 131

III. Business Opportunities in Korea

The renovation model for secondhand cars is intended to create value added by increasing the value equipment from Japan while localizing some parts to encroach on the Japanese market.
of secondhand cars through the commodification process as described below. Chinese manufactures complete products by importing parts and modules from Korea and Taiwan
Secondhand cars within Korea typically go through various renovation processes including initial while securing technology in down streaming markets such as LCD TVs.
inspection, maintenance, sheet metal processing, painting, cleaning and final inspection to overcome
inconsistency in quality and to create value added. This model, which leverages specialization in East Asia enables procurement and sales within Korea
Renovated cars go through a “vanning process” as a final maintenance stage before being placed in as well as overseas procurement, sales and distribution services by introducing a distribution center
a container for export (up to six cars) along with parts or modules for after sales service. for storage, distribution, processing and management of LCD products in Korea’s Port Free Trade

The LCD clustering distribution business model aims to create additional value from
a distribution perspective by transporting a variety of high value-added products and
is expected to produce a large quantity of goods transported with frequent transfer of

LCD clustering model

This business model utilizes the LCD cluster that
interconnects assembly factories in China and
Taiwan as well as sophisticated LCD technologies
from Korea and Japan.

The production base of the global display industry is

concentrated in Northeast Asia; Korea, Japan, Taiwan
and China are the major manufacturing countries. The
tripartite competition system among Korea, Japan and
Taiwan remained established until the mid 2000s with
a reinforced international specialization system. The
establishment of global production networks in the display industry is expected to accelerate with
the expansion of local production by large conglomerates.

The display industry including LCDs favored rapid transportation via air carriers due to high prices
and the need for timely delivery. However, due to plunging prices and expansion of the consumer
market along with severe competition, this industry is shifting back to conventional transportation. In
particular, marine transportation is gaining popularity as the product breakage rate is lower than in
air transportation.

When examining the structure of the industry in East Asia, Japan generally oversees the entire
process of manufacturing, while Korea and Taiwan usually manufacture modular products with parts
imported from Japan.
Japan dominates the market with market leading technology in parts and manufacturing equipment,
and manufactures polarizing plates, glass boards, and color filters etc. through joint research among
the relevant parts and materials contractors.
Korea and Taiwan manufacture modular intermediate products by importing parts, materials and

132 Success Stories 133

III. Business Opportunities in Korea

B. Airport based CASE 5.

Sufficient demand in the surrounding area is required along with well-established airlines ASML
and the shortest possible lead time from frequent transportation services to be qualified
ASML, a Dutch firm that is the world’s largest semiconductor exposure equipment manufacturer
as an international distribution base
selected Incheon International Airport Free Trade Zone in 2008 as its international logistics
The Incheon International Airport is a strategic location as it is located close to Korea's center to warehouse products to be distributed worldwide. ASML is also the world’s third largest
major metropolitan area and retains Asia’s largest airline network, which enables semiconductor equipment manufacturer in general, with the world’s largest revenue in exposure
reduction in transportation time. In addition, the airport has made numerous efforts to be equipment. It formerly had a number of warehouses for parts scattered around Asia but integrated
a qualified international distribution center, including minimization of time required for them into a centralized warehouse to cover the Asia Pacific region, and is now scheduled to expand
customs clearance by streamlining procedures, and introduction of government policies its functions on a global basis to create a global hub warehouse from which parts and equipments
can be exported worldwide.
and tax conditions favorable to businesses. As a result, the Incheon International Airport
has emerged as the world’s second largest Asian air hub base with 700 companies
The government has changed its policy from requiring permission for export of strategic materials,
conducting business within the Incheon International Airport Free Trade Zone. which used to take up to ten days, post facto reporting after exporting the bulk of strategic
materials. This move is to attract more investment in warehousing from multinational companies.
Recently, the Incheon International Airport Corporation has taken supplementary measures The “Comprehensive Export Permission Policy”, which used to apply only to Korean corporations,
to attract foreign investment, including establishment of physical infrastructure as well as has extended to the distribution centers of foreign companies which do not have a domestic
simplification of cargo classification, repackaging, and overseas transference procedures, branch. Thanks to this policy, ASML Korea and the headquarters of ASML agreed on “commissioned
management of export of strategic materials”, enabling ASML Korea to fully control the export
allowance of post-facto reports when exporting strategic materials to foreign companies,
of strategic materials. In addition, the Korea Customs Service and the customs service at the
and settlement of corporate taxes for simpler storage, transfer, and repackaging by
Incheon International Airport allowed the declaration of cargo to be divided and merged by multiple
foreign companies. In addition, the IIAC has engaged in PR activities to ensure that distributors. This enables each cargo item to be self-managed on an individual basis. If the same
the competitiveness of the Incheon International Airport is better known to companies item is taken out for re-export, companies can reduce the lead time from four hours down to 30
stationed in the Free Trade Zones, the Korea Trade-Investment Promotion Agency (KOTRA), minutes by applying a general export procedure instead of using existing return procedures and
and the Korea International Trade Association (KITA). As a result, a number of foreign and using electronic export customs procedures, without resorting to complex paperwork.
domestic companies including Schenker Korea, Kuehne & Nagel Inc, Samsung Electronics
Giheung Factory, ASML, and SONY are utilizing the Incheon International Airport as a
distribution center.

134 Success Stories 135

III. Business Opportunities in Korea

Since ASML, a global logistics company, is using the Incheon International Airport Free Trade Zone CASE 7.
as its global distribution hub, domestic airlines and logistics companies expect a significant rise in
sales due to an increase in air freight, along with a decrease in delivery lead time for semiconductor
equipment parts, which is expected to fall from 30 hours or more to less than three hours. In
AACT (Atlas Air Cargo Terminal)
addition to ASML, around ten global semiconductor equipment companies are reviewing decisions The AACT freight terminal, the Asian hub
to transfer Asian and global hubs to the Incheon International Airport Free Trade Zone. of Polar Air Cargo Inc., the air freight
company run by Atlas Air Worldwide
Holdings, Inc. (AAWH) that retains the
B747, the world’s largest air freighter,
moved to the Incheon International
Airport in May 2008 and has been
operating successfully ever since.

SONY The AACT will be used as a hub terminal for Polar Air Cargo for the Asia – US route. This plays
an important role as a distribution hub that covers all of Asia including China and India with a
significant increase in demand for air freight. Polar Air Cargo, an air carrier with the single largest
Sony established and operated a global distribution center in amount of cargo among foreign air carriers at Incheon, reinforced its strategic investment in
the Incheon International Airport Free Trade Zone in August Incheon by leveraging the strategic location of Incheon International Airport for the Russian Far East,
2008 through Sony Supply Chain Solutions (Korea) Co., Ltd. Northeastern China, and Northeast Asia. It handled cargo weighing nine tons through 29 air freight
Sony Inc. has operated a distribution center in Hongkong for operations a week in 2007. Atlas Air Cargo Terminal (AACT) is expected to have its volume of goods
products manufactured in Shanghai and Yantai in China. It transported increase by 5.9% annually, as it uses Incheon International Airport as a transit hub that
decided to move the distribution center for laptop computers connects China, India, America and Europe.
for the US market from Hong Kong to Incheon International
Airport, which will handle 14,000 units, and is scheduled Atlas Air Cargo Terminal (AACT) entered with an investment of KRW 17.3 billion. It occupies a
to send 420,000 laptop computers weighing about 6,000 tons to the US market annually. If it total floor area of approximately 16,000 m², located close to the Incheon hub of DHL, to create
is successful, Sony plans to move the entire distribution center from Hong Kong to the Incheon synergy effects for both companies and dramatically increase Incheon's status. In addition, Incheon
International Airport Free Trade Zone. International Airport is expected to increase to 150,000 tons of transit cargo over the next 25 years
with the commencement of the AACT, and is also expected to gain KRW 370 billion of profits from
The utilization of the current complex transportation and distribution system has been presented oil use and surface work charges while creating 240 new jobs annually.
to Sony as a significant strategy in determining the transfer of Sony’s distribution hub. Sony has
adopted a distribution system that utilizes marine and air transportation and a distribution system
where product items are transferred to the Incheon seaport using car ferries between China and
Korea, and are then distributed worldwide through air carriers at the Incheon International Airport.
Sony’s decision is regarded as symbolic of the geographic advantages of Incheon International
Airport, which has strong growth potential as a central hub for distribution to the Yellow Sea region.

136 Success Stories 137

III. Business Opportunities in Korea

C. FEZ, FTZ port based
In an attempt to prepare for surging demand for logistics in
the Northeast Asian region, DHL, the world’s largest delivery
and transportation company, established a continental hub
Global Stronghold business model that
terminal with a land size of 20,000m² within the freight utilizes high-end technology
terminal of the Incheon International Airport in 2007 and has
operated it ever since. The DHL hub terminal was established Current status
with a total investment of USD 50 million and is five times Company K established by a joint investment between Korea and a US firm manufactures precision
larger than existing DHL distribution facilities. It plays a role chemical products (dyes, IT equipment, processors, etc.) and provides them for the Asian market,
as a stronghold of intercontinental distribution lines that connect America, Europe, and Northeast including Korea and China. It procures complete products as well as core raw materials from the
Asia with major demand for logistics from Northeast China and Far Eastern Russia. US, manufactures products for sale, and provides them to the Korean and Asian markets through
distribution branches. Due to limited production at Korea’s production branch and significant cost,
DHL is seeking enhanced productivity and customer services through the establishment of an the unit production cost is 90~95% of that of its US headquarters. The necessity of localization and
Express Incheon hub equipped with state-of-the-art systems. For this, it has prepared a fully consideration of the Chinese market has made the company enter the Korean market for expansion
automatic distribution system to process all cargo with a variety of cutting-edge equipment and tools of production facilities but has suspended implementation on concerns of technology leaks.
including weight gauge equipment and X-ray equipment with a new gateway capable of processing
13,500 cargo loads an hour, a dramatic improvement from the traditional 2,500 cargo loads an
hour. In addition, the company has set up sophisticated systems, including a six-plane camera
tunnel system with the ability to recognize air freight invoices, to measure weight and dimensions Korean R&D Center Korean distribution Korean manufacturing
automatically, and to deliver corresponding information to the server so that cargo items can be (Suwon) center (Pyeongtaek) corporation (Hwaseong, Naju)
precisely classified. DHL’s investment demonstrates Incheon International Airport’s world class -  R&D for products -  Processing of domestic and -  Unit production cost is 90~95% of that of US
foreign cargoes -  Leadership of the Korean and Asian markets
infrastructure and its advantages as a strategic hub in the Asia Pacific region.

Domestic Consumption
90% of products sold in the Korean
Chinese market market

Providing complete products and

core parts

Partial transfer of US HQ
-  Mass production of core parts and
(10% of overall production)
complete products
-  Unit production cost =100
-  Sales in US market : 90%
East Asian market
Asian market

New business model

The same company has established a global stronghold that utilizes high-end technology within
Korea’s Free Economic Zones and is expected to obtain a variety of effects. If the Korean market is
expanded due to the Korea-US FTA and entry into the European market becomes easier due to the

138 139
III. Business Opportunities in Korea

Korea-EU FTA, expansion of production facilities may be required. In particular, the ratification of the CASE 10.
Korea-US FTA is expected to settle intellectual property protection issues that have stood in the way
of investment. "Open Innovation" type Korea-US joint
The company has expressed a willingness to expand technology transfer in the future and to shift investment business model
production from its US headquarters to the Korean branch to reduce unit production costs by about
10.5~11.1% by doubling the production facility as well as obtaining additional cost savings through Current status
enhanced productivity. Company D stationed in Korea’s Free Economic Zone manufactures customized semiconductor
products used in IT, and electronic products etc. by obtaining technical licenses from a US company
that retains the original technology and provides them for the global market including Korea.

Korean R&D Center Korean distribution Korean manufacturing

(Suwon) center (Pyeongtaek) corporation (Hwaseong, Naju)
Company D has a number of competitors in Taiwan and China, and obtains royalties from Taiwanese
- Doubled production capacities
and Chinese companies after providing original technology.
- R&D for products - Processing of domestic and
foreign cargoes - Hub functionning for some items Developments in global IT technology now require massive product development costs to meet
- Unit production cost = 80~85
- Economies of scale increasingly rigorous customer requirements. There is high profit from mass production through
expanded investment and production facilities but it is difficult to procure costs and the uncertainty
Chinese market
60~70% of products are sold in the of investment is significant. The US company that retains the original technology takes an extremely
Domestic Consumption Korean market
serious approach towards joint investment with the Korean corporation due to intellectual property
0% Tariff
Providing some core parts
protection issues.
Korea-EU FTA
Significant increase of US HQ Taking the speed of technical development and heavy competition in the semiconductor industry into
technology transfer
-  Mass production of core parts and
account, Company D retains processing technology for commercialization, while the US company
(30~40% of overall production) Non-tariff exports
complete products that retains the original technology has seriously considered setting up a joint R&D corporation.
European -  Unit production cost = 100
-  Sales in US market : 90% However, if the intellectual property protection issues are resolved through ratification of the Korea-
Southeast 0% Tariff US FTA, both companies are expected to secure competitive advances in the global market.
East Asian market Korea-US FTA US market
Asian market

Korean Companies
(Global Suppliers)

-Advanced technology for processing A small portion of production for

- Mass production capacities domestic consumption

A large portion of production mostly

Chinese market
towards the global market
Providing original technology under
strong intellectual property protection law

European market US HQ

- Holding technical licenses

A mutual need for collaboration with
heavy competition in the global market
US market
Asian market

140 Success Stories 141

III. Business Opportunities in Korea

This firm is expected to enjoy various benefits with respect to import/export activities as it is able
to access a variety of government incentives and superior infrastructure as they are stationed in
Korea’s Free Economic Zones.

New business model

As the protection of intellectual property rights is reinforced and protection of investment is ensured
in accordance with the Korea-US FTA, companies from both countries will be able to collaborate
based on mutual trust and create substantial synergy effects by combining original technology and
processing and manufacturing technologies in developing new products.
In addition, both companies will be able to maximize their profits by expanding market share within
the framework of mutual collaboration and subsequently exploit opportunities to develop their own
internal technologies to meet global standards.

Korean Companies
(Global Suppliers)
Ensured Intellectual property rights through
-Advanced technology for processing Korea-US FTA
- Mass production capacities  Business trust enhancement through Korea-
US collaboration, so-called "Open Innovation"

Chinese market

Mutual sharing results Sharing sophisticated technology

Combining processing and and R&D costs
and performance
manufacturing technology
Mutual sharing results
and performance
European market Korea-US joint investment in
- Holding technical licenses
R&D sector
- Technology sharing to increase the
global market shares
US market
- Enhanced profitability focusing on new
Asian market product co-development

142 Success Stories 143

IV. Foreign Direct Investment
in Korea
Overview of FDI in Korea
Government Policy and Organization
Foreign Investment Procedures and Incentives
Living Environment in Korea
IV. Foreign Direct Investment in Korea

Overview of FDI in Korea

Considering the overall trend in FDI in 2008, the increase of investment from the EU and
Japan has offset the decrease in investment due to the outbreak of the financial crisis in the
US. In particular, investment from Japan showed an increasing tread in the fourth quarter due
to factors like the stronger Yen, and this trend has continued to the first quarter of 2009 (The
Korea adopted a more liberalized economic policy after the Asian Financial Crisis in 1998, amount of FDI notification from Japan was ranked as the largest in the first quarter of 2009).
and opened its capital and real estate markets to foreign investors. The Foreign Investment
Promotion Act, passed in 1998, enabled the government to launch more aggressive Considering major factors according to business sector, investment in the finance and insurance
campaigns to attract FDI. industry largely increased (by USD 4.6 Billion, 101% increase) due to increased investment
to expand liquidity for financial institutions in preparation for the enforcement of the Capital
After the initial success with liberalization in 1998, slowing inbound capital flows made it Market Consolidation Act (in February 2009). The manufacturing industry also showed an
apparent that a new paradigm for investment was needed. The government decided that this 11.5% increase as expectations on the potential for Korean industrial growth remained. In light
new paradigm would employ a more proactive approach to recruit foreign investors, targeting of investment patterns, the decrease in new investment was offset by a large increase in M&A
potential investors with closer reference to the strengths of Korea's industrial base, and activity (by 78.2%), increased investment (by 27.1%) and long-term loans (which grew 89.8%).
developing one-stop services to accurately address foreign investors' needs and difficulties.
Amid the current global financial crisis, the government has more strongly committed to
The government in place as of February 2008 has been preparing a more powerful and FDI promotion, perceiving it as key to Korea's economic recovery. On the other hand, new
concrete system for FDI promotion. Given the current significance of not only maintaining but business opportunity factors might be triggered by the weaker KRW currency, the active M&A
expanding foreign investment inflow into Korea, the government's preparations consist of market due to restructuring of domestic companies, and enforcement of the Capital Market
three pillars: systemic reform, overhauling regulations, and tax cuts, all three of which are Consolidation Act. In addition, FDI inducement will be promoted as strategies for developing
underway and being executed in phases. new investments and diversified recruitment overcome disadvantageous investment conditions
in the long term. For example, investment recruitment activities might focus on investors
that are less influenced by the financial crisis, including investors from the Middle East and
China, while continuously carrying out recruiting in the USA and EU. Moreover, the Korean
Trend of Inbound FDI in Korea government will provide front-line support for existing FDI companies to induce additional
investment. For the revitalization of the regional economy, the Korean government will also
Notification A total of USD 124 Billion from 1998 to 2008
try to attract more diverse investment, including investment from new growth industries and
regional development projects.
10.0 Status of Inward FDI by Industry
USD million
5.0 9,000
7,000 Services
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Unit: USD Billion, notification basis 4,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
8.9 15.5 15.2 11.3 9.1 6.5 12.8 11.6 11.2 10.5 11.7 1,000 Others
• The total FDI for the decade since the Asian Financial Crisis (1998~2008) is as 5 times as that of 1962-1997. 100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
• Inbound FDI averaged USD11 billion for ten consecutive years from 1999.

146 Overview of FDI in Korea 147

IV. Foreign Direct Investment in Korea

Unit: USD Million, % Investment from Japan in the first quarter of 2009 reached USD 661 Million, an 162%
2005 2006 2007 2008 increase year-on-year. Japan’s share (39.4%) also increased compared to the same period
Amount 3,084 4,246 2,692 3,002 in the previous year (9.3%) as investment for materials and parts showed a sharp increase in
Percentage 26.7 37.8 25.6 25.6 manufacturing. Investment from Japan - one of Korea’s primary sources of FDI - fell by 53%
Amount 8,334 6,626 7,612 8,387 in 2007, but rebounded significantly by 44% in 2008. Investment from the financial industry
Percentage 72.1 59 72.4 71.7 in Japan is expected to be highlighted as one of the most important FDI sources amid the
Amount 145 368 210 317 continuous stream of investments from the financial industry in Japan due to declining real
Percentage 1.3 3.3 2 2.7 estate prices in Korea along with a stronger yen.

FDI from the US continued on a downward trend since 2005, totaling USD 1.7 Billion in
In 2008, investment in the manufacturing sector accounted for 25.6% of overall inbound
2006, a 37% year-to-year decrease. In 2007, FDI from the US jumped by 37% to USD 2.3
FDI into Korea, while service sector investment totaled 71.9% (other business categories
Billion. The financial crisis hit the US hardest however, which influenced its outbound FDI. As
accounted for the remaining 2.7%]. Although the weights of FDI were distributed over
investment from the US showed a sharp decrease since the third quarter in 2008, FDI reached
industries with no major change from 2007, investment central to the service industry around
USD1.3 Billion in the end (the investment to the service industry decreased by 52.3 %).
the finance and insurance sectors was introduced in the second half in 2008, recording USD
8.39 Billion, an increase of 10.2% year-on-year. Although investment in the service industry
decreased in 2006, it showed an increasing trend from 2007. Status of Inward FDI by Type

USD million
Meanwhile, investment in food, non-metallic mining, and chemicals in the manufacturing 10,000

industry increased in 2008 with an investment of USD 2.54 Billion in the materials and parts 7,000 Greenfield
sector which accounted for 84.5% of the total manufacturing industry. 5,000
2,000 M&A
Status of Inward FDI by Region 1962-2008 (%)
U.S.A. 27.0 100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Japan 14.7
Netherlands 11.3
Unit: USD Million, %
Germany 5.6
M&A Greenfield
UK 5.0
Amount % Amount %
France 3.8
2005 5,268 45.6 6,297 54.4
Others 32.6 Total 67.4
2006 4,309 38.3 6,933 61.7

2007 2,483 23.6 8,031 76.4

Investment from the EU, US and Japan accounted for 77.6% of the total as of 2008, of
2008 4,426 37.8 7,280 62.2
which investment from the EU reached 54.1% with a record USD 6.36 Billion. The US stood
collectively as the largest direct investor in Korea accounting for 46.5% in 2006 and 43.9% in
2007. Other major investors in the EU include the UK, the Netherlands, Germany, and France. By type, greenfield FDI for construction of new plants and business facilities grew significantly
between 2004 and 2006, while M&A investment waned. FDI for green-field investments,

148 Overview of FDI in Korea 149

IV. Foreign Direct Investment in Korea

which had increased continuously until 2007, decreased by 9.4% in 2008.

Overview of Inbound FDI
M&A investment with a decreasing trend since 2004 recorded USD 4.43 Billion, an increase
of 78.2% year-on-year in 2009.
in Korea’s Logistics Industry
Most countries are well aware of the importance of FDI promotion in the development of
their national economy while competing with other countries across the world. FDI has been
New and Additional FDI induced for various reasons including resource exploration (natural/artificial resources), market
exploration, efficiency, and strategic resources exploration, etc.
USD million
New The Asia-Pacific Region is facing an important change in economic growth along the coastal
5,000 areas as well as international cooperation in transportation for the Asian Highway and Trans-
4,000 Asian Railway. Regional and international cooperation for trade and transportation facilities is
increasing in the European and Asian continents, which has helped diminish barriers between
countries. Such trends will generate increased demand for a logistics cluster platform that
Long-term Loans
900 covers many countries.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Korea has been making substantive efforts to secure infrastructure for logistics including
road, railway, airport and port facilities in order to increase national competitiveness. Major
Unit: % infrastructure for logistics, including airports and seaports, has been greatly expanded.
Year New Additional Long-term Loans

2005 32.5 66.7 0.8 Foreign companies are participating in SOC private
2006 38.6 57.9 3.5 investment projects driven by Korea in the form of an equity
2007 48.1 46.8 5.1 investment or long-term loan (over five years).
2008 37.8 53.4 8.8 AMEC in the UK is investing in the construction (to be
completed in October 2009) of the Incheon Bridge (at
18.5km, the sixth largest in the world) which will connect
Incheon International Airport to Incheon Songdo International City in a BTO (Build-Transfer-
Operate) system.

Systra (France) is investing in the construction of a light railway between Busan and Gimhae
in a type of equity investment and Mizuho Corporate Bank (Japan) is providing a long-term
loan to the highway project between Daegu and Busan.
DP World (Dubai) and Bouygues (France) among others are carrying out operation and
development of port terminals and logistics. They are also participating in the construction of
Busan New Port (30 docks for container terminals). Prologis (USA) and others are investing
in real estate development for logistics including general warehousing business around the
inland areas.

Incheon Airport, as the second largest international cargo airport and one of the top 10

150 Overview of FDI in Korea 151

IV. Foreign Direct Investment in Korea

international passenger airports as of and Mevius, established themselves, and are planning to
March 2009, accommodates 56 airliners develop a Western Logistics Support Complex (1.93 million
flying to and from 165 major cities across m²) by 2012.
the world. It is becoming a hub airport in
East Asia with facilities that can handle Port of Pyeongtaek located around the capital region is
4.5 million tons of cargo a year along developing 1.43 million m² for a logistics support complex by
with three large runways (two 3,750m 2010 and has planned to develop 1.2 million m² additionally by 2015.
runways and one in 4,000m runway).
In addition, Incheon Airport was awarded Port of Ulsan, characterized by a high presence of liquid cargo, is accommodating foreign
“ B e s t A i r p o r t Wo r l d w i d e ” f o r f o u r investment companies including Stolt Haven, Vopak, and Odfjell, etc. It is in the progress of
consecutive years for the first time in the executing designs to secure a port logistics support complex of 440,000 m² by 2011. Port of
history of the Airport Service Quality (ASQ) survey carried out by Airports Council International Incheon, Pohang, Masan, and Mokpo are planning to actively attract more foreign logistics
(ACI), an organization of over 1,700 airports across the world. companies while developing their port logistics support complexes as welll.

Incheon Airport has developed and is operating the First Phase of its Airport LogisPark
Inbound FDI in Korea's Logistics Industry Unit: USD million, notification basis
project along with its cargo terminal areas to maximize cargo and generate value added in
Year 2004 2005 2006 2007 2008
response to changes in the international logistics environment. Areas around Incheon Airport
accommodating foreign logistics companies include DHL, Fedex, UPS, Polar Air, Schenker, (Transportation, Warehousing)
371.7 363.5 567.6 563.8 703.8

KWE, and AMB Property. Incheon Airport also accomodates the Asia hub of ASML, the third Transportation 112.1 144.7 89.3 311.3 19.7
largest semiconductor equipment company headquartered in the Netherlands. Additionally, Warehousing 259.6 218.8 478.3 252.5 684.1
Incheon Airport is planning to develop a logistics complex (920,000 m²) in the second phase
and to provide sites beginning in 2012.
Thanks to the efforts of the Korean government, FDI records in the logistics sector have
The Busan new port next to the current port of Busan is the shown an increase since 2004. However, the weight of third party logistics (3PL) utilization
fifth largest port (13,452,000 TEU) based on the quantity of for shipping companies in Korea has remained at 42.2% in 2007 and 46.3% in 2008, much
goods transported by ports across the world in 2008. It has lower than the 70-80% in advanced countries.
completed development for the phase 1-3 Northern Container
Logistics Support Complex, where many foreign companies Accordingly, the Korean government is planning to expand third party logistics for cost savings
have established themselves, including C. Steinweg and specialization through logistics rationalization to foster logistics companies and to address
Warehousing PTE., COSTCO Logistics Co., and Sanyo Maritime, etc. the advancement of cargo transportation markets in a systematic manner. It also plans to newly
develop northern and southern inland logistics bases around the capital region to revitalize
The development project at the Northern Container Logistics Support Complex (Phase 4 collection and distribution systems. In addition, it plans to continuously expand ITF (Integrated
scheduled for 2011) is in progress (0.22 million m²), and the Southern Container Logistics Freight Terminals), ICD (Inland Container Depots), inland logistics bases and complexes while
Support Complex (1.42 million m²) and the Woongdong District Logistics Support Complex (3.58 extending logistics complexes under operations in three places to 39 places by 2012.
million m²) are planned for development as well.
The Korean government is also planning to build a national logistics general information center
Port of Gwangyang is exclusive for containers, and completed development of its Eastern by 2012 to link and integrate the logistics information network while constructing an RFID
Logistics Support Complex (1.95 million m²) in 2008. Foreign companies like TESCO Holdings, based information system for the logistics bases including airports and ports.

152 Overview of FDI in Korea 153

IV. Foreign Direct Investment in Korea

Government Policy and

implementing the foreign investment policy to secure the financial resources and technologies
necessary for the expansion and operation of the logistics infrastructure, such as SOC
facilities (roads, railroads, high-speed railroads, airports, harbors, etc.), airport/port-hinterland

Organization complexes and inland logistics depots.

Government Policy
Since the onset of the financial crisis in 1997, the Korean government has been active in its
FDI Promotion System
efforts to attract foreign direct investment to Korea and the Foreign Investment Promotion Currently, Korea's FDI promotion system is comprised of several organizations. These
Act. passed in 1998 has greatly facilitated these efforts. In 2007, on the occasion of the 10th organizations, such as local governments(including Free Economic Zone authorities), public
anniversary of Korea’s pro-FDI policy, the government has initiated a new goal of increasing corporations and industrial complexes, IK (Invest Korea) and KBCs (Korea Business Center)
high value-added investment and established an action plan to support the national effort to of KOTRA(Korea Trade-Investment Promotion Agency), are cooperating with one another
attract foreign companies and expand FDI-related infrastructure. These initiatives are aimed systematically centering around the central ministries including the Ministry of Land, Transport
at improving the efficiency and scope of the current FDI promotion system by selecting and Maritime Affairs(MLTM) and the Ministry of Knowledge Economy(MKE).
high-priority industrial sectors and creating cooperation mechanisms between relevant
government agencies. To this end, the extent of the government’s drive includes stepping The central government, local governments, public corporations and industrial complexes,
up investment incentives as well as upgrading the current one-stop service system and etc., can attract FDI unilaterally and ask for cooperation from other organizations when it is
foreign investor support system. Overall, plans are in place to organize the implementation necessary.
of an array of measures designed to create an optimal investment environment, promote a
Foreign Investment Committee
social atmosphere that is more foreign investment-friendly, enhance the living environment
for international residents and continue strives to reduce language barriers. The government Central Govemment
will be leveraging these efforts by sharpening the competitiveness of Korea’s Free Economic (MLTM, MKE etc.)

Zones and incorporating them into its vision to develop a regional financial hub in Northeast Public corporations /
Local gov. / FEZ Invest Korea
Industrial complexe corp.
Overseas KBC
KOTRA Headquarters
(Korea Business Center)
Moreover, under the business-friendly policy framework, the new Korean government elected
last year (Feb 2008) is carrying out the 3-year plan for improvement of foreign investment Targeting

environment including phased reduction of corporate tax. Especially, President Lee Myung-bak
Identifying Investors Marketing for Support service Aftercare service
has been achieving substantial results in FDI attraction through the brisk sales diplomacy at Investment attraction

the unilateral and multilateral summit talks.

As it is expected that the global economy would post a

negative growth rate after the US-driven financial crisis, Foreign Investment Committee is the supreme decision-making body in matters of foreign
investment environment becomes more challenging. investment policy, etc. Its chairperson is the Minister of Knowledge Economy and committee
In order to overcome such challenges effectively, the members are ministers of relevant ministries such as the Minister of Land, Transport and
Ministry of Land, Transport and Maritime Affairs, which Maritime Affairs and the head of local government or Mayor/provincial governor related to the
is in charge of establishing national logistics policy and case presented to the committee.
expanding logistics facilities, is taking an active role in

154 Government Policy and Organization 155

IV. Foreign Direct Investment in Korea

Foreign Investment
Foreign Investment Committee deliberates matters related to basic policy and system
regarding foreign investment; integration and adjustment of the concerned ministries'
measures regarding the improvement of foreign investment environment; criteria for tax
reduction/exemption granted to the foreign-investment companies; and cooperation and
opinion adjustment between the central administrative body and municipality/metropolitan
Procedures and Incentives
city/province or special self-governing province regarding foreign investment.
Laws Applied to FDI in Korea
The central ministries including the Ministry of Land, Transport and Maritime Affairs are Foreign Direct Investment (FDI) refers to an investment made by a foreigner for the purpose
engaged in continuous search for new projects and investment attraction activities, and of establishing a continued economic relationship with a corporation of the Republic of
settlement of the difficulties and policy improvement regarding foreign investment. Korea or a business owned by a citizen of the Republic of Korea and is based on the Foreign
Investment Promotion Act (FIPA) and other related laws. FDI, as prescribed in the FIPA,
IK (Invest Korea), the National IPA (Investment Promotion Agency) specialized in investment includes acquisition of shares or equity of a domestic corporation or business, provision of long-
attraction, was established within the KOTRA for the purpose of providing FDI-related term loans to invested domestic corporations, a contribution to a non-profit organization, etc.
consulting, guide, promotion and research services; handling investment-related civil affairs
and assisting with the filing process; providing business incubation service and other support The FIPA is the basic law for foreign investment. Unless stated otherwise in the FIPA, the
services to foreign investors and foreign-invested companies. Foreign Exchange Trade Act will apply to matters related to foreign exchange and external
dealings related to foreign investments. The Tax Exemptions and Exceptions Act and its
IK is also engaged in various activities including reporting investment projects identified by Enforcement Promotion Act and Enforcement Regulation and regulations on tax reductions on
KOTRA's KBCs, etc., to the concerned ministry; addressing difficulties of foreign investors foreign investments, etc. will apply to tax reductions for foreign investments.
on the spot in cooperation with IK's PM(Project Manager) and the concerned ministry's PM;
providing investment-related information; and arranging a meeting with investors through However, since foreign-invested companies are local corporations established under domestic
KBCs. law, the same laws that apply to purely domestic corporations will apply even if the foreign-
Moreover, the office of Foreign Investment Ombudsman is operated to support addressing invested company has gone through the processes as prescribed in the FIPA. Therefore,
the difficulties of foreign-invested companies. The Ombudsman is appointed by the President if approval and permission under each law are required, the relevant business may be
among the persons with knowledge and experience in FDI-related works. conducted only after the required processes are completed.

In connection with concerned ministry, local governments (including Free Economic Zones), Foreign Investment-Related Laws
public corporations, industrial complexes and IK are promoting foreign investment attraction
and submitting proposals to the government to address difficulties that foreign investors might • Foreign Investment Promotion Act (FIPA) ∙ Enforcement Promotion Act (EPA)s ∙ Enforcement Regulations
face. • Regulations on foreign investment and technology import (MKE: The Ministry of Knowledge Economy)
• Comprehensive announcement of foreign investment (MKE)
• Regulations on tax reduction and exemption for foreign investment (MOSF: The Ministry of Strategy and Finance)
In logistics sector, the central ministry, the Ministry of Land, Transport and Maritime Affairs • Tax Exemptions and Exceptions Act (Chapter 5. Tax Exemptions for Foreign Investments, etc.) ∙ Enforcement Ordinances
∙ Enforcement Regulations
and its subsidiary organizations including Korea Expressway Corporation, Korea Airports
Corporation, Korea Port Authority, Korea Container Terminal Authority, etc., are closely OTHER RELATED LAWS
cooperating with one another to attract foreign investment more efficiently. • Foreign Exchange Trade Act: Matters regarding foreign exchange and external trading related to foreign investments
• Law on designation and operation of Free Trade Zones
• Law on designation and operation of Free Economic Zones
• Financial Investment Services, Capital Markets Act, Capital Markets Consolidation Act etc.

For more details, please visit and refer to the link 'investment guide'.

156 Foreign Investment Procedures and Incentives 157

IV. Foreign Direct Investment in Korea

Foreign Investment Procedures Investment Fund Remittance

In principle, investment funds shall be remitted through a foreign currency bank under the very foreign
The procedures to establish a foreign investment consist of foreign investment notification,
investor's name. Funds from domestic sources are not recognized as foreign investments. In the process
remittance of the investment capital, registration of incorporation and business registration and of paying for stock subscription, the bank issues a stock deposit certificate for subscription payment
FDI company registration. The procedures applied to foreigners are basically the same as for (required for corporation establishment registration) and a foreign exchange purchase certificate (required
Koreans except for the two additional steps which are foreign investment notification and FDI for registering a foreign-invested company).
company registration. However, in the case of registration as a private business, registration of
incorporation is not required. Corporate Establishment Registration & Business Registration
Various required documents shall be taken to the district court and tax office to conclude registration of
Foreign investors or their agents can notify their investment at Invest Korea (KOTRA) or Korea incorporation and business registration.
Business Centers of KOTRA, headquarters and branches of domestic foreign exchange banks,
or domestic branches of designated foreign banks. Paid-In Capital Transfer to Corporate Account
* Notification processing period: Immediately (the issue of notification certificates
When registration of incorporation and business registration procedures are completed, the new company
becomes a legally valid corporation. Hence the bank requests the necessary documents and transfers the
Since November 1998, the principle of simplified notification has been applied to foreign paid-in capital in custody to the account of the newly established corporation.
investments. The investment notification types are divided into pre-notification prior to the
acquisition of shares, equity, etc. and post-notification following the acquisition of shares or Foreign-Invested Company Registration
the conclusion of a contract. The details are as follows: For the following cases, a foreign investor (or their agent) or a foreign-invested company must register the
foreign-invested company at the entrustment institution within 30 days of the occurrence of the causes as
Notified Items Remarks follows:
Pre-Notification • Completion of payment for the investment object (new share acquisition);
Foreign investment through acquisition of new shares, etc. or • Acquisition of existing shares (existing share acquisition);
subscription and changes in investment details
• Acquisition of shares through mergers, etc. (new acquisition of CB conversion, spin-off, etc.); and
Foreign investment through acquisition of existing shares, etc. or Exceptionally, for acquisition of a listed company’s • Completion of a contribution to an NPO (new acquisition through contribution)
changes in investment details shares, within 30 days from the date of acquisition

Foreign investment through long-term loan or changes in investment Local Corporation Establishment
Post-Notification The establishment of a local corporation exactly follows the foreign investment procedures. The following
includes the details of company establishment and business registration procedures which are significant
Acquisition of shares, etc. through mergers, etc.
• Acquisition via the issue of new shares such as reserves, revaluation in establishing a local corporation. As most companies take the form of “incorporated company,” the focus
reserves, etc. of foreign-invested companies. will be on the procedures to establish incorporated company.
• Acquisition through mergers, spin-off and comprehensive
interchange and transfer of shares, etc. Within 30 days of the date of acquisition
• Investment with profits (dividends) from acquired shares
• Acquisition through purchase ∙ inheritance ∙ testation ∙ donation Foreign Investment
Investment Fund Remittance Corporation Establishment
• Acquisition through conversion, interchange and acquisition of CBs, Notification (foreign exchange bank, carried in Registration
EBs and DRs (INVEST KOREA (KOTRA), foreign
through customs) (Court Registry)
exchange bank)
Transfer of shares, etc. Within 30 days from the date of contract

Pursuant to Article 439 of the Commercial Law:

Decrease in shares, etc. Within 30 days from the date of termination of the
creditor's notification period Corporation Establishment
Foreign-Invested Company Paid-In Capital Transfer to
Notification & Business
Registration (Initially notified Corporate Account (Foreign
Application for registration, change of registration, or cancellation of a organization) exchange bank)
Registration (Headquarters
Within 30 days from of occurrence of the case district tax office)
foreign-invested company

158 Foreign Investment Procedures and Incentives 159

IV. Foreign Direct Investment in Korea

Foreign Investment Notification and Foreign-Invested Company Registration

FDI Incentives
Acquisition of new shares
Acquisition of existing shares Share acquisition through merger, etc. The purpose of FDI incentives is to compensate foreign companies investing in Korea
(including contribution)
for their economic contributions and to assist them with costs related to establishing
New share acquisition or contribution Existing share acquisition Foreign Share acquisition notification through new business operations in the country. The government currently offers tax relief to
Foreign investment notification(pre): investment notification(pre/post): mergers, etc. (within 30 days):
Article 5 of the law Article 6 of the law Article 7 of the law
foreign companies with the potential to make major contributions to the Korean economy,
Capital goods in
Cash investment
provides them with industrial sites or assists them with site location and acquisition and
kind investment
provides cash grants and other types of financial support.
Remittance of investment funds (bank, hand-carried - Free issue of new shares
Capital goods import itemized
through customs) (capitalization of reserves,
account check application
revaluation reserve, etc.)
- Business merger · division,
comprehensive share exchange/
Capital goods import Capital payment storage/private
customs clearance business fund exchange
Settlement - Foreigner purchase/inheritance/ TAX RELIEF
- Investment of cash, stock dividends According to the Tax Exemptions and Exceptions Act, corporate and income taxes on business
- CB, EB, DR stock conversion
In kind investment Corporate establishment income, dividends income, technology introduction considerations, earned income, etc.
completion confirmation (capital increase) registration & business
application registration (*private business registration)
have been reduced. Acquisition tax, registration tax and property tax have been reduced for
properties that have been acquired or held.
Foreign-invested company registration (new application): Long-term loan investment
Article 21 of the law, article 27 of the enforcement Decree notification (pre): Article 8 of the law Corporate Tax Reduction
Initial application for loans after Reduction in corporate tax for foreign-invested companies applies to income from businesses
Post management: Transfer/reduction, amount increase registration is feasible.
Visa issue application
investment, registration/change registration, etc.
qualifying for reductions under the Tax Exemptions and Exceptions Act.
Notification of change

- Pre acquired share transfer notification (within 30 days from the transfer - Change of loan provider The initial day of reckoning tax reductions is, whichever is sooner between, the tax year in which
- Change of loan amount
contract date) : Article 23 of the law
- Change of loan conditions
the first income is created, or the tax year in which the 5th year anniversary of the date of business
- Pre acquired share reduction notification (within 30 days from the deadline of (repayment conditions, interest rates, commencement falls.
the creditor notification date) premature repayment, repayment funds
- Notification of share acquisition through mergers, etc.
- New share acquisition notification (amount increase investment)
Cause for change of registration due to Date of Business Commencement
- Existing share acquisition notification (amount increase investment) changes in details of foreign-invested • In manufacturing, the first day of manufacturing goods at each manufacturing facility
- Other investment change notification (when applicable) company • In mining, the first day of commencing collection/mining of minerals at each place of business
- Capital change (native capital increase/ • In other businesses, the first day of supplying goods and/or services
CB capitalization, etc.)
- Foreign investor merged, changing of
company names
Foreign-invested company: change of registration (application) : - Company name, address change of
Article 21 of the law, article 27 of the enforcement Decree foreign-invested companies, etc. In capital increases, the date marking the registration of capital increase shall be considered the
date of commencing business in applying this regulation. For foreign acquisition of shares through
Cause for foreign-invested company capitalization of reserves, revaluation reserve, etc. the period and rate of reduction shall be determined
registration cancellation
by cases of reductions for shares, etc. that are the basis of such occurrence. If an application for tax
- Closure (individual-closure certificate,
court-certified copy of liquidation reduction is made after increasing the capital less than 5 years after the decrease in paid-in capital,
registration, business establishment
association) the reduction shall be determined only for the foreign investment ratio of the portion that is purely
- Resolution to liquidate (resolution of
liquidation dissolution) at the general increased from before the capital decrease. However, in the case that a purely domestic company
assembly of association members)
Foreign invested company registration cancellation (application) : - Transfer of all foreign-held shares/
receives an investment from a foreigner through a capital increase and becomes a foreign-invested
Article 21 of the law, article 28 of the enforcement Decree Capital reduction of all foreign held company shall be considered as a new foreign investment and not as a case of capital increase as
- Liquidation (corporation-certified copy of described above.
liquidation registration), etc.

160 Foreign Investment Procedures and Incentives 161

IV. Foreign Direct Investment in Korea

The amount of foreign investment ratio (for tax amount subject to reduction) multiplied by the
calculated tax amount shall be deducted 100% from acquisition, registration and property taxes for
3-5 years following the commencement of business and 50% for 2 years afterwards on properties that
have been acquired following the commencement of business operations.

However, acquisition, registration and property taxes that have been already paid on properties that
have been acquired following the commencement of business operations, but prior to becoming the
subject of tax reduction, may not be refunded. However, acquisition, registration and property taxes
on properties that have been acquired prior to the starting date of business shall be subject to 100%
reduction on the tax reduction amount for properties that have been acquired following the date of the
For mergers, if a foreign-invested company merges with a domestic company (excluding foreign- tax reduction decision. Property tax shall be subject to 100% reduction of the tax reduction amount for
invested companies under the reduction period) during its reduction period, resulting in a decreased 3-5 years following the acquisition of the property and 50% of the tax reduction amount for the next 2
ratio of foreign investment in the merged corporation, the foreign investment ratio in the foreign- years.
invested company prior to the merger shall apply. According to the regulations, the local tax reduction period may be extended up to 15 years, or the
reduction or deduction rate could be increased.
For equally apportioned capitalization of revaluation reserves, that is, reserves which are not subject
to new reductions, there shall be no changes to the reduction rate for the business year of capital
increase, nor the next business year. Exemption of Customs Tariffs, etc.
According to the Tax Exemptions and Exceptions Act, customs tariffs, etc. shall be exempted for the
Tax Reduction Calculation following capital goods used directly in businesses subject to reduction in corporate tax or income tax
and are imported through foreign investment notification on acquisition of newly issued shares, etc.
Category Calculation Method
• Capital goods imported as external or internal payment vehicles invested by foreign investors to
Reduced tax = (assessed tax × tax reduction business assessment standards/total standard of
Reduced Tax
assessment) × reduction rate* foreign-invested companies
• Capital goods imported as investment objects by foreign investors
• General cases (with only the original investment)
- (foreign investor capital subject to reduction/total capital) × reduction rate of the business Exemptions of tariffs, etc. shall only apply to capital goods that have completed the import notification
year (100, 50%) under the Customs Act within 3 years after the day of the foreign investment notification. However,
• Reduction rate calculation in cases of capital increase through cash · dividends in the case that the import notification can not be completed in the said period due to unavoidable
Business Year reasons such as delays in factory establishment approval, etc. the exemption shall apply for up to 3
{(foreign-invested capital prior to capital increase × reduction rate of the business year) + (foreign additional years with the approval of the Ministry of Strategy and Finance.
* Reduction Rate capital increased × number of days from the capital increase registration day until the end of the
business year/number of days of the business year × reduction rate)}/total capital prior to capital
increase + (increased capital × number of days from the capital increase registration day until the All customs tariffs, individual excise and value-added tax shall be exempted for industry support
end of the business year/number of days of the business year)} services vital to strengthening the international competitiveness of domestic industries, businesses
Business year after capital increase that involve a high level of technology, or businesses operated by foreign-invested companies in stand-
{(foreign-invested capital prior to capital increase × fiscal year reduction rate) + (foreign investor
alone foreign investment areas under the Foreign Investment Promotion Act. Customs tariffs shall be
capital out of increase capital × reduction rate)} / total capital
exempted for foreign-invested companies in complex foreign investment areas, specific companies
in Free Trade Zones, foreign-invested companies in Free Economic Zones, businesses operated by
foreign-invested companies as a development operator of the Jeju investment promotion district or
Free Economic Zones, etc.
Local Tax Reduction (acquisition/registration/property tax)
Property acquired or held by a foreign-invested company to do business subject to reduction shall
receive either a 100% or 50% reduction in acquisition, registration and property taxes, or the items will
Tax Support for Dividends
be deducted from the standard of assessment.
Dividends received by foreign investors from foreign-invested corporations operating tax reduction
businesses are subject to tax reductions in the same rate as the portion of the amount of income of
the tax reduction business, based on the dividend income during the reduction period.

162 Foreign Investment Procedures and Incentives 163

IV. Foreign Direct Investment in Korea

The initial day of reckoning for dividends from capital increase from new investments and cash, CASH GRANT
articles, or dividends is the same as the initial day of reckoning for corporate tax. During the period of
For foreign investments that meet certain requirements, the government and the local government
100% exemption of corporate tax, the dividend income tax is 100% exempted and during the period of
shall provide cash grant for funds required to build new factories. In doing so, various aspects shall be
50% reduction for corporate tax, the dividend income tax is reduced by 50%. However, dividends that
considered regarding the foreign investment, such as whether or not they come with high technologies,
are capital from a capital increase through capitalization of revenue reserves or revaluation reserves
effects of investment's technology transfer, the number of jobs created, redundancy with internal
shall be applied with the period and rate of reduction that are applied to the original shares that are the
investments, adequacy of location, etc.
source of the dividends. That is to say, 100% for 5 years and 50% for 2 years shall not be renewed.

Shares acquired by foreign investors from Korean national shareholders of foreign-invested companies
or shares of domestic corporations shall not be subject to tax reduction since it is recognized as Eligibility
acquisition of existing shares. However, when foreigners or foreign corporations acquire shares held by To become eligible for cash grant, the foreign investment ratio shall be over 30% and
a foreigner or foreign corporation, the initial period and rate of reductions shall be maintained. meet the following requirements:

• Industrial support service businesses with foreign investments of no less than USD 10 Million,
businesses involving a high degree of technology, parts or materials manufacturing businesses, or
Other Tax Support: Tax Exemption for Technology Introduction new and/or increased investments to factory facilities to generate new employment on a large scale.
When introducing a high technology which is the key to strengthening the international competitiveness • Newly built/expanded R&D facilities in fields related to industry support services or high-tech
of domestic industries, the corporate tax and income tax on the compensations that the foreigner will businesses, or research facilities of non-profit corporations invested by foreigners (10 or more full-
receive for providing the technology shall be exempted for 5 years from the first agreed date of the time hired research personnel);
payment for compensation. This applies not only to foreign-invested companies, but also to purely • For cases when the investment amount, etc. do not meet the requirements, but has a profound
domestic companies, as well. impact on the domestic economy, the Foreign Investment Committee shall deliberate on the matter
and determine whether the case is eligible for cash grant
The Ministry of Strategy and Finance and the Foreign Investment Deliberation Council shall go - Establishing regional headquarters of multi-national companies (multi-national companies with
under deliberation and notify the range of technologies (high degree technology products and their business presence in 3 or more countries and controlling regions of 2 or more countries);
technologies) eligible for tax reduction. The standards for such technologies are as follows:
- Contributing to regional economic development as a regional strategic industry
• Technology that has a profound economic or technological impact on the national economy and is - Providing items or services not produced domestically, or which can improve domestic industry's
essential to improving the industrial structure and strengthening industrial competitiveness competitiveness through introduction of advanced technologies
• Technology that has been introduced to the country (date of technology introduction contract
notification) less than 3 years ago, or technologies that have been introduced over 3 years ago, but
are economically and technologically superior to already introduced technologies Grant Rate
Through negotiations, the cash grant ratio shall be determined at 5% and higher of the FDI, with the
• Technology with most of its processes carried out domestically.
upper limit determined by a closed formula. As for an R&D center, FDI and R&D funds from overseas
In order to receive tax exemption for compensation for technology introduction, the application for
that are used for stipulated purposes shall be included in the funds to be calculated (except for funds
exemption shall be made to the Minister of the relevant ministry before the sooner of the two: 1
raised domestically).
year after the contract date of the technology introduction contract date, or the first payment date of
compensations for technology introduction. If exemption applications are made and accepted for tax
exemption after the tax exemption application deadline has passed, exemptions shall be granted to
the taxation year of the exemption application date and the remaining exemption period afterwards. Legal Usage
However, tax already paid shall not be refunded. Foreign-invested companies may use cash grant only for the following purposes:
• Funds to support employment and training
• Land purchase ∙ lease
• Construction costs
• Foundation facilities installation cost
• Capital goods/research equipment purchasing costs

164 Foreign Investment Procedures and Incentives 165

IV. Foreign Direct Investment in Korea

In such cases, the purchasing amount of leased land for foreign investment companies shall be  Tax Reduction
included in the cash grant limit. The cash grant can be provided simultaneously with financial support
Category Eligible Industries Details
(except for cases where support items overlap) only if it is below the level of financial supportt.
High Technology Business & Industry
Support Service
Reduced for 7 years
• Manufacturing: USD 30 million (100% 5 years, 50% 2 years)
SUPPLY OF INDUSTRIAL SITES Stand-alone Type Foreign Investment
• Tourism: USD 20 million
• Logistics: USD 10 million
• R&D: USD 2 million
Foreign Investment Zones
Foreign investment zones are designated to attract foreign investments. Businesses that locate into Complex Type Foreign Investment Zone • Manufacturing: USD 10 million
Reduced for 5 years
Free Economic Zone • Tourism: USD 10 million
the area shall be provided with incentives. The zones are largely divided into two types: complex and Free Trade Zone • Logistics: USD 5 million USD
(100% 3 years, 50% 2 years)
stand-alone. The complex-type foreign investment areas refer to sections of national or general local
industrial complexes that have been pre-designated for lease or sales, for the purpose of attracting * National tax (corporation tax, income tax) and local tax (acquisition tax, registration tax, property tax) reduction

small- and medium-sized foreign-invested companies. In practice, these sites are for lease. However,
the stand-alone type foreign investment zones are designated in units of individual place of business
of foreign-invested companies that have been comprehensively established as the investor requests in  Location Support
region, timing, incentives, etc. for the purpose of attracting large-size investments. Category Details

• Provide lease site through designation and purchase of foreign-invested area

 Investment Region Designation Requirement Lease Site Support • Share of purchase costs
(site purchase) - Capital region: Central government 40%, local government 60%
- Non-capital region: Country 75%, local government 25%
Complex Type Stand-alone Type
Designation Standards • Stand alone foreign invested area 100%
• Over USD 1 million in high technology business: Complex type foreign-invested area 100%,
Manufacturing USD 30 million and over in foreign investment Rent reduction industrial complex 50%
Site completed and ready for companies' (national property) • Over USD 5 million in general manufacturing business: Complex type foreign-invested area 75%,
establishment industrial complex 50%
Tourism USD 20 million and over in foreign investment * Rent reduction of shared property shall be determined through regional laws

Logistics USD 10 million and over in foreign investment • Contracts concluded for tenants to move Subsidy for Difference Subsidies to be provided for the difference when selling industrial complexes to foreign-invested
into 3/4 of the pre-designated space in Sales Price companies for less than the development costs (share is the same as lease site support)
• Site prepared for companies'
Expand * Provide support within 50% of the FDI for cases of businesses with more than 30% of foreign investment ratio investing to install
R&D USD 2 million and over in foreign investments new factory facilities, etc.
• An express move-in demand by foreign
invested companies are proposed

 Financial Support
City mayors and provincial governors to designate after
City mayors and provincial governors will designate after Category Details
deliberation by the Foreign Investment Committee at regions
deliberation by the Foreign Investment Committee
desired by foreign investors
Provide cash support to investors of high degree technology etc. with more than USD 10 million to
Cash Support
Manager utilize part of the investments into factory construction, facility purchase etc.

• Principle: City mayors and provincial governors will manage. • Principle: City mayors and provincial governors will manage When newly employing 20 or more individuals, provide support equal to the support provided by
Training Subsidy
• Exception: The Management body of the existing industrial • Exception: The Management body will manage existing the local government for up to 6 months at KRW 100,000-500,000 per person, per month
complex will manage when establishing in a pre-developed industrial complex when establishing in a pre-developed
national industrial complex. national industrial complex. When newly employing 20 or more individuals, from the 21st new employee, provide support equal
Employment Subsidy to the support provided by the local government for up to 6 months at KRW 100,000-500,000 per
Applicable Law person, per month

Foreign Investment Promotion Act Foreign Investment Promotion Act * Provide support within 50% of the FDI for cases of businesses with more than 30% of foreign investment ratio investing to install
new factory facilities, etc.

166 Foreign Investment Procedures and Incentives 167

IV. Foreign Direct Investment in Korea

Free Trade Zones Free Economic Zones

Industrial complexes, airports, seaports, distribution complexes, freight terminals, etc. are designated Free Economic Zones are special areas where the application of domestic laws is alleviated through
as Free Trade Zones, which are specially designated zones for manufacturing and logistics businesses the enactment of laws on designation and operation of Free Economic Zones in order to make it
to move in and create mutual connections to generate synergies. In a Free Trade Zone, reductions on possible to provide various support towards equipping infrastructures, etc. such as high-tech industrial
national and local taxes are provided according to the type and scale of invested businesses. Also, complexes and hinterlands to make it possible to conduct manufacturing, logistics and tourism and
customs is eliminated to reserve tariffs and apply 0% in value added tax on foreign goods and specific by furnishing pleasant living conditions that will attract high quality human resources from home and
domestic goods that are brought into the Free Trade Zone. abroad. In the Free Economic Zone, various regulations are alleviated to provide various benefits such
as establishment and operation of foreign education institutions, hospitals, foreign language service,
This creates an advantage of not having to go through the complicated procedures of refunds, etc. permission on foreign currency, broadcasting, tax reductions and fund support.
when exporting products manufactured from imported raw materials. Also, lands or factories, etc.
can be leased for a long time at a low price. Such conditions create favorable business conditions for
foreign-invested companies in export-oriented manufacturing businesses, logistics businesses such  Incentives
as warehousing, logistics, loading, packing, etc. as well as in wholesale for import and export trades.
Category Reduction Eligibility Reduction Details
In particular, Free Trade Zones are the best location for large scale foreign investment companies that
operate both the manufacturing and logistics businesses.
• National tax (corporate tax, income tax) reduction
• Manufacturing: Over USD 10 million
for 5 years (100% 3 years, 50% 2 years)
Tax Reduction • Tourism: Over USD 10 million
The Free Trade Zone Management Office, the managing body of the Free Trade Zones, provide a one- • 100% exemption on local taxes (acquisition,
• Logistics: Over USD 5 million
registration, general excise tax) for 3 years
stop administration service by directly handling investment notification, permission to move in, factory
construction permission and import and export approval, etc. Imported capital goods used directly for
Customs Tariff
businesses eligible for income tax/corporate tax 100% reduction for 3 years
 Incentives
• Reduce shares such as farmland creation fees etc. for developers
Financial Support • Provide support from the National Treasury for infrastructure facilities
Category Reduction Eligibility Reduction Details • Reduce rent for foreign-invested companies (up to 100%)
• High technology business&industry support • National tax (corporate tax, income tax) reduction
services for 5 years (100% 3 years, 50% 2 years) Improve • Exclude from capital region restrictions on factory quota etc.
Tax Reduction Management • Exclude from mandatory employment of men of national merit · the challenged
• Manufacturing: USD 10 million • 100% exemption of acquisition, registration,
• Logistics: USD 5 million general excise tax for 15 years Environment • Unpaid weekly holidays, expand business types and periods for worker dispatches

Customs Tariff • Free Trade Zones are outside the customs area, hence customs tariff is exempted for overseas goods • Permit establishment of foreign educational institutions (primary, middle, high school, university)
Exemption • Exempt or refund customs tariff for domestic goods notified to have been carried into Free Trade Zones Improve Living • Permit establishment of foreign hospitals (which also treat Korean nationals)
Conditions • Foreign language services at government and public offices
• Domestic goods notified to have been carried into Free Trade Zones • Re-transmission of foreign broadcasts
0% Value Added Tax
• Overseas goods and services supplied or provided between tenant businesses of the Free Trade Zone
Simplify • Approval of the execution plan caused 36 agendas for approvals and permits to be discusses
• Free Trade Zone 100%
Administrative collectively
- Foreign-invested companies with over USD 10 million in new foreign investments
Procedures • Free Economic Zone Office installed as a one-stop service provider
Rent Reduction - With over 30% of the foreign-invested ratio and over USD 1 million in new foreign investments
- Over USD 500,000 in new foreign investments into high-tech businesses, high technology business
& industry support services

 Free Economic Zones Designated in 2003

 Airport/Seaport Designation Status
Category Incheon Busan·Jinhae Gwangyang Bay
Gwangyang Incheon International
Category Busan Seaport Incheon Seaport
Seaport Airport Five areas of Yulchon,
Three areas in Songdo, Five areas in the
Location Shindeok, Gwangyang City,
Yeongjong, Cheongna Busan/Jinhae Region
Designation Date 2002.1.1 2002.1.1 2003.1.1 2005.4.6 Hwayang, Hadong

Size (10,000 pyeong*) 161 204 65.4 (69.3) 63.3 Size (km²) 209 104.8 88.98

Tenant Businesses Number 6 63 21 Logistics Complex 14 Designation Day Aug. 6, 2003 Oct. 27, 2003 Oct. 27, 2003

*1 pyeong = 3.3 square meters

168 Foreign Investment Procedures and Incentives 169

IV. Foreign Direct Investment in Korea

 Free Economic Zones Newly Designated in April 2008

FDI Incentives in Korea's Logistics Industry
Category Yellow Sea Saemangeum∙Gunsan Daegu∙Gyeongbuk

South Chungcheong and Gunsan and Buan of

The Korean government held its 30th Free Economic Zone Committee and passed a
Location North Gyungbuk and Daegu City
Gyeonggi Provinces North Jeolla Province ”Resolution to Establish 7-Year Tax exemptions on Operation Regulations in the Free Economic
Size (km²) 55.05 66.99 39.55 Zones”s applied to the tax exemption incentives for 7 years for large-scale foreign investment
companies incorporated in the free economic zone in Korea.
According to the resolution, any foreign investment company investing USD 10 Million or more
into a logistics business might be eligible for a 100% tax exemption from income tax for five
OTHER SUPPORT years and 50% for the following two years. Such tax exemption benefits are available as most
National/Public Property Lease & Rent Reduction of the airport or port support complexes are located in the free trade zones around the free
Land, factories and other national or public properties owned by the country or local governments may economic zones.
be used, leased or sold to foreign-invested companies through a private contract. The lease period may
be up to 50 years. Upon maturity of the lease period, the contract may be renewed up to 50 years, or Foreign companies currently incorporated in the logistics complexes at Incheon Airport are
factories and other permanent facilities may be constructed on leased land on the condition that they subject to different levels of incentives according to the amount of investments. such as 50%
will be donated to the country, local governments, or returned to the original state.
exemption for five years for those with USD 5~10 Million or less, and 100% exemption for five
When leasing national property, rents may be reduced up to 50-100% through certain procedures for
foreign invested areas, or for lands that are in the national ∙ local ∙ urban high-tech industrial complex years for those with USD 10~15 Million respectively for the land lease amount.
and agriculture & industry complexes, according to the law on industrial location and development. In
leasing public property, the rent may be reduced according to local government regulations. The Ministry of Land, Transport and Maritime Affairs as the responsible ministry for logistics
decided to introduce incentives according to the investment size of foreign companies
 Eligibility & Rate of Rent Reduction for National Property newly incorporated in the support complexes around Busan New Port, Port of Gwangyang,
Pyeongtaek·Dangjin which belong to the free trade zone. Incentives will be applied differently
Reduction Rate Reduction Eligibility
according to the size of investments, exempting 50% of the lease fee for five years with an
• Foreign-invested companies in stand-alone type FIZs
• High degree technology businesses of 1 million USD or over in complex type FIZs investment of USD 5 Million, exempting the lease fee for five years with USD 10 Million, for
seven years with USD 15 Million, and for 15 years with USD 50 Million.
• Manufacturing businesses of USD 5 million and over in FIZs
75% • Businesses contributing to SOC expansion, industry structure adjustment and local government
financial independence
The effects of investment attraction seemed inefficient as the free trade zones have applied a
• Land within national industrial complex, local industrial complex, urban high-tech industrial complex
and agricultural complex
flat rate of preferred lease fees such as KRW 40 per m² for Busan New Port and 30 Won per
㎡ for Port of Gwangyang regardless of the size of investment up to now. Once the investment
invitation expansion system is announced, it is expected to apply to companies with public
applications in May for Port of Pyeongtaek·Dangjin, and in July for Busan New Port. Apart
Project Manager (PM) Designation and Operation from such measures, incentives for cargo business developments would also be given by the
In order to efficiently support foreign investors or investments by foreign-invested companies, the related local government in some places for the purpose of increasing the competitiveness
government designates and oversees PMs. PMs may be designated for an individual foreign investor or
of logistics, as well as solving the difficulties of the logistics industry while overcoming the
a foreign-invested company (designated by the President of KOTRA). The designated PM is notified to
the foreign investor or foreign-invested company. managerial crises of companies from the recent economic recession.

Key tasks include collection and provision of data or information, interview setup upon the request of foreign
investors or foreign-invested companies, foreign investment related support and coordination of administrative
matters as proxy, provision of help with housing lease and school entrance to help executives and staffs of
foreign-invested companies and their families settle and all other foreign investment related tasks.

170 Foreign Investment Procedures and Incentives 171

IV. Foreign Direct Investment in Korea

Living Environment in Korea Information on buying and renting a house

Real estate agencies for foreigners provide lease and trade services in English in areas with
large foreign communities. Information on real estate agencies can be found easily through
the Internet. The Seoul Metropolitan Government plans to expand the supply of houses or
lease apartments for foreigners while directly providing more information on real estate for
foreigners. In particular, it is initiating supply plans for town houses (a style of residence
common in Britain, where a number of houses are incorporated into a single building) for
foreign residents.
It is more common to request real estate agencies to find a house for rent rather than to rely
on advertisements in newspapers in Korea.

 Housing Rental

- Renter is required to pay a large deposit after contracting for one or two years.
‘Jeonse' - Deposit should be refunded at termination of the contract.
(Key Money Deposit) - Renter should pay 10 % of the deposit upon signing the contract.
- Renter should pay the remainder of the deposit.
- The deposit will be refunded upon termination of the contract.

Residence Renter is required to make monthly payments after providing a deposit (one- or two-year contract).

Deposit is ordinarily 10 to 20 times the monthly payment.
Korea has serviced residence hotels available for residents looking for both short and long-
Wolse 1
term stays. These serviced residences are similar to condominiums in North America, and are (Monthly Payment + Renter should pay 10 percent of the deposit upon signing the contract.
Key Deposit)
equipped with amenities like swimming pools, fitness centers, restaurants, and internet cafés.
Renter should pay the remainder of the deposit and provide the first monthly payment upon occupancy.
Furthermore, since these residences are geared towards foreigners, they are usually located
near tourist attractions or key business areas in the city.
The deposit will be refunded upon termination of the contract.

Renter should pay all monthly payments in advance upon signing a one-or two-year contract.
Wolse 2
Renter should pay 10 percent of the total monthly payment upon contract signing.
Payment of Total
Monthly Rent)
Renter should pay the remaining amount upon occupancy.

Major residential areas for foreigners (Seoul)

Major residential areas for foreigners include Youngdeungpo District, Guro District, Yongsan
District, and Geumcheon District, with high concentrations in Youngdeungpo, where foreign
companies are numerous, and in Guro, where an industrial complex employs many foreign

172 Living Environment in Korea 173

IV. Foreign Direct Investment in Korea

 Seoul Foreigner Residence Statistics (Based on Foreign resident registration ID Holders)

Overview of Korean Government Policies
Seongbuk The Ministry of Education, Science and Technology has made a pre-announcement of its
“Regulation on the Establishment and Operation of Foreigners’ Schools” that stipulates the
9.2% legal entities in question, admission qualifications, student ratios, and acknowledgement of
Mapo Jung 4.9%
4.5% academic attainments for foreign schools. Once this regulation is established, better foreigner
Jongno 4.1%
Yongsan schools will be built and the quality of the existing foreigners’ schools will be improved as such
Yeongdeungpo 14.1%
4.7% schools will be subject to domestic laws in a systematic manner.
Gangnam Songpa
8.3% 4.0%
Seocho According to statistics from the Seoul Metropolitan Office of Education, the official number
of foreign students in foreign schools (excluding universities) in Seoul stands at about 6,100
as of 2007, of which about 2,600 attend middle or high schools, 2,300 attend elementary
school, and 800 attend kindergarten. Although foreign schools typically have a six month
Region Yongsan
Gangnam Seocho
Jung Mapo Seongbuk Songpa Jongno Other Total waiting list for admission, most schools accept admission at anytime.
mun deungpo

Number 8,707 5,725 5,150 3,989 2,889 3,064 2,793 2,626 2,467 2,568 21,942 61,920
The Korean government has recently considered subsidies for the establishment of foreigners’
Ratio 14.1% 9.2% 8.3% 6.4% 4.7% 4.9% 4.5% 4.2% 4.0% 4.1% 35.4% 100%
schools to improve foreign education in Korea. For example, Seoul Yongsan International
School was established with subsidies from the government in August 2006, and Seoul
Metropolitan Government also announced its plan to establish two new foreigners’ schools by
Residential areas with a dense population of foreigners exist in Hannam-dong, Yeonhee-dong 2012.
and Yeonnam-dong with various foreign embassies. A “French village,” “Japanese village,” and
“Chinatown” exist with businesses and restaurants catering to foreign customers. Hospitals,
department stores and large retailers are distributed evenly all over Seoul.
School Overview and Cost
Most foreigners prefer renting their house but both resident and non-resident foreigners can
44 foreigners’ schools are operating in Korea that provide educational services for
purchase or sell any real estate using the same procedures applicable to Korean nationals.
communities from the US, the UK, Japan, France, Germany, China, Mongolia, Norway and
Taiwan. Twenty-three schools are located around the capital region, including Seoul. Their
general admission regulations require all students to hold a passport and at least one of their
parents must go through the basic interview processes.

174 Living Environment in Korea 175

IV. Foreign Direct Investment in Korea

 Curriculum & Tuition of Foreigner Schools

Courses Tuition (Unit: KRW) As of Nov 8, 2007 Lycee International Xavier (2002) 9,500,000 11,500,000 33,000,000 120
No. of
School Name
Students Christians Celebrate the 100 Anniversary 12,780,000
E. M. H. Elementary School Middle School High School 11,810,500 12,719,000 118
of Korea Foreign Schools + USD600
Gyeongnam International Foreign School
12,000,000 18,600,000 65 11,920,000 13,740,000 16,460,000
(2004) Korea Foreign School (Gyeonggi, 2006) 804
+ USD5,830 + USD6,200 + USD7,420
Kwangju Foreign School (1999) 8,694,000 9,439,200 10,184,400 86
Korea Youngdeungpo Chinese Elementary
1,200,000 - - 71
International Christian School School (1999)
6,632,050 - 11,356,250 240
(Uijeongbu, 1983)
10,902,000 - 14,836,000
Chinese dues Korea Kent Foreign School 300
Middle School: 15,500,000
Gunsan Chinese Elementary School (1941) Replacement - - 13
(Free education) Oversease Chinese Primary School (2001) 1,500,000 - - 415

Gyeonggi Suwon International School 10,694,000 + 13,189,000 + 16,050,000 + Oversease Chinese Secondary School (1999) - 2,964,000 3,164,000 628
(2006) USD5,270 USD5,330 USD5,330
Korea Daegu Chinese Secondary School
- 2,240,000 2,480,000 45
Global Christian School(GCSD) (2001) 11,679,750 13,189,000 16,050,000 36

Taejon Christian International School 12,719,000 - 17,988,300

(1958) Middle School: 19,000,000

Busan International School (1983) 16,115,000 152 There are many universities and graduate schools with curriculum in English in Korea. In
Busan Foreign School (1996) 15,000,000 16,000,000 131 addition, the Netherlands Shipping and Transport College Korea, as the first branch school of
Busan Japanese School (1975) 31,197,207 - 28 a foreign university, was established at the Gwangyang Bay Area Free Economic Zone in Port
Busan Chinese Elementary School (1951) 1,480,000 - - 156 Gwangyang (in 2007).
Busan Chinese Secondary School (1951) - 2,200,000 2,500,000 139

Seoul International School (1973)

16,353,000 - 19,987,000
The Netherlands Shipping and Transport College Korea,
Middle School: 16,300,000 + USD2,000
incorporated in the World Marine Center in Port Gwangyang,
Seoul German school (1976) 13,200,000 - 146
is providing students with an internationalized curriculum,
Seoul Academy International School (1983) 18,000,000 - 155
including lectures entirely in English with visiting professors
14,250,000 14,500,000 18,200,000
Seoul Foreign School (1912)
+ USD5,000 + USD5,400 + USD5,700
1,458 from the Netherlands after admitting students for the full time
Yongsan International School of Seoul 11,928,000 13,543,000 Master’s Degree Shipping and Transport Program from March
(1990) + USD1,600 2008. They have admitted 18 students (10 Koreans and
Seoul Japanese School (1972) 19,200,000 - 422 8 foreigners), 29 students (10 Koreans and 19 foreigners)
6,668,000 French 9,064,000 French 9,804,000French under various master’s programs. Tuition for the 18 month master’s degree course is 10,000
Seoul French school (1974) and and and 319
8,360,000 Others 11,730,000 Others 12,310,000 Others
Euros as of 2009.
13,000,000 +
Asia Pacific International School (2007) 14,000,000 + USD3,000 113
USD3,000 Many foreign schools, including colleges and graduate schools are planned for the future.
Okpo International School (2002) 10,560,000 11,880,000 - 113

Indianhead International School (1996) 14,000,000 14,500,000 15,000,000 168

Incheon Chinese Jungsan Secondary

1,603,380 2,189,200 2,290,800 512
School (2003)

Uijeongbu Chinese Elementary School (1953) 1,800,000 - - 83

Wonju Chinese Elementary School (1956) 1,440,000 - - 68

Jeonbuk Foreign School (2001) 10,630,000 11,520,000 23

Jaehan Mongol School (1958) 7,500,000 - 91

Graduates Global Christian School (1997) 14,179,750 15,088,250 63

176 Living Environment in Korea 177

IV. Foreign Direct Investment in Korea

Medical Services Transport

Medical Facilities SUBWAY
Medical facilities for foreigners (in Seoul) include general hospitals with medical centers for Seoul has 11 subway lines in total including Lines 1 through 8,
foreigners. Some individual hospitals provide treatment in foreign languages. Thirty hospitals which operate in central areas of city, and the Bundang Line,
in total provide diagnosis and treatment for foreigners including medical centers and clinics the Incheon Line and the Central Line, which operate between
in Seoul. Eleven hospitals in total including Seoul National University Hospital and Samsung Seoul and adjoining regions. They provide Korean and English
Seoul Hospital provide services around the clock. Eight hospitals operate medical hotlines announcements. Four more subway lines with a total length of
(emergency telephone system) in English, including Seoul National University Hospital, 88.2km are expected around the capital, including the New Bundang Line, and the New Ansan
Severance Hospital, Youngdong Severance Hospital, Seoul Samsung Hospital, Hyundai Asan Line.
Hospital, Soonchunhyang University Hospital, Gangnam Cha Hospital, and Hanyang University
International Hospital.

Health Insurance
Korean regulation requires a prescription from a doctor for non over-the-counter drugs. Non-prescription medication Bus systems in Korea have systematic structures including
such as cold and indigestion medicine as well as vitamins and health aids such as pregnancy-testing kits can be
purchased at most pharmacies. When you visit a pharmacy to purchase prescription medicine for the first time, you
transportation card fare, and transfer discounts etc. Information
should present your medical insurance card. on bus lines can be secured through the Internet or urban traffic
maps. Bus line information for each bus is also displayed at every
bus stop and some buses have broadcasting systems in English
 Some of General Hospitals for Foreigners as well.
Hospital Name Website (Area) Phone Seoul operates 7,792 buses on 402 lines as of 2007 and overall bus operations in Seoul can
Samsung Medical Center (Seoul) 02-3410-2114 be confirmed on a real-time basis over the Internet or via mobile phones.
Kangbuk Samsung Hospital (Seoul) 02-2001-2001

Yonsei Severance Hospital (Seoul) 1599-1004

ASAN Medical Center (Seoul) 02-3010-3114

Cheil General Hospital (Seoul) 02-2000-7000
Taxi fare is well arranged in a systematic manner, and regular,
St.Mary's Hospital (Seoul) 02-3779-1114
deluxe and call taxis are available 24 hours a day. In addition,
Kangnam St.Mary's Hospital (Seoul) 02-590-1114
a taxi fare system is under operation to make payments using
Seoul National University Hospital (Seoul) 02-2072-2114
transportation cards or credit cards.
Soon Chun Hyang University Hospital (Seoul) 02-709-9114

Kangnam CHA General Hospital (Seoul) 02-3468-3000

Ajou University hospital (Gyeonggi) 031-219-5114
Korea has recently joined the ranks of countries with high speed
Shihwa General Hospital (Gyeonggi) 031-432-2600
trains. The KTX, which started operations in April 2004, reaches
Busan National University Hospital (Busan) 051-254-0171
speeds of 300 km per hour. High-speed service will have impact
Kangnam Severance Hospital (Seoul) 02-2019-2114
in various areas, by connecting every part of the country within 2
hours. It is fast, safe, comfortable, and environmentally-friendly,
and comes with video and audio systems and other facilities.

178 Living Environment in Korea 179

IV. Foreign Direct Investment in Korea


Anyone who has an international license may drive cars in Korea for a year. An overseas Domestic flights
license can be exchanged for a domestic license only for those who stay 90 days or longer Korean Air and Asiana Airlines provide a domestic flight
after registration. Those who do not have any driver’s license may acquire a driver’s license network linking Seoul to Korea's 16 major cities. Flying time to
after applying for and passing a test in Korea (available in English, German, French, Japanese, any of these destinations is approximately one hour's duration.
Chinese and Vietnamese). Reservations and ticketing can be done by calling a travel
agent or the airline office (WHEN).

For reservations
Asiana Air (Tel: 82-1588-8000, Domestic) / Website:
Korean Air (Tel: 82-1588-2001, Domestic) / Website:
Jeju Air (Tel: 82-1599-1500, Domestic) / Website:

When you plan to use domestic flights in Seoul, there’s an airport in Gimpo.
Gimpo International Airport is located in western area of Seoul, which is within 30-60 minites
distance depends on transportations. Not only by public transportations such as subways,
local buses and taxis, but also you can get there by Airport express buses, KAL limousine
buses and Airport limousine buses. To be assured of a seat, tickets must be purchased before
the reservation expiration date.

180 Living Environment in Korea 181

IV. Foreign Direct Investment in Korea

Hotel & Residence Sheraton Grande Walkerhill

Class: ★★★★★
Room:635 Rooms
Mayfield Hotel
Class: ★★★★★
Room: 202 Rooms
Tel: 82-2-455-5000 Tel: 82-2-6090-5522
Hotels in Korea Adddress: 21 Gwangjang-dong, Adddress: 426 Balsan-dong,
Gwangjin-gu, Seoul, South Korea Gangseo-gu, Seoul, South Korea

W Seoul-Walkerhill Samjung Hotel

Class: ★★★★★ Class: ★★★★
Room: 253 Rooms Room: 162 Rooms
Tel: 82-2-465-2222 Tel: 82-2-557-1221
Adddress: 21 Gwangjang-dong, Adddress: 604-11, Yeoksam-dong,
Gwangjin-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea

Hotel Prima Seoul Riviera Hotel Seoul

Class: ★★★★ Class: ★★★★
Room: 120 Rooms Room: 316 Rooms
Tel: 82-2-6006-9114 Tel: 82-2-541-3111
Adddress: 52-3, Cheongdam-dong, Adddress: 53-7 Cheongdam-dong,
Gangnam-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea

Best Western Premier Gangnam Hotel Ramada Hotel & Suites

Class: ★★★★ Class: ★★★★
Room: 128 Rooms Room: 331 Rooms
Tel: 82-2-6474-2000 Tel: 82-2-2119-8000
Adddress: 205-9 Nonhyun-dong, Adddress: 191-1 Shunwha-dong,
Gangnam-gu, Seoul, South Korea Jung-gu, Seoul, South Korea
Grand Hilton Seoul Hotel Renaissance Seoul Hotel Hotel La Mir Koreana Hotel
Class: ★★★★★ Class: ★★★★★ Class: ★★★★ Class: ★★★★
Room: 501 Rooms Room: 494 Rooms Room: 150 Rooms Room: 345 Rooms
Tel: 82-2-3216-5656 Tel: 82-2-555 0501 Tel: 82-2-2018-0000 Tel: 82-2-2171-7000
Adddress: 201-1 Hongeun-dong, Adddress: 676 Yeoksam-dong Adddress: 662-7 Yeoksam-dong Adddress: 61-1, Taepyeongno 1-ga,
Seodaemun-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea Jung-gu, Seoul, South Korea

Imperial Palace Hotel Hotel LotteWorld Hotel President Sejong Hotel

Class: ★★★★★ Class: ★★★★★ Class: ★★★★ Class: ★★★★
Room: 430 Rooms Room: 533 Rooms Room: 303 Rooms Room: 275 Rooms
Tel: 82-2-3440-8000 Tel: 82-2-411-7310 Tel: 82-2-753-3131 Tel: 82-2-773-6000
Adddress: 248-7 Nonhyun-dong, Adddress: 40-1 Jamsil-dong, Adddress: 188-3, Euljiro 1-ga, Adddress: 61-3, Choongmuro 2-ga,
Gangnam-gu, Seoul, South Korea Songpa-gu, Seoul, South Korea Jung-gu, Seoul, South Korea Jung-gu, Seoul, South Korea

Seoul Plaza Hotel Lotte Hotel Seoul Seoul Royal Hotel Pacific Hotel
Class: ★★★★★ Class: ★★★★★ Class: ★★★★ Class: ★★★★
Room: 455 Rooms Room: 1479 Rooms Room: 307 Rooms Room: 135 Rooms
Tel: 82-2-771-2200 Tel: 82-2-771-1000 Tel: 82-2-756-1112 Tel: 82-2-777-7811~9
Adddress: 23, Taepyeongno 2-ga, Adddress: 1 Sogong-dong, Adddress: 6 Myeong-dong 1-ga, Adddress: Namsan-dong 2-ga,
Jung-gu, Seoul, South Korea Jung-gu, Seoul, South Korea Jung-gu, Seoul, South Korea Jung-gu, Seoul, South Korea

182 Living Environment in Korea 183

IV. Foreign Direct Investment in Korea

Best Western Premier Seoul Garden Hotel Holiday Inn Seongbuk Seoul Hotel Hyundai Gyeongpodae Chunchon Sejong Hotel
Class: ★★★★ Class: ★★★★ Class: ★★★★ Class: ★★★
Room: 362 Rooms Room: 128 Rooms Room: 96 Rooms Room: 65 Rooms
Tel: 82-2-717-9441 Tel: 82-2-3216-5656 Tel: 82-33-610-7751 Tel: 82-33-252-1191
Adddress: 169-1 Dohwa-dong, Adddress: 3-1343 Jongam-dong, Adddress: 274-1 Gangmun-dong, Adddress: 15-3 Bongui-dong,
Mapo-gu, Seoul, South Korea Seongbuk-gu, Seoul, South Korea Gangneung-si, Gangwon-do, South Korea Chuncheon-si, Gangwon-do, South Korea

Ramada Seoul Hotel Capital Hotel Agni(ex. Sun Castle Hotel) Hotel Sorak Kyoyuk Munhwa Hoekwan
Class: ★★★★ Class: ★★★★ Class: ★★★ Class: ★★★
Room: 244 Rooms Room: 287 Rooms Room: 45 Rooms Room: 77 Rooms
Tel: 82-2-6202-2000 Tel: 82-2-792-1122 Tel: 82-33-661-1950 Tel: 82-33-639-8100
Adddress: 112-5 Samsung-dong, Adddress: 22-76 Itaewon-dong, Adddress: San 84-2 Jumunjin-eup , Adddress: 155 Domun-dong,
Gangnam-gu, Seoul, South Korea Yongsan-gu, Seoul, South Korea Gangneung-si, Gangwon-do, South Korea Sokcho-si, Gangwon-do, South Korea

Hotel Ellui Lexington Hotel

Class: ★★★★ Class: ★★★★ Gyeonggi-do
Room: 139 Rooms Room: 235 Rooms
Tel: 82-2-514-3535 Tel: 82-2-6670-7000 Hotel Miranda Ichon Hotel Castle
Adddress: 129 Cheongdam-dong, Adddress: 13-3 Yoido-dong, Class: ★★★★ Class: ★★★★
Gangnam-gu, Seoul, South Korea Youngdeungpo-gu, Seoul, South Korea Room: 209 Rooms Room: 81 Rooms Tel: 82-31-639-5000 Tel: 82-31-211-6666
Adddress: 408-1 Anhung-dong, Adddress: 144-4 Wooman-dong paldal-
Seoul Palace Hotel Novotel Ambassador Doksan Ichon-si, Gyeonggi-do, South Korea gu, Suwon-si, Gyeonggi-do, South Korea
Class: ★★★★ Class: ★★★★
Room: 283 Rooms Room: 230 Rooms
Tel: 82-2-532-5000 Tel: 82-2-3282-6160
Adddress: 63-1 Banpo-dong Adddress: 1030-1 Doksan 4-dong Incheon
Seocho-gu, Seoul, South Korea Gumchon-gu, Seoul, South Korea Goldensky Resort Incheon Paradise Incheon Hotel
Class: ★★★★★ Class: ★★★★★
Room: 201 Rooms Room: 176 Rooms
Hotel PJ Seoul Olympic Pakrtel Tel: 82-32-745-5074 Tel: 82-32-452-8236
Class: ★★★★ Class: ★★★★ Adddress: 773 Eulwang-dong, Adddress: 3-2 Hang-dong 1-ga,
Room: 247 Rooms Room: 125 Rooms Jung-gu, Incheon, South Korea Joong-gu, Incheon, South Korea
Tel: 82-2-2266-2151 Tel: 82-2-410-2114
Adddress: 73-1 Inhyeon-dong 2-ga, Adddress: 88 Bangi-dong, Songpa-gu,
Jung-gu, Seoul, South Korea Seoul, South Korea Best Western Premier Incheon Airport Hotel Ramada Songdo Hotel
Class: ★★★★ Class: ★★★★
Room: 301 Rooms Room: 204 Rooms
Gangwon-do Tel: 82-32-743-1000 Tel: 82-32-832-2000
Kensington Stars Hotel kensington Flora Hotel Adddress: 2850 International Business Adddress: 812 Dongchun 1-dong,
Center, Unseo-dong, Jung-gu, Incheon, Yeonsu-gu, Incheon, South Korea
Class: ★★★★★ Class: ★★★★
South Korea /
Room: 120 Rooms Room: 306 Rooms
Tel: 82-33-635-4001 Tel: 82-33-330-5000
Adddress: 106-1 Seorak-dong, Adddress: 221-1 Ganpyeong-ri, Jinbu-
Sokcho-si, Gangwon-do, South Korea
Incheon Airport Oceanside Hotel Incheon Airpark Hotel
myeon, Pyeongchang-gun, Gangwon- do, South Korea Class: ★★★ Class: ★★★★★
Room: 53 Rooms Room: 40 Rooms
Tel: 82-32-746-0072 Tel: 82-32-752-2266~8
Hotel Sorak Park Naksanbeach Hotel Adddress: 128-17, Deokgyo-dong, Adddress: 2798-2 Unseo-dong,
Class: ★★★★ Class: ★★★★ Jung-gu, Incheon, South Korea Jung-gu, Incheon, South Korea
Room: 121 Rooms Room: 127 Rooms
Tel: 82-33-636-7711 Tel: 82-33-672-4000
Adddress: 74-3 Seorak-dong, Adddress: 3-2 Jeonjin-ri, Ganghyeon-
Sokcho-si, Gangwon-do, South Korea myeon, Yangyang-gun, Gangwon-do, South Korea /

184 Living Environment in Korea 185

IV. Foreign Direct Investment in Korea

Haeundae Grand Hotel Busan Lotte Hotel Hotel-Js Hotel Crystal
Class: ★★★★★ Class: ★★★★★ Class: ★★★★ Class: ★★★
Room: 321 Rooms Room: 804 Rooms Room: 70 Rooms Room: 69 Rooms
Tel: 82-51-7400-114 Tel: 82-51-810-1000 Tel: 82-53-756-6601 Tel: 82-53-655-7799
Adddress: 651-2 Woo-dong, Adddress: 503-15 Bujeon-dong, Adddress: 326-1, Shincheon 4-dong, Adddress: 1196-1 Duryu 1-dong,
Haeundae-gu, Busan, South Korea Pusanjin-gu, Busan, South Korea Dong-gu, Daegu, South Korea Dalseo-gu, Daegu, South Korea

Westin Chosun Hotel, Busan Paradise Hotel Busan

Hotel Inter-Burgo Exco Hotel Airport
Class: ★★★★★ Class: ★★★★★
Room: 305 Rooms Room: 521 Rooms Class: ★★★★ Class: ★★★
Tel: 82-51-749-7000 Tel: 82-51-742-2121 Room: 303 Rooms Room: 51 Rooms
Adddress: 737 Woo 1-dong, Adddress: 1408-5 Jung-dong, Tel: 82-53-3800-114 Tel: 82-53-260-0001
Haeundae-gu, Busan, South Korea Haeundae-gu, Busan, South Korea Adddress: Sangyeok 2-dong, Buk-gu, Adddress: 400-1, Jijeo-dong, Dong-gu, Daegu, South Korea Daegu, South Korea
Hotel Commodore Busan The Hotel Nongshim, Busan
Class: ★★★★ Class: ★★★★
Room: 313 Rooms Room: 242 Rooms Daejeon
Tel: 82-51-466-9101 Tel: 82-51-550-2100
Adddress: 743-80 Youngju-dong, Adddress: 137-7 Onchun-dong, Hotel Riviera Yuseong Yousung Hotel
Jung-gu, Busan, South Korea Dongnae-gu, Busan, South Korea Class: ★★★★★ Class: ★★★★ Room: 174 Rooms Room: 190 Rooms
Tel: 82-42-823-2111 Tel: 82-42-822-0811
Hotel Paragon Busan Phoenix Hotel Adddress: 444-5 Bongmyung-dong, Adddress: 480 Bongmyoung-dong,
Yuseong-gu, Daejeon, South Korea yousung-gu, Daejeon, South Korea
Class: ★★★★ Class: ★★★
Room: 142 Rooms Room: 107 Rooms
Tel: 82-51-328-2001 Tel: 82-51-245-8061
Adddress: 564-25 Gxeabeop-dong, Adddress: 8-1 street 5 Nampo-dong
Hotel Spapia Adria Hotel
Sasang-gu, Busan, South Korea Jung-gu, Busan, South Korea Class: ★★★★ Class: ★★★
Room: 220 Rooms Room: 80 Rooms
Tel: 82-42-600-6000 Tel: 82-42-828-3636
Sunset Business Hotel Busan Homers Hotel Adddress: 545-5 Bongmyung-dong, Adddress: 442-5 Bongmyoung-dong,
Class: ★★★ Class: ★★★★ Yusong-gu, Daejeon, South Korea Yousung-gu, Daejon, South Korea
Room: 72 Rooms Room: 103 Rooms
Tel: 82-51-730-9900 Tel: 82-51-750-8000
Adddress: 1391-66 Joong-dong, Adddress: 193-1 Gwangan 2-dong,
Haeundae-gu, Busan, South Korea Suyung-gu, Busan, South Korea Hongin Hotel Best Western Legend Hotel
Class: ★★★ Class: ★★★
Room: 49 Rooms Room: 75 Rooms
Tel: 82-42-822-2000 Tel: 82-42-822-4000
Daegu Adddress: 536-8 Bongmyoung-dong, Adddress: 547-5 Bongmyoung-dong,
Yousung-gu, Daejon, South Korea Yousung-gu, Daejon, South Korea
Hotel Novotel Daegu City Centre Hotel Inter-Burgo
Class: ★★★★★ Class: ★★★★★
Room: 203 Rooms Room: 207 Rooms
Tel: 82-53-664-1184 Tel: 82-53-602-7114
Adddress: 11-1 Munhwa-dong, Adddress: 300 Manchon-dong,
Jung-gu, Daegu, South Korea Soosung-gu, Daegu, South Korea Hotel Prado Hotel Prado
Class: ★★★★★ Class: ★★★★
Room: 120 Rooms Room: 111 Rooms
Daegu Prince Hotel Eldis Regent Hotel Tel: 82-62-717-7000 Tel: 82-62-654-9999
Adddress: 1238-3 Chipyeong-dong, Adddress: 638-1 Beak woon-dong,
Class: ★★★★ Class: ★★★★
Seo-gu, Gwangju, South Korea Nam-gu, Gwangju, South Korea
Room: 117 Rooms Room: 80 Rooms
Tel: 82-53-650-5217 Tel: 82-53-253-7711
Adddress: 1824-2 Daemyong 2-dong, Adddress: 360 Dongsan-dong, Chung-
Nam-gu, Daegu, South Korea gu, Daegu, South Korea

186 Living Environment in Korea 187

IV. Foreign Direct Investment in Korea

Shinyang Park Hotel Hotel Mudeungpark City 7 Pullman Ambassador Hotel Namhae SportsPark Hotel
Class: ★★★★ Class: ★★★★ Class: ★★★★★ Class: ★★★★
Room: 87 Rooms Room: 127 Rooms Room: 321 Rooms Room: 95 Rooms
Tel: 82-62-228-8000 Tel: 82-62-226-0011 Tel: 82-55-600-0700 Tel: 82-55-862-8811
Adddress: 20-8, Jisan-dong, Dong-gu, Adddress: San 63-1, Jisan-dong, Adddress: 333 Dudae-dong, Adddress: 1182-9 Seosang-ri, Seo-myeon,
Gwang-ju, South Korea Dong-gu, Gwang-ju, South Korea Changwon-si, Gyeongnam, South Korea Namhae-gun, Gyeongnam, South Korea

Changwon Hotel Namiltte Hotel Ellie Nurse

Ulsan Class: ★★★★ Class: ★★★★
Ulsan Lotte Hotel Hotel Hyundai Ulsan Room: 173 Rooms Room: 59 Rooms
Tel: 82-55-283-5551 Tel: 82-55-832-9800
Class: ★★★★★ Class: ★★★★★
Adddress: 99-4 Jungang-dong, Adddress: 707 Hyangchon-dong,
Room: 211 Rooms Room: 283 Rooms
Changwon-si, Gyeongnam, South Korea Sacheon-si, Gyeongnam, South Korea
Tel: 82-52-960-1000 Tel: 82-52-251-2233
Adddress: 1480-1 Samsan-dong, Adddress: 283 Jeonha-dong, Dong-gu,
Nam-gu, Ulsan, South Korea Ulsan, South Korea
Gyeongju Comodore Hotel Gyeongju Kolon Hotel
Chungcheongnam-do Class: ★★★★★ Class: ★★★★★
Onyang Tourist Hotel On Yang Grand Hotel Room: 260 Rooms Room: 318 Rooms
Tel: 82-54-745-7701 Tel: 82-54-746-9001
Class: ★★★★ Class: ★★★★
Adddress: 410-2, Sinpyeong-dong, Adddress: 111-1 Ma-dong,
Room: 113 Rooms Room: 151 Rooms
Gyeongju-si, Gyeongbuk, South Korea Gyeongju-si, Gyeongbuk, South Korea
Tel: 82-41-545-2141 Tel: 82-41-543-9711
Adddress: 242-10 Onyang 1-dong, Adddress: 300-28 Oncheon-dong,
Asan-si, Chungnam, South Korea Ahsan-si, Chungnam, South Korea
Hyundai Hotel Gyeongju Concorde Hotel
Class: ★★★★★ Class: ★★★★★
Room: 449 Rooms Room: 307 Rooms
Chungcheongbuk-do Tel: 82-54-748-2233 Tel: 82-54-745-7000
Adddress: 477-2 Shinpyeong-dong, Adddress: 410 Shinpyong-dong,
Ramada Korea Cheongpung Resort
Gyeongju-si, Gyeongbuk, South Korea Gyeongju-si, Gyeongbuk, South Korea
Class: ★★★★★ Class: ★★★★
Room: 331 Rooms Room: 276 Rooms
Tel: 82-43-290-1000 Tel: 82-43-640-7000
Adddress: 500-3 yulryang-dong, Sangdong- Adddress: 33 Kyo-ri, Cheongpung-myeon, Gyeongju Hillton hotel Gyeongju Temf Hotel
gu, Cheongiu-si, Chungbuk, South Korea Jecheon-si, Chungbuk, South Korea Class: ★★★★★ Class: ★★★★
Room: 324 Rooms Room: 270 Rooms
Tel: 82-54-745-7788 Tel: 82-54-745-8100
Adddress: 370 Shinpyung-dong, Adddress: 150-2 Shinpyong-dong,
Lake Hills Hotel(songnisan) Suanbo Sangnok Hotel
Gyeongju-si, Gyeongbuk, South Korea Gyeongju-si, Gyeongbuk, South Korea
Class: ★★★ Class: ★★★
Room: 132 Rooms Room: 101 Rooms
Tel: 82-43-542-5281 Tel: 82-43-845-3500
Adddress: 198 Sanae-ri, Songnisan- Adddress: 292 Onsen-ri, Suanbo-myeon,
myeon, Boeun-gun, Chungbuk, South Korea chungju-si, Chungbuk, South Korea Jeollanam-do
Hotel Hyundai Mokpo Eldorado Resort
Class: ★★★★★ Class: ★★★★
Room: 208 Rooms Room: 103 Rooms
Gyeongsangnam-do Tel: 82-61-463-2233 Tel: 82-61-260-3300
Adddress: 1237-6 Sanpo-ri, Sanho-eup, Adddress: 233-42 Woojeon-ri, Jeungdo-
Samsung Geoje Hotel Hilton (Namhae Golf and Spa Resort)
Youngnam-gun, Jeonnam, South Korea myeon, Sinan-gun, Jeonnam, South Korea
Class: ★★★★★ Class: ★★★★★
Room: 80 Rooms Room: 170 Rooms
Tel: 82-55-631-2114 Tel: 82-55-860-0100
Adddress: San 2-10, Jangpyeong-dong, Adddress: San 35-5, Doekwol-ri,
Geoje-si, Gyeongnam, South Korea Nam-myeon, Namhae-gun, Gyeongnam, South Korea /

188 Living Environment in Korea 189

IV. Foreign Direct Investment in Korea

Jeollabuk-do Residences in Korea

Daemyung Byunsan Cloud Nine Core Hotel
Class: ★★★★★ Class: ★★★★
Room: 131 Rooms Room: 111 Rooms Seoul and Busan
Tel: 82-63-580-8800 Tel: 82-63-285-1100
Adddress: 257 Gyeoppo-ri, Byeonsan- Adddress: 627-3 Nosong-dong, Wansan- M Chereville Dormy Inn Seoul
meon, Buan-gun, Jeonbuk, South Korea gu, Jeonju-si, Jeonbuk, South Korea Class: REGIDENCE Class: REGIDENCE Room: 124 Rooms Room: 195 Rooms
Tel: 82-2-533-9600 Tel: 82-2-6474-1515
Adddress: 1316-31 Seocho 4-dong, Adddress: 205-8 Nonhyeon-dong,
Chonju Core Riviera Hotel Daemyung Resort Seocho-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea
Class: ★★★★ Class: ★★★★
Room: 166 Rooms Room: 373 Rooms
Tel: 82-63-232-7000 Tel: 82-63-580-8800 Ulji-Ro Co-op Residence Coatel Chereville
Adddress: 26-5 Poongnam-dong, Wansan- Adddress: 257 Gyeoppo-ri, Byeonsan- Class: REGIDENCE Class: REGIDENCE
gu, Jeonju-si, Jeonbuk, South Korea meon, Buan-gun, Jeonbuk, South Korea Room: 252 Rooms Room: 365 Rooms Tel: 82-2-2269-4600 Tel: 82-2-6288-3333
Adddress: 32 Uljiro 6-ga, Jung-gu, Adddress: 1330 Seocho-dong,
Seoul, South Korea Seocho-gu, Seoul, South Korea

Hyatt Regency Jeju Shilla Hotel Jeju Hotel Provista Somerset Palace Seoul
Class: ★★★★★ Class: ★★★★★ Class: REGIDENCE Class: REGIDENCE
Room: 224 Rooms Room: 330 Rooms Room: 153 Rooms Room: 431 Rooms
Tel: 82-64-733-1234 Tel: 82-64-735-5114 Tel: 82-2-597-1140,1141 Tel: 82-2-6730-8888
Adddress: 3039-1 Saekdal-dong, Adddress: 3039-3 Saekdal-dong, Adddress: 1677-8 Seocho 1-dong, Adddress: No 85 Susong-dong,
Seogwipo-si, Jeju-do, South Korea Seoguipo-si, Jeju-do, South Korea Seocho-gu, Seoul, South Korea Jongno-gu, Seoul, South Korea

Vabien Suites II Stay 7 Mapo

Suites Hotel Jeju Jeju Grand Hotel Class: REGIDENCE Class: REGIDENCE
Class: ★★★★★ Class: ★★★★★ Room: 286 Rooms Room: 56 Rooms
Room: 90 Rooms Room: 512 Rooms Tel: 82-2-6399-0113 Tel: 82-2-365-9010
Tel: 82-64-738-3800 Tel: 82-64-747-5000 Adddress: 25-10 Uijuro 1-ga, Adddress: SK HUB Bldg, 425-5 Ahyon-
Adddress: 2812-10 Saekdal-dong, Adddress: 101 Yeon-dong, Jeju-si, Jung-gu, Seoul, South Korea dong, Mapo-gu, Seoul, South Korea
Seogwipo-si, Jeju-do, South Korea Jeju-do, South Korea
Fraser Place Central Seoul Casaville Shinchon Residence
Seogwipo KAL Hotel Jeju KAL Hotel Room: 235 Rooms Room: 183 Rooms
Tel: 82-2-2220-8888 Tel: 82-2-6220-4000
Class: ★★★★★ Class: ★★★★★ Adddress: 1 Soonhwa-dong, Jung-gu, Adddress: 57-26 Nogosan-dong,
Room: 225 Rooms Room: 282 Rooms
Seoul, South Korea Mapo-gu, Seoul, South Korea
Tel: 82-64-733-2001 Tel: 82-64-724-2001
Adddress: 486-3 Topyeong-dong, Adddress: 1691-9 Yido 1-dong, Jeju-si,
Seogwipo-si, Jeju-do, South Korea Jeju-do, South Korea
Artnouveau City Casaville Samsung Station Residence
Room: 226 Rooms Room: 200 Rooms
Tel: 82-2-560-9000 Tel: 82-2-539-9080
Lotte Hotel Jeju Jeju Oriental Hotel
Adddress: 701-1 Yeoksam-dong, Adddress: 945-29 Daechi 3-dong,
Class: ★★★★★ Class: ★★★★★ Gangnam-gu, Seoul, South Korea Gangnam-gu, Seoul, South Korea
Room: 500 Rooms Room: 313 Rooms
Tel: 82-64-731-1000 Tel: 82-64-752-8222
Adddress: 2812-4 Saekdal-dong, Adddress: 1197 Samdo 2-dong, Jeju-si, Haeundae Centum Hotel Seacloud Hotel
Seoguipo-si, Jeju-do, South Korea Jeju-do, South Korea Class: REGIDENCE Class: REGIDENCE
Room: 543 Rooms Room: 416 Rooms
Tel: 82-51-720-9000 Tel: 82-51-933-1000
Adddress: 1505 Woo 2-dong, Adddress: 1392-100 Jung-dong,
Haeundae-gu, Busan, South Korea Haeundae-gu, Busan, South Korea

190 Living Environment in Korea 191

IV. Foreign Direct Investment in Korea

Sightseeing In Korea Suwon Hwaseong
Mt. Gwanak

Built of only plaster

Seoul & surrounding areas and soil, this is one
of the best fortresses
Gyeongbokgung (Palace) will allow you to experience the atmosphere of from the Joseon
everyday life and Dynasty.
culture of Korean The fortress is a
This palace was built ancestors through
by King Taejo, the product of King Jeongjo’s regret and filial piety,
Korean traditional also registered on UNESCO’s World Heritage List
founder of the Joseon performing arts, food
Dynasty in 1395. It in 1997. The fortress has 4 entrances along with
and crafts. many builtin defensive features. Gwanaksan is situated at the southern tip of Seoul,
was burned down in
and the shape of the mountain looks like a fire.
1592 by Japanese
There are dozens of mountain tops covered with
invaders, and rebuilt by King Gojong in the
1800s. Some buildings such as Geunjeongjeon,
Jogyesa (Temple) Mt. Nam rocks and old trees. It is also called Sogeumgang or Seogeumgang, which means west of Mt.
Hyangwonjeong and the Chimney of Amisan have
Jogyesa, located in the middle of downtown, is the Geumgangsan, the most beautiful mountain on the
been well preserved and reflect the beauty of
head temple of Korean Buddhism built in 1939. Many people exercise Korean Peninsula.
Korean traditional cultural heritage.
in Namsan in the early
morning. You can see the
sea in Incheon, although Itaewon
Deoksugung (Palace) fa r f rom Seo ul, on a clear day. In the park,
you will find Palgakjeong, Itaewon is situated
Originally called Jeongneung dong Haenggung
a playground, botany in the main area of
but later renamed Gyeongungung by King
garden, and cable car. It Seoul and became
Gwanghaegun in 1611, the king moved to
is a good place to study famous for foreigners
Changdeokgung in 1615, and this palace
the environment, take a as a shopping town
remained empty for 280 years. When King Gojong
walk or exercise. after the Asian Games
started to live here after returning from the
in 1986 and Seoul Olympic Games in 1988. Most
Russian Legation in 1897, it was then used as
shops sell high quality goods at low prices, making
the main palace. However, the name Deoksugung You will find Daeungjeon, Buddhist Hall, Buddhist
Itaewon the most popular shopping destination for
was used in 1907 Jeonghwa Memorial Hall, Yongmunsan Sangwonsa Mt. Bukhan
after King Gojong Bronze Bell (National Treasure No. 32), pagodas
was dethroned. The and stone towers in this temple.
Mt. Bukhan is a
palace houses many
beautiful Western-
unique natural park in Ganghwa Island
the city and became
style buildings, such Korean Folk Village
the 15th National
as Seokjojeon. Ganghwado is a
Park in Korea. It is
historical region
This famous tourist famous for natural
bordering the Yellow
site has recreated the beauty and cultural heritage like temples. Many
Korea House Korean folk lifestyle, people visit for climbing and relaxing. It is also
Sea, where traces
of war against the including shamanist easy to access by car, subway, or bus from the
Mongol tribe during
Having been modeled after Jagyeongjeon in religions and the metropolitan areas. More than 5 million people
the Goryeo Dynasty still remain. Located about
Gyeongbokgung Palace, Korea House is elegant annual customs of visit every year, setting the record as the most
50 kilometers from Seoul, this tourist site offers
and beautiful, with a tastefully designed garden the late Joseon Dynasty. Tourists can experience the crowded national park in the world.
relaxation and activity with an enchanting sunset,
in the hanok (traditional house). Korea House traditional life and culture of Korea.
lapping blue waves, and beautiful coastal scenery.

192 Living Environment in Korea 193

IV. Foreign Direct Investment in Korea

Hangang (River) Yeouido Park Lotte World and the IMAX Theater all within its 3 basement Iron Triangle Battlefield
levels and 60 above ground levels. The panoramic
H a n g a n g Ye o u i d o T h e I r o n Tr i a n g l e
city view from the Observation Platform is an
Park is well-preserved Lotte World, a joyful enchanting experience. Battlefield is the
naturally. and enchanting world area that connects
A group of migratory also known as ”a city Gimhwa, Pyeonggang
birds visit here in the within a city,” has and Cheorwon.
winter. Yunjungno, the
Golden Gate Casino This area had the
museums, hotels, and
road to the National Assembly running along the the world’s biggest heaviest casualties during the Korean War with the
Hangang River, is crowded with people during the indoor theme park consisting of Adventureland, Golden Gate Casino Baekmagoji Battle and the Oseongsan Battle. The
flower festival in the middle of April. People come Magic Island and Folk Museum-all in one place. offers state-of-the- Iron Triangle Battlefield was the headquarters and
out with their families to enjoy spring blossoms. The roof is covered with glass, so there is no art facilities with frontline of the North Korean Army.
worry about outside weather. Magic Island, courteous dealers
the first island park in Korea, is connected to in its dynamic and
Olympic Park Adventureland by monorail and an arched bridge, fun atmosphere. In Samcheok Hwanseongul modeled after villages in fairy tales. addition to the games, K1 and racing girls will be
ready to welcome guests.
Ol ympic Park was The beauty of stalagmites
Golden Gate Casino offers non-stop-action
built to commemorate and stalactites forming
the 1986 Asian Everland throughout the year with its Las Vegas-Style
premier gaming establishment for foreigners only. rows inside Asia’s largest
Games and the 1988 cave is a marvelous
It operates 24 hours a day and 7 days a week.
Seoul Olympics. sight.
Only minutes away from Incheon International
It has 6 gymnasiums
Airport, Golden Gate Casino at Hyatt Regency
for cycling, weight lifting, fencing, gymnastics,
Incheon will be a new landmark casino of
and swimming, along with the 88 Nori Madang,
music fountain, etc. You can also appreciate
Northeast Asia. Seoraksan National Park
world-famous sculptures while walking about the
outdoor sculpture park. Many famous singers such Other Information Resources
as John Denver, Eric Clapton, and the heavy metal • Seoul:
band Metalica, have held concerts here. • Incheon:
• Gyeonggi-do:
Everland, opened in 1976, consists of Caribbean
Seoul Land Bay and Festival World. There are safaris and various spots for recreation in Festival World, and
flower festivals are held seasonally. Gangwon province
Seoul Land consists
Caribbean Bay is an indoor/outdoor waterpark
of 5 different themes
open all four seasons. Naksansa Temple
such as the World
Plaza, Samcheolli
Naksansa Temple is Also known as “Seolsan” and “Seolbongsan,” the
Land, Future Land,
Fantasy Land 63 Building located 4 km north of mountain was named Seorak because the snow
Naksan Beach, and would not melt for a long time and its rocks stayed
and Adventure Land. Its size makes it difficult
has a history of 1,300 white as snow.
to see in its entirety in one day. Here you can 63 Building, standing
years. It is a temple In November 1965, the Seorak Mountain
enjoy the comfort of fresh air coming from Mt. high on the bank of
that was built by Ui- district was designated as a Natural Monument
Cheonggyesan, see many types of buildings Seoul’s jewel Han River,
Sang, an ambassador of the 30th king of the Silla preservation area. Afterwards, in December 1973,
from all over the world in the world plaza, and contains an enormous
Period (57 BC~AD 935). Inside, there is the Seven it was designated as a park preservation area,
experience Korean traditional foods, antiques, old aquarium that has
Floor Stone Tower, Dongjong, Hongyaemun, and and in August 1982, as a Biosphere Preservation
markets, swings and other treasures. recreated a portion of
other cultural assets. District by UNESCO.
the ocean, Cineworld 63

194 Living Environment in Korea 195

IV. Foreign Direct Investment in Korea

Odaesan National Park Balwangsan, is the with a wall 3 in the central area,
first domestic ski kilometers in length residing within the
resort which opened and cultural assets beautiful Soknisan
Odaesan National in 1975. With an such as Jinnamnu, Nat’l Park. The sound
Park was designated average of 250 cm Ssangsujeong, of wind chimes and
as a national park of snow each year, Gongbungnu, the mountain breeze
in 1975. Odaesan you can enjoy skiing from November to April. It Yeongeunsa and more. It is invigorating to walk on break the desolation. A chanted sutra from a
was named after the is 215km from Seoul, and with the construction natural trails where the beautiful scenery gradually Buddhist temple combine for a state of spiritual
following 5 plateaus: of a four-lane highway, the travel time has been transforms year round according to the season. perfection. In Beopjusa, there are mountain cherry
Manwoldae, Jangryeondae, Girindae, Sangsamdae shortened to two hours. When the ski season blossoms in the spring, pine groves in the summer
and Jigongdae. ends, you can enjoy golf from April to November and maple trees with red foliage in the autumn.
Featuring its 1563 meter-high Birobong Peak, as well. Gungnamji
Odaesan spreads southwest with Mt. Sodaesan,
Horyeong Peak and Mt. Sogyebangsan.
Gapsa (Temple)
Gyeongpodae Beach Central Korea Gapsa temple is located in Gyeryongsan Mountain (Chungcheong Province) National Park, about 19km from Gongju-si. It was
established by the monk Adohwasang in 420,
A large pavilion with Seosan Maae Samjon Bulsang during the Baekje period (234-678), and is famous
a handlebar-shaped for having numerous cultural treasures. Once you
roof overlooks the pass the parking lot, you come to a market area,
crystal clear waters Smiling mysteriously the ticketing booth, and then pass through Iljumun,
of Gyeongpoho It is a well-known fact that Gungnamji is the oldest
with a perpetually the main gate. From the parking lot to the Gapsa
Lake. You can enjoy man-made pond in Korea. A pavilion is in the
peaceful expression, temple is less than 2km, but the road passes a
a grand sunrise over the East Sea, sunset over middle of the pond, and an elevated bridge was
it is a stone image of famous area known as Ori forest.
Daegwallyeong and the beauty of a moonlit night. built over the water. Tourists can enjoy a romantic
Buddha engraved on
view of willows surrounding the pond.
a rock.
Maae Samjon Bulsang is characterized by various
Kangwon Land Casino expressions from the changing angles of sunlight.
Independence Hall of Korea
With 30 game tables and 500 slot machines, the Sudeoksa (Temple) Independence Hall
casino delivers lucky ambience. has an outdoor
It is scheduled to expand to 80 game tables and
pavilion and seven
1,600 slot machines, and will be reborn as Asia’s Sudeoksa is a
standing exhibitions
best Las Vegas-style Buddhist temple with
incorporated into
casino with hotels, picturesque scenery
the 4.7 million-
cultural events, theme in harmony with the
parks, recreation mountains and the
square-yard complex, with displays of historical Songsan-ri Tumuli (Burial Mounds
achievements of Koreans who have fought off
areas and resting sea with clean and
centuries of aggressions. and Tomb of King Muryeong)
facilities. invigorating water running through the valleys.
The Songsan-ri Burial Mounds and Tomb of King
Muryeong (reign

Yongpyong Resort Gongju Gongsanseong Beopjusa (Temple) 462-523) contains representative relics of the Baekje period
Yongpyong Resort, located on the ridge of Mt. This is the most important and magnificent temple (234~678). The
This is an ancient palace of the Baekje Kingdom,

196 Living Environment in Korea 197

IV. Foreign Direct Investment in Korea

Songsan-ri Burial Mounds have graves of kings depart to follow the waterways of Chungjuho Lake. head. There are 15 summits on this mountain, of Daejeon EXPO Science Park
from the period when Baekje's capital was Gongju, The ferry travels to Oksunbong, Gudambong, and which Cheonhwangbong (845.1m) is the main,
and it is believed to contain 10 such graves. Only Manhakcheonbong Peaks, Choga Rock, Whale and others are Sambulbong, Sinseongbong, and
seven graves have been discovered so far. Rock, Hyeonhakbong, Onodong, Sinseonbong, Gwanembong peaks to name a few. This is a science park displaying exhibitions with
The biggest attraction of Songsan-ri Burial Mounds Gangseondae, Beodeulbong, Oseongam, themes on new scientific developments, including
is the wall painting drawn on the number 6 tomb Seolmabong, Jebibong, and Dumusan to reach its the universe, life, Internet communications and
-- it is the only art of its kind in the world, drawn final destination at Sindanyang Dock. energy. You will feel as if you are in a city of
from the way the bricks were laid to create the illusion while viewing the fun parks with themes
wall. on youth, romance
and love. It is a
relaxing park which
offers a variety of
Nakhwaam facilities for all kinds
Nakhwaam is the of performances.
site of a tragic
Danyang Eight Sights
legend where some There are eight areas
3,000 Baekje court designated as the
women leaped to most beautiful scenic
their death so as not
to be dishonored at the hands of their enemies
areas in Danyang, and
they are: Haseonam,
Southwestern Korea
Soknisan National Park
at the fall of the Baekje Kingdom. The hexagonal Jungseonam, Hwaeomsa (Temple)
Baekhwajeong is situated on top of the precipitous Sangseonam, Sainam, Gudambong, Oksunbong,
cliff, where visitors can enjoy a view of the Mt. Soknisan National Dodamsambong, and Seokmun. These areas were
Baengmagang river below. Park is composed visited many times by numerous scholars in the Situated at the
of Mt. Soknisan and Joseon Period (1392-1910), and they have many southwest corner
Hwayang, Seonyu, historically and culturally important relics. of Mt. Jirisan,
Gosu Cave and Ssanggok Hwaeomsa Temple is
Valleys. one of the ten most
This is a limestone
Situated in the middle of the Sobaeksanmaek Anmyeondo Nature Recreation famous temples in
Mountains, which is the southwest branch of the Korea. It was constructed during the Silla Era in
cave in Danyanggun, Forest 544 A.D. in the fifth year of King Jinheung’s reign,
Taebaeksanmaek Mountains, Mt. Soknisan is one
and is designated as but was burnt down during a Japanese Invasion,
of Korea’s most beautiful sites.The sharp granite
a natural monument. Jeongyujaeran, in 1592. It was rebuilt during the
peaks of Mt. Songnisan and the deep valleys Anmyeondo Nature
The cave is 1,300 Joseon Period, including the restoration of the
of sedimentary rocks make magnificent scenic Recreation Forest is
meters deep, large, temple’s central shrine, Daeungjeon. The path to
areas. Therefore, Mt. Songnisan is also called Mt. located at the center
and the inside is famous for its beauty. The name Hwaeomsa lies along a beautiful valley named
Sogeumgangsan (which means ‘small version of of Anmyeondo Island,
Gosu comes from the fact that in the past, the after the temple.
Mt. Geumgangsan’). the sixth largest
area was filled with thickets of very tall grass.
island in Korea. It
When discovered, rough stone instruments were
was originally a waterway, built during the Joseon
excavated at the cave entrance, which revealed
that this area was home to prehistoric people. Gyeryongsan National Park Period (1392-1911) to help with transporting Mt. Maisan Provincial Park
ships, but eventually became an artificial island. One of the must-see events at Anmyeondo Island
Gyeryongsan National Park stretches across Mt. Maisan Provincial Park is located in Jinangun,
is the sunset. Kkotji beach's sunset is known as
Chungjuho Lake Daejeon, Kwangju, and Nonsan districts. This the best in all of the west coast, where the blue
magnificent mountain is 845.1m above sea level During the Silla
Chungjuho Lake is a multi-purpose lake made from sea, the recreation forest, and the sunset all create
and was made a national park in 1968. Dynasty, it was called
damming a river. It is clean, and the largest lake an amazing view.
Gyeryongsan's name comes from the fact that Seodasan, during
in Korea. At the Chungju Dam Ferry Dock, ferries the Goryeo Dynasty,
the ridgeline looks like the top of a chicken

198 Living Environment in Korea 199

IV. Foreign Direct Investment in Korea

Yongchulsan, and finally named Maisan during up of 250 smaller Tongdosa (Temple) made of granite.
the Joseon Dynasty. Maisan is called by different islands, and is famous Seokguram is known
names depending on the season because the because a dry section to have been built
mountain reveals a variety of colors and sceneries. of land appears to Tongdosa is the most along with Bulguksa
rise from the middle important temple of Temple.
of the sea near the the 15 parishes in According to the
Korean Buddhism
Dadohae Maritime National Park end of February and middle of June in the lunar
J o g y e O r d e r. T h i s
historical text, the
calendar. Because this phenomenon resembles the Samgukyusa of the temple, one of the
parting of the sea in the Old Testament’s Book of Goryeo Dynasty, Kim
Dadohae Maritime Exodus, the event is known as “Moses’ Miracle.” three largest temples in Korea, was built in 646, Dae-Seong built
National Park covers the 15th year of Queen Seondeok’s reign over Bulguksa for the
the areas of Sinan- the Silla Kingdom, when monk Jajang yulsa came parents of his present
gun, Jindo-gun, and back to Korea from Tang Dynasty of China with
Goheung-gun of
Muju Ski Resort Buddha bones and robe.
life, and Seokguram
for the parents of his
Yeosu-si and Wando-
former life.
gun in Jeollanam-do. As a recreation area
It became Korea's 14th National Park on Dec. 23, opened in 1990 in
Deokyusan National
Beomeosa (Temple)
1981, and with an area of 2,344.91 km², it is the
largest one in Korea, encompassing many small Park, the Muju Ski Cheomseongdae Observatory
and large islands and various rock formations. Resort is an area of Beomeosa is located at the base of a famous
In the park, the blue sky and ocean blend leisure and recreation mountain in Busan, Mt.Geumjeongsan. The temple This is the oldest
harmoniously with the white sandy beaches, and with ski hills and winter sports facilities. There was built about 1,300 years ago by the monk existing astronomical
the thick surrounding pine forests add to the lovely are 23 slopes with ski jumps and Nordic courses. Ui Sang. The original Beomeosa Temple building observatory in Asia.
atmosphere. The Silk Road is the longest run nationwide with was lost during the Imjinwar (Japanese invasion Constructed during
a length of 6.2km, and the level of difficulty is just of Korea in 1592) but was renovated in 1713, the reign of Queen
right for beginners and intermediate-level skiers. and has remained as it is today. The temple’s Seondeok (632-647),
Hongdo Island The steepest course within Korea, the Raider daeungjeon, or main shrine, is one of the most it was used for observing the stars in order to
Course is located at the peak. Muju Resort also delicate and luxurious architectural examples of forecast the weather. This stone structure is a
Hongdo Island is
hosted the 1997 Winter Universiad. the Joseon Dynasty (1392-1910). beautiful combination of straight lines and curves,
located 115km
and was designated as National Treasure No. 31
southwest of Mokpo
on December 20th, 1962.
Harbor, and is actually
composed of about
20 separate islands.
It gets its name from its unusual reddish-brown Southeastern Korea Juwangsan National Park
When the sun sets over the island, the whole Seokbinggo (Ice Store House) Mt. Juwangsan (721
area takes on a reddish glow. The shore here is Seokbinggo means m) is the smallest of
dotted with cliffs bearing diverse rock formations. a freezer made the domestic national
Hongdo, along with its blue ocean and surrounding of rocks. It is an parks.
green forests, remains the most spectacular sight ancient refrigerator Mt. Juwangsan is
in the South Sea. found only in Korea. not so steep, making
It is located in Seokguram Grotto (Mt. Tohamsan) it a great place to walk and enjoy the wonderful
Gyeongju, the ancient capital of the Silla Era (BC scenery. There is a legend that King Juwon of Silla
The “Moses’ Miracle” of Jindo 57-AD 935). The appearance of this wonderful (57 B.C.~A.D. 935) lived on this mountain after
The official name of Seokguram, National Treasure
artifact is humble and simple, but you will not be turning Silla over to Goryeo. This is where it got its No. 24, is Seokguram Seokgul.
disappointed at the entrance of the freezer for you name 'Juwang'.
Jindo Island is the third-largest island in Korea, Designated as a World Cultural Heritage Site by
can feel the cold from inside the structure.
next to Jejudo and Geojedo islands. It is made UNESCO in 1995, it is an artificial stone temple

200 Living Environment in Korea 201

IV. Foreign Direct Investment in Korea

Hallyeo Maritime National Park Since the Russo-Japanese War of 1905, Japan
Jeju Island Teddy Bear Museum
has continuously declared their dominion over
the islets, which has led to diplomatic problems Manjanggul The Jeju Teddy Bear
Halleyo Maritime National Park was designated as between South Korea and Japan.
a National Park in 1968. It is composed of parts Museum contains
Presently, South Korea exerts her governance over
of the southern coast and Namhaedo Island and the island with security guards on Dokdo Island. Manjanggul is a cave that two galleries, a
Geojedo Island on the southern coast. Hallyeo Houses were built on the rocks and a small harbor resembles a mysterious Greek museum gift shop,
Maritime National Park is famous for an incredibly as well. palace, with stalactites of and a museum cafe.
beautiful sunrise and sunset on Haegeumgang various shapes and sizes. You can enjoy a view
of Geojedo; Bijindo Island is famous for its native of Jungmun Beach from the museum’s outdoor
plant, the Palsonyi Tree. garden.
Oedo-Botania Sangumburi
Oedo-Botania is a Sangumburi means ‘a
hole in the mountain.’
Seongsan Ilchulbong Peak
marine botanical
garden located in More than 420 kinds Seongsan Ilchulbong Peak is a stone peak
Hallyeo Maritime of temperate plants with exotic scenery and is known as the best
National Park, which grow in clusters. place to see the sunrise in Korea. The 99 peaks
has a beautiful view In the fall, silver surrounding the crater is considered one of the 10
of the crystal blue South Sea and surrounding eulalia flowers grow thickly in waves, creating a most beautiful sights on Jeju lsland.
landscape. It is 4 km away from Geojedo Island. In breathtaking scene.
April, the island is covered with plethora of flowers.
Ulleungdo Island The Venus Garden displays twelve sculptures and
a western-style garden. At Paradise Lounge, one
can enjoy the sunshine and the sea while drinking
This is a pentagon- beverages.
shaped island located
92 km away from
Dokdo. The island is
Busan Aquarium
a mountain island
made from volcanic
eruptions. Its highest peak is called Seonginbong The Busan Aquarium
Peak, and there is a village along the coastline on contains over
a slope. On the north side is a caldera crater which 35,000 kinds of fish,
collapsed to create the Nari Basin and the Albong algae, reptiles, and
Basin. amphibians.
This state-of-the-art
facility is one of Korea’s top aquariums, covering
Dokdo Island an area of 36,000m² and with three underground
levels as well as outdoor park. On the first
underground level you can find an undersea
Dokdo is an isolated simulator, a souvenir shop, and several places to
island in the eastern eat, while on underground levels two and three
reaches of the you can find the aquarium displays which make
nation's territory. It the Busan Aquarium a must-see destination.
is composed of two
main islets, Dongdo
(East Island) and Seodo (West Island). Seongsan Ilchulbong Peak

202 Living Environment in Korea 203

Major Logistics Companies in Korea
Foreign Organizations in Korea
Logistics Related Organizations in Korea
Korean Embassies
KITA (Korea International Trade Association)
KOTRA (Korea Trade-Investment Promotion Agency)

Major Logistics Companies in Korea


Hanjin Shipping Shipping

STX Pan Ocean Shipping
Hyundai Merchant Marine Shipping http://www.hmm²
Glovis 2PL
Korea Line Corporation Shipping
SK Shipping Shipping
EUKOR Car Carriers Shipping
Korea Express 3PL
Samsung Electronics Logitech 2PL
Samsun Logix Shipping
Pantos Logistics 2PL
Hanjin 3PL
Daeyang Shipping Shipping
Hyundai Logistics 3PL
Heunga-A Shipping Shipping
Sinokor Merchant Marine Shipping
Hi Logistics 2PL
Railway Transportation Division Trucking
Hansol CSN 3PL
KCTC International 3PL
Dongwon Industry 3PL
Joyang Logistics International 3PL
Sebang 3PL

206 Major Logistics Companies in Korea 207



Foregin Organizations in Korea
Sebang Express 3PL
Youngjin Enterprise Stevedoring
Yoosung TNS Trucking
CK line Shipping
Kukbo Transportation Trucking Algeria 82-2-794-5034~5 Germany 82-2-748-4114

KMTC Shipping Apostolic Nunciature 82-2-736-5725 Ghana 82-2-3785-1427

KMTC Air-Sea Service Forwarder Argentina 82-2-797-0636 Greece 82-2-729-1400
KIFT 3PL Australia 82-2-2003-0100 Guatemala 82-2-771-7582
Maxpeed 3PL Austria 82-2-732-9071 Honduras 82-2-738-8402~3
Han Express Forwarder Bangladesh 82-2-796-4056~7 Hungary 82-2-792-2105
Sunjin Shipping Forwarder Belarus 82-2-2237-8171/3 India 82-2-798-4257, 4268, 0962
haewoo GLS Forwarder Belgium 82-2-749-0381/4 Indonesia 82-2-783-5675/7, 5371~2
Korea Logistics Trucking Bolivia 82-2-998-0884 Iran 82-2-793-7751~2
Samik Logistics Trucking Brazil 82-2-738-4970 Ireland 82-2-774-6455
Digital Partner In Logistics Warehousing Brunei 82-2-790-1078 Israel 82-2-3210-8500
Assist Korea Warehousing Bulgaria 82-2-749-0381/4 Italy 82-2-796-0491/5
Taiyoung Shipping Shipping Cambodia 82-2-3785-1041 Japan 82-2-2170-5200
Union Transport Trucking Canada 82-2-3783-6000 Kazakhstan 82-2-394-9716, 391-8906
Nonghyup Logis Forwarder Chile 82-2-779-2610 Kuwait 82-2-749-3688
Dongjin Shipping Shipping China 82-2-738-1038 Laos 82-2-796-1713~4
Korea Pallet Pool Lease Colombia 82-2-720-1369/1 Lebanon 82-2-794-6482/4
Korea Container Pool Lease
Congo 82-2-722-7958 Libya 82-2-797-6001/3
Korea Logis Pool Lease
Costa Rica 82-2-707-9249 Malaysia 82-2-795-9203
Yongma Logis 3PL
Cote d’ lvoire 82-2-3785-0561~2 Mexico 82-2-798-1694
Lotte Logistics 2PL
Czech Republic 82-2-720-6453 Mongolia 82-2-798-3464
Denmark 82-2-795-4187 Morocco 82-2-793-6249
Dominican Republic 82-2-756-3513 Myanmar 82-2-790-3814~6
Ecuador 82-2-739-2401~2 Netherlands 82-2-737-9514
Egypt 82-2-749-0787~9 New Zealand 82-2-3701-7700
El Salvador 82-2-753-3432~3 Nigeria 82-2-797-2370
Finland 82-2-732-6737, 6223 Norway 82-2-795-6850
France 82-2-3149-4300 Oman 82-2-790-2431~2
Gabon 82-2-793-9575~6 Pakistan 82-2-796-8252~3

208 Foreign Organizations in Korea 209



Panama 82-2-734-8610~2 Sri Lanka 82-2-735-2966~7 NAME WEBSITE TEL
Paraguay 82-2-792-8335/1174 Sudan 82-2-793-8692
Australian Tourist Commission 82-2-399-6506
Peru 82-2-757-1735~7 Sweden 82-2-3703-3700
BUREAU VERITAS Korea 82-2-555-8924
Philippines 82-2-796-7387 Switzerland 82-2-739-9511/4 U.S. Agricultural Trad office 82-2-397-4188
Poland 82-2-723-9681 Thailand 82-2-795-3098 Det Norske Veritas(DNV) 82-2-723-7593/4
Portugal 82-2-3675-2251~3 Tunisia 82-2-790-4334~5 Food and Agriculture Organization of The United Nations 82-2-584-3156
Qatar 82-2-798-2444~6 Turkey 82-2-794-0255 Japan National Tourist Organization 82-2-777-8542
Republic of South Africa 82-2-792-4855 U.A.E 82-2-790-3235/7 Nippon Kaiji Kyokai(NK) 82-2-776-3625
Romania 82-2-797-4924 Ukraine 82-2-790-5696 JETRO Seoul Center 82-2-739-8657
Russian Federation 82-2-318-2116~8 United Kingdom 82-2-3210-5500 Korean-American Educational Commission 82-2-3275-4000
Saudi Arabia 82-2-739-0631/4 USA 82-2-397-4114 Korea Arab Friendship Society 82-2-730-5897
Singapore 82-2-774-2464~7 Uzbekistan 82-2-574-6554 Korean Committee for UNICEF 82-2-735-2315
Slovakia 82-2-794-3981, 5420 Venezuela 82-2-732-1546~7 Korea Foreign Company Association (KOFA) 82-2-3462-0505
Spain 82-2-794-3581~2 Vietnam 82-2-739-2065 Korea-Japan Cooperation Council 82-2-755-0745
Korean National Commission for UNESCO 82-2-755-1105
Chinese Resident AssociationSeoul Korea 82-2-776-8416
Lions Club 82-2-897-8001
CHAMBERS OF COMMERCE Llyod’s Register 82-2-734-8970
NAME WEBSITE TEL Macao Tourist office 82-2-778-4402

American Chamber of Commerce in Korea 82-2-564-2040 Rotary International 82-2-738-3077

The EU Chamber of Commerce in Korea 82-2-725-9880 Seoul Forum for International Affairs 82-2-755-4568
The American Bureau of Shipping (ABS) 82-2-780-8065
Seoul Japan Club 82-2-739-6962
The Asia Foundation 82-2-732-2044
French Korean Chamber of Commerce and Industry 82-2-2268-9505~7
The Japan Chamber of Commerce and Industry 82-2-3210-2411
Korean German Chamber of Commerce & Industry 82-2-3780-4600
The World Bank Group 82-2-399-0900
The British Chamber of Commerce in Korea 82-2-720-9406~7
Tourism Authority of Thailand Seoul Office 82-2-779-5417
The Canadian Chamber of Commerce in Korea 82-2-554-0245~6
Tourism Malaysia 82-2-779-4422
The China Council for the Promotion of International Trade 82-2-551-4611~3
U.S. Agricultural Trade Office 82-2-397-4188
Korea Swedish Association 82-2-3408-3305
U.S. Wheat Associates, Inc. (USW) 82-2-397-4188
Australian Newzealand chamber of Commerce in Korea 82-2-790-3308
UNIDO IPSO Seoul (UNIDO) 82-2-747-8191
U.S. Commercial Service - Korea's web site 82-2-397-4535
United Nations Development Programme (UNDP) 82-2-790-9562
United Nations Enviroment Programme (UNEP) 82-2-720-1011
Korea Chamber of Commerce & Industry (KCCI) 82-2-6050-3114
Virginia Economic Development Partnership 82-2-739-6251
International Chamber of Commerce
World Health Organization (WHO) 82-2-503-7533

210 Foreign Organizations in Korea 211


Logistics Related Organizations in Korea


Ministry of Land, Transport and Maritime Affairs

Ministry of Knowledge Economy
Free Economy Zone Planning Office
Korea Customs Service
Busan Port Authority
Korea Container Terminal Authority
Incheon Port Authority
Gyeonggi Pyeongtaek Port Corporation
Ulsan Port Authority
Incheon International Airport Corporation
Korea Airports Corporation
Korea Railroad
Korea Rail Network Authority
Korea Highway Corporation
Busan Jinhae Free Economy Zone Authority
Incheon Free Economy Zone Authority
Gwangyang Bay Area Free Economy Zone Authority Your success is our commitment.
Yellow Sea Free Economy Zone Authority Korea invites you to take advantage of unparalleled business opportunities in the region.
Boasting the world's most highly-developed IT infrastructure coupled with a world-class
Saemangeum Gunsan Free Economy Zone Authority airport and ultra-modern ports, Korea is the ideal place to base your logistics operation
Daegu Gyeongbuk Free Economy Zone Authority to expand into Northeast Asian markets.

Korea Maritime Institute

The Korea Transport Institute
Korea Research Institute For Human Settlements
The Federation of Korean Industries
Korea Federation of Small and Medium Business
Korea Employers Federation
The Korea Chamber of Commerce & Industry
Korea International Trade Association
Korea Trade-Investment Promotion Agency

212 213


Czech 420-234-090-411 Slavickova 5, 160 00 Praha 6-Bubenec, Czech

NATION TEL ADDRESS Denmark 45-3946-0400 Svanemollevej 104, 2900 Hellerup, Denmark

Afghanistan 93-20-210-2481 Wazir Akbar Khan, Street No. 10, House No.34, Kabul, Afghanistan East Timor 670-332-1635 Avenida de Portugal, Motael, Dili, East Timmor

Algerie 213-21-79-3400~2 39, Avenue Mohamed Khoudi, El Biar. Alger, Algerie Ecuador 593-2-2970-625~8 Av. Naciones Unidas y Av. Repulica de El Salvador EDIF.
Citiplaza Piso 8, Ecuador
Argentina 54-11-4802-8062 Av. Del Libertador 2395 Cap. Fed. (1425) Bs. As. Argentina
Egypt 20-2-3761-1234~7 3 Boulos Hanna Street, Dokki, Cairo, Arab Republic of Egypt
Australia 61-2-6270-4100 113 Empire Circuit, Yarralumla ACT 2600, Australia
El Salvador 503-2263-9145 5a. Calle Poniente #3970, entre 75 y 77 Av. Norte, Col. Escalon,
61-2-9210-0200 St. James Centre Level 13, 111 Elizabeth St., Sydney NSW 2000, Australia San Salvador, El Salvador

Austria 43-1-478-1991 Gregor-Mendel Strasse 25 A-1180 Vienna, Austria Ethiopia 251-11-3-728111~4 P.O.Box 2047, Addis Ababa, Ethiopia

Bangladesh 8802-881-2088~90 4 Madani Avenue, Baridhara, Dhaka-1212, Bangladesh Fiji 679-330-0977 8th Fl., Vanua House, Victoria Parade, Suva, Fiji

Belgium and EU 32-2-675-5777 Chaussese de la Hulpe175, 1170 Brussels, Belgium Finland 358-9-251-5000 Fabianinkatu 8A, 00130 Helsinki, Finland

Brazil 55-61-321-2500 Sen Av. Das Nacoes Lote 14, Brasilia-DF, Brazil CEP:70436-900 France 33-1-4753-0101 125 rue de Grenelle, 75007 Paris, France

55-11-3141-1278 Av. Paulista 37, 9 andar Cerqueira Cesar, Sao Paulo - SP Brasil Gabon 241-73-4000, 4168 B.P. 2620, Libreville, Gabon

Brunei 673-233-0248~50 No.17, Simpang 462 Kg. Sg. Hanching Baru, Jln Muara, B.S.B BC 2115 Germany 49-30-260650 Stülerstr. 10, 10787 Berlin

Bulgaria 359-2-971-2181 World Trade Center, 7A Fl., 36 Dragan Tsankov Bulvd., 1040 sofia, Bulgaria 49-69-9567520 Lyoner Str. 34, 60528 Frankfurt am Main

Cambodia 855-23-211-900/3 #50-52, St. No. 214, Phnom Penh, P.O box 2433, Kingdom of Cambodia 49228-943790 Bonn-Mittelstr. 43, 53175 Bonn, Germany

Chile 56-2-228-4214 Av. Alcantara 74, Las Condes, Santiago, Chile 49-40-650677600 Kaiser-Wilhelm-Str. 9 (3.OG) 20355 Hamburg

China 86-10-8531-0700 No.20 DongfangdongLu Chaoyang District, Beijing, China, 100600 Ghana 233-21-77-6157 P.O.Box Gp 13700, No.3 Abokobi Rd. East Cantoment Accra, Ghana

86-21-6295-5000 60 Wan Shan Road, Shanghai, China, 200336 Greece 30-210-698-4080/2 115 27, 2 Mesogion Ave, Athens Tower A building 19th Fl. Athens, Greece

86-532-8897-6001 No.101 Hong Kong East Rd., Qingdao, China, 266061 Guatemala 502-2382-4051~4 5 Avenida 5-55 Zona 14, Edificio Europlaza, Torre 3, Nivel 7,
Ciudad de Guatemala, Guatemala C.A
86-24-2385-3388 No. 37, South 13 Latitude Road, Heping District, Shenyang,
Liaoning, China Hong Kong 852-2529-4141 5/6th Fl., Far East Finance Center, 16 Harcourt Rd., Hong Kong

86-20-3887-0555 18Fl. West Tower, Guangzhou Intl. Cemmercial Center, Tiyu Road Hungary 36-1-462-3080 1062 BP Andrassy ut 109, Budapest, Hungary
East 122 Tianhe District, Guangzhou, China, 51620
India 91-11-2688-5412 New Delhi-9 Chandragupta Marg, Chanakyapuri Extension, New
Colombia 571-616-7200 Calle 94 No. 9-39, Bogota, Colombia Delhi-110021, India

Costa Rica 506-220-3141 Apartado Postal 838-1007, Carretera a Pavas, del Restaurante 91-22-2388-6743~5 Kanchanjunga Bldg., 9th Fl., 72, Peddar Road, Mumbai 400026, INDIA

Los Antojitos 75 metros al norte, Rohrmoser, San Jose, Costa Rica Indonesia 62-21-520-1915 Kav. 57, Jalan Gatot Subroto, Jakarta, Selatan, Indonesia

Cote D'lvoire 225-2248-6701/3 01 BP 3950 Abidjan 01 Cocody Ambassade, Rue Monseigneur Iran 98-21-8805-4900~4 No. 18, West Daneshvar St, Sheikhbahai Ave, Vanak Sq, Tehran, Iran
Kouassi, Lot 100, Villa 33, Abidjan Cote d'Ivoire
Iraq 964-77-0725-2006 M915 St.10 H11 Babilon Street, Al-Jadria, Baghdad, Iraq

214 Major logistics company in Korea 215



Ireland 353-1-660-8800 15 Clyde Rd., Ballsbridge, Dublin 4, Ireland Nepal 977-1-427-0172 P.O.Box 1058 Ravi bhawan Tahachal, Kathmandu, Nepal

Israel 972-9-951-0318/22 4 Hasadnaot St., Herzliya Pituach 46728 Netherlands 31-70-358-6076 Verengde Tolweg 8, 2517 JV, The Hague, The Netherlands

Italy 39-06-808-8769 Via Barnaba Oriani 30, 00197 Roma, Italy New Zealand 64-4-473-9073/4 11th Fl., ASB Bank Tower, 2 Hunter Street, Wellington 6011, New Zealand

Japan 81-3-3452-7611/9 Tokyo-1-2-5, Minami-Azabu, Minato-ku, Tokyo, Japan Nigeria 234-9-461-2701 No. 9 Ovia Crescent Off Pope John Paul II Street Maitama, POBox
6870, Abuja, Federal Republic of Nigeria
81-78-221-4853/5 Kobe-2-21-5 Nakayamate-Dori, Chuo-ku, Kobe, Japan
Norway 47-22-547090 Inkognitogaten 3, 0244 Oslo, Norway
81-11-218-0288 1-4, Nishi 12, Kita2, Chuo-ku, Sapporo, Hokkaido, Japan
Oman 968-24691490~2 Way No. 3023, Bldg., No. 1921, Shati Al Qurm Muscat, Oman
81-6-6213-1401/6 Osaka-2-3-4 Nishi-shinsaibashi, Chuo-ku, Osaka, Japan
Pakistan 92-51-227-9380~1 slamabad-Block 13, Street 29, G-5/4, Diplomatic Enclave II,
81-82-543-5018/9 4F Wako Hiroshima 5-28, Hukuro-Machi, Nakaku, Hiroshima, Japan Islamabad, Pakistan

81-52-586-9221/3 Nagoya-1-9-12, Meieki Minami, Nakamura-ku, Nagoya, Japan 92-21-585-3950/1 101, 29th Street(Off. Khayaban-e-Mohafiz) Phase VI, DHA, Karachi, Pakistan

81-25-255-5555 Niigata-2 chome, 1-13, Hakusanura, Niigata, Japan Panama 507-264-8203, 8360 Calle 51 E, Ricardo Arias, Campo Alegre, Edificio Plaza P.B.,
Republica de Panama
81-45-621-4531/5 Yokohama-118, Yamatecho, Naka-ku, Yokohama, Japan
Papua 675-321-5822 4 Fl., Pacific MMI Bldg. Section 21, Allotments 2&3 Champion Parade
81-22-221-2751/5 1-4-3 Kamisugi, Aoba-Ku, Sendai, Japan St., Port New Guinea Moresby, Papua New Guinea

81-92-771-0461~3 Fukuoka- 1-1-3 Jigohama, chuo-ku, Fukuoka, Japan Paraguay 595-21-605-606 Av. Rep. Argentina 678 esq. Pacheco Asuncion

Jordan 962-6-593-0745/6 P.O.Box 3060, Amman 11181, Jordan Peru 51-1-476-0815 Av. Principal No. 190, Piso 7, Santa Catalina, La Victoria, Lima, Peru

Kazakhstan 7-7172-925-591~3 Kazakhstan, Astana, 010000, Office No.91, 92, 93 · Kaskad · Philippines 63-2-811-6139/44 10th Fl., The Pacific Star Bldg., Makati Av. Makati City 1226, the Philippines
business-centre, Kabanbai Batyr Av.6/1
Poland 48-22-559-2900 ul. Szwolezerow 6,00-464, Warsaw, Poland
Kenya 254-20-22220000 P.O.Box 30455-00100 GPO, Nairobi, Kenya T: 254-20-2220000
Portugal 351-21-793-7200 Av. Miguel Bombarda 36-7, Lisboa 1051-802, Portugal
Kuwait 965-2533-9601~3 Qurtoba Block 4, Street 1, Jaddah 3, House No.5, Kuwait
Qatar 974-4832238 P.O.Box 3727 West Bay, Diplomatic Area, Doha, Qatar
Lao 856-21-352-031/3 Lao-Thai Friendship Rd., Ban Watnak, Sisattanak District, Laos
Romania 40-21-230-7198 Blvd. Mircea Eliade Nr. 14, Sector 1, Bucharest, Romania
Lebanon 961-5-953167~9 Diplomat Bld. 2F, Presidential Palace Street, Baabda, Lebanon
Russia 7-495-783-2727 Moscow-St. Plyushchikha56, Building 1, Moscow, Russia
Libya 218-21-483-1322/3 P.O.Box 4781, Abounawas Area, Gargaresh St., Tripoli, Libya
7-4232-40-2222 Vladivostok-Pologaya St. 19, 690091 Vladivostok, Russia
Malaysia 60-3-4251-2336 Lot No. 9&11, Jalan Nipah, Off Jalan Ampang 55000 Kuala Lumpur, Malaysia
Saudi Arabia 966-1-488-2211 Diplomatic Quarter, P.O.Box 94399, Riyadh11693
Mexico 52-55-5202-9866 Lope de Armendariz No. 110, Col. Lomas de Virreyes C.P. 11000, Mexico
Senegal 221-33 824-0672 27, route de la Corniche Ouest x rue David Diop, Fann Residence,
Dominica 1-809-482-6505 Calle. Maniel No.13, Los Cacicazgos, Santo Domingo, Dominican Republic B.P. 5850 Dakar Fann, Dakar, Senegal

Mongolia 976-11-32-1548 P.O.Box 1039, No. 10, Olympic St. Sukhbaatar District, Ulaanbaatar, Mongolia Serbia 381-11-3674-225~7 Uzicka 32, 11000 Belgrade, Serbia and Montenegro
and Montenegro
Morocco 212-37-75-1767 41, Av. Mehdi Ben Barka, Souissi, Rabat, Morocco
Singapore 65-6256-1188 47 Scotts Rd., #08-00 Goldbell Tower, Singapore 228233
Myanmar 95-1-527-142/4 No. 97, University Avenue Road, Bahan Township, P.O.Box 1408,
Yangon, Union of Myanmar

216 Korean Embassies 217



South Africa 27-12-460-2508 Greenpark Estates #3, 27 George Storrar Dirve, Groenkloof, 1-213-385-9300 3243 Wilshire Blvd., Los Angeles, CA 90010
Pretoria 0181, South Africa
1-671-647-6488 125 C Tun Jose Camacho St., Tamuning, Guam 96913
Spain 34-91-353-2000 Madrid- C/Gonzalez Amigo 15, 28033 Madrid, Spain
1-646-674-6000 460 Park Ave. (57th St.) 6th Fl. New York, NY 10022
34-928-23-0499 Las Palmas-Luis Doreste silva, 60-1, 35004, Las Palmas de G. Canaria, Spain
1-617- 641-2830 One Gateway Center 2nd Fl. Newton, Boston, MA 02458
Srilanka 94-11-2699036/8 No. 98, Dharmapala Mawatha, Colombo 7, Sri Lanka
1-312-822-9485 NBC Tower Suite 2700, 455 North Cityfront Plaza Drive, Chicago,
Sudan 249-1-8358-0031/2 House No.55, Al-Jazira Street 56, Khartoum², P.O.Box 2414, Illinois 60611
Khartoum, Sudan
Uzebekistan 998-71-252-3151~3 700029 Afrociab 7, Tashkent, Uzbekistan
Sweden 46-8-5458-9400 Laboratoriegatan 10, 102 53 Stockholm, Sweden
Venezuela 58-212-954-1270 Av. Fransisco de Miranda, Centro Lido, Torre B, Piso 9,
Swizerland 41-31-356-2444 Bern-Kalcheggweg 38,P.O Box 28,3006 Bern Switzerland Ofic. 91-92-B, El Rosal, Caracas, Venezuela

41-22-748-0000 Geneva-1 Avenue de l'Ariana Case Postale 42, 1211 Geneva, Switzerland Viet Nam 84-4-3831-5110~6 4th Fl., Dae Ha Business Center,360 Kim Ma St., Ba Dinh District,
Hanoi, Vietnam
Taiwan 886-2-2758-8320/5 Rm. 1506, No. 333, Sec. 1, Kee-Lung Rd., Taipei, Taiwan
84-8-3824-8531~4 Hochimin City- 107 Nguyen Du St., District 1, Viet Nam
Tanzania 255-22-2668788 Plot No. 97, Msese Road, Kingsway, Kinondoni P.O.Box 1154,
Dar es Salaam, Tanzania Zimbabwe 263-4-756541/4 3rd Fl., Redbridge, Eastgate Bldgl, 3rd Street/Rober Mugabe Rd.,
P.O.Box 4970 Harare, Zimbabwe
Thailand 66-2-247-7537/41 23 Thaim-Ruammit Rd., Ratchadapisek, Hway-kwang,
Bankok 10320, Thailand

Tunisia 216-71-799-905 16 Rue Caracalla, Notre-Dame 1082 B.P. 297, Tunis, Tunisie

Turky 90-312-468-4822 Alacam Sok No. 5, Cinnah Caddesi, Cankaya, Ankara 06690, Turkey

UAE 971-2-443-5337 P.O.Box 3270, Abu Dhabi, U.A.E.

Ukraine 38-044-246-3759/61 43, Volodymyrska St., 01034, Kyiv, Ukraine

U.K. 44-20-7227-5500 60 Buckingham Gate, London, SW 1E 6AJ, U.K.

Uruguay 598-2-628-9374/5 Av. Luis Alberto de Herrera 1248, Torre II, Piso 10, Montevideo, Uruguay

U.S.A. 1-202-939-5600 2450 Massachussettes Ave., N.W. Washington, D.C. 2008

(HQ of Korean Embassy in the United States)

1-404-522-1611 229 Peachtree St., Suite 500, International Tower, Atlanta,

GA 30303

1-415-921-2251/5 3500 Clay St., San Francisco, CA 94118

1-713-961-0186 1990 Post Oak Blvd., #1250, Houston, Texas 77056

1-206-441-1011 2033 6th Ave. #1125 Seattle, WA 98121

1-808-595-6109 2756 Pali Highway Honolulu, Hawaii 96817

1-646-674-6000 335 East 45th St., New York, NY 10017

218 Korean Embassies 219


KITA (website: KOTRA (website:

Korea International Trade Association Korea Trade-Investment Promotion Agency

Seoul 82-2-6000-5114 Fl.46, Trade Tower, Samseong-dong, Kangnam-gu, Seoul 82-2-3460-7114 13, Heolleungno, Seocho-gu, Seoul, Korea
Seoul Korea


Tokyo 81-3-5472-2641 Kamiyacho Mori Bldg. 2F 4-3-20, Toranomon, Guangzhou Los Angeles
Minato_Ku Tokyo, Japan
廣州市東山區環市東路339 廣東國際大廈 主樓 1010 4801 Wilshir Blvd. Los Angeles, CA 90010 U.S.A
Beijing 86-10-6505-2671/3 #1201, China World Trade Center No.1, JianCuoMen TEL: (86-20)8334-0052 FAX: (86-20)8335-1142 TEL: (1-323)954-9500 FAX: (1-323)954-1707
Wai Da Jie, Beijing 100004, China

Shanghai 86-21-6236-8286/7 #3201, New Town Center No.83, Lou Shan Guan Road,
Shanghai, 200336,China Nagoya Madrid
23Fl.,Nagoya Intl Bldg,47-1, Nagono1-Chome, Torre Europa, Paseo Castellana, 95, 10, 28046,
Singapore 65-6323-1161 79 Anson Road #10-01 Singapore 079906
Nakamura-Ku, Nagoya-Shi Madrid, Spain
Washington 1-202-828-9282~6 Suite 216, 1660 L Street, NW, Washington, DC 20036 TEL: 81-52-561-3936 FAX: 81-52-561-3945 TEL: (34)91 556 6241 FAX: (34)91 556 6868
New York 1-212-421-8804/6 460 Park Avenue, Suite 1101 New York NY, 10022 USA
Brussels 32-2-639-0990 Avenue Louise 165,1050 Brussels, Belgium New York Level 3, 468 St. Kilda Road, Melbourne, VIC 3004
460 Park Ave, New York. NY 10022 TEL: (61-3)9867-1988 FAX: (61-3)9867-2688
TEL: (1-212)826-0900 FAX: (1-212)888-4930

Rm 908, WTC, 12 Krasnopresnenskaya nab. Moscow,
3030 LBJ freeway Suite 1200, Dallas, TX 75234
123610, Russia
TEL: (1-972)243-9300 FAX: (1-972)243-9301
TEL: (7-495)258-1627 FAX: (7-495)258-1634

Tal 12 D-80331 Muenchen, Germany
TEL: (971-4) 332-7776 FAX: (971-4) 3291300
TEL: (49-89) 2424-2630 FAX: (49-89) 2424-2639

Via Larga 2 - 20122, Milano, Italy
2000 Town Center Suite 2850, Southfield, MI 48075, U.S.A.
TEL: (39-02)795813 FAX: (39-02)798235
TEL: (1-248) 355-4911 FAX: (1-248) 355-9002

Suite#1320, Cathdral Place, 925 West Georgia Street,
1st Floor, Brettenham House North, 12-13 Lancaster
Vancouver, BC, Canada, V6C 3L2
Place, London WC2E 7EN
TEL: (1-604) 683-1820 FAX: (1-604) 687-6249
TEL: +44 (0)20 7520 5300 FAX: +44 (0)20 7240 2367

220 KOTRA 221



Beijing Singapore
中國 北京市 朝陽區 宵云路 38號 7 Temasek Boulevard #13-02 Suntec Tower One
TEL: 86-10-6410-6162 FAX: 86-10-6505-2310 Singapore 038987 TEL: (65)6221-3055 FAX: (65)6223-5850
Boulevard du Roi Albert II 30, bte14 1000 Brussels
WTC Bldg. Strawinskylaan 767, 1077 XX Amsterdam,
TEL: (32-2) 203-2142 FAX: (32-2) 203-0751
The Netherlands
TEL: (31-20)673-0555 FAX: (31-20)673-6918
Mariahilferstrasse 77-79/1/3 1060 Wien, Austria Osaka
TEL: (43-1)586-3876 FAX: (43-1)586-3979
7th FL.,Sakaisuji-Honmachi Center B/D,1-6Honmachi
TEL: (81-6)6262-3831 FAX: (81-6)6262-4607
Room 3101,3110-3112, Shanghai Maxdo Center,
No.8 Xing Yi Rd Shanghai, China 200336 Washington
TEL: (86-21) 5108-8771 FAX: (86-21) 6219-6015
1225 Eye St. NW #920 Washington DC 20005
TEL: 1-202-857-7919 FAX: 1-202-857-7923 Taipei Helsinki 臺北市 基隆路 一段 333號 國貿大樓 2214室 Kauppiaankatu 3 B 11, 00160 Helsinki
Stockholm TEL: (886-2)2725-2324 FAX: (886-2)2757-7240 TEL: (358-9)638-122 FAX: (358-9)-638-611
Svardvagen 11C, 182 33 Danderyd, Sweden Zurich
TEL: (46-8) 30 80 90 FAX: (46-8) 30 61 90
Claridenstr. 36, 8002 Zuerich, Switzerland
TEL: (41-44)202-1232 FAX: (41-44)202-4318 Toronto Hongkong 65 Queen St. W. Suite 600, Toronto, ON, M5H 2M5 Rm 3102, 31F, Central Plaza, 18 Harbour Road,
Sydney TEL: (1-416)368-3399 FAX: (1-416)368-2893 Wanchai, HK TEL: 852-2545-9500 FAX: 852-2815-0487
Suite2404, Level24, 1 Market st. Sydney, NSW2000, Quingdao
靑島市 香港中路 40號 旗艦大廈 15層
TEL: 61-2-9264-5199 FAX: 61-2-9264-5299 Paris
TEL: (0532)8388-7931/4 FAX: (0532)8388-7935 Fukuoka 19 Avenue de l'Opera, 75001 Paris, France
Nihonseimei Hakataekimae Bld. 11F, Hakataekimae
TEL: (33-1) 55 35 88 88 FAX: (33-1) 55 35 88 89
3-2-1, Hakata-ku, Fukuoka-city, Japan
Copenhagen TEL: (81-92) 473-2005 FAX: (81-92) 473-2007
111 E. Wacker Drive, Suite 2229, Chicago, IL 60601
Holbergsgade 14, 2nd Fl., DK-1057, Copenhagen K,
TEL: (1-312)644-4323 FAX: (1-312)644-4879
Denmark Frankfurt
TEL: (45)3312-6658 FAX: (45)3332-6654 Mainzer Land str 27-31. 60329, Frankfurt am Main, Germany
Sil TEL: (49-69)2429-920 FAX: (49-69)2533-89
1875 South Grant St, Suite 640, San Mateo, CA Kuala Lumpur
9th Fl., Mui Plaza, jalan P. Ramlee, 50250Kuala
TEL: (1-650)571-8483 FAX: (1-650)571-8065
Lumpur, Malaysia Hamburg
TEL: (603) 2117-7100 FAX: (603)2142-2107 Ludwig-Erhard-Strasse 20, 20459 Hamburg, Germany
TEL: (49-40) 3405-740 FAX: (49-40) 3405-7474

222 KOTRA 223

Korea invites
you to