An application shall be submitted to The Ministry of Trade, Industry, and Energy (Department of FDI Promotion) with support of the overseas investment hub offices in KOTRA, Invest KOREA, or the local government. The FDI Cash Grant Support Center to Invest KOREA and its project managers (PM) provide consultation on whether or not the requirements are met, applications, and screening procedures.
1. Application Documents
A foreign investor wishing to receive a cash grant should submit attachments such as cash grant application and investment plans, as well as a PM’s comments on the cash grant to the Ministry of Trade, Industry, and Energy.
2. Review of Application
An Evaluation Committee consisting of the PM from Invest KOREA and professionals from the Ministry of Trade, Industry, and Energy and local government shall be held to evaluate eligibility for a cash grant. The level of technology and the technology transfer effect (as technology evaluation), whether the foreign investment overlaps with any domestic investment (as industrial evaluation), and the viability of investment (as financial evaluation) shall be evaluated.
3. Evaluation of Limit Cash Grant Ceiling
A cash grant ceiling calculation committee consisting of related negotiators and at least two public professionals shall be held to calculate the ceiling of cash grant considering the possibility of investment outside of Korea, job creation effect and the quality of employment, propriety of the location, and the effects on the regional and national economy, and a report shall be submitted to the Ministry of Trade, Industry and Energy. The cash grant shall be negotiated between the negotiator and foreign investor within the ceiling determined by the committee.
4. Negotiation and Decision of Cash Grant Amount
The Ministry of Trade, Industry, and Energy shall negotiate the cash grant with the Minister of Economy and Finance and related local government, and following the negotiation, it shall be determined through deliberation and resolution by the Foreign Investment Committee and executed after a contract for the cash grant is concluded. However, a contract for cash grants may be concluded through deliberation and resolution by the Foreign Investment Working Committee where the amount of cash grants excluding the amount of relocation support is less than KRW 1 billion.
Processing period: Cash grants shall be determined within 60 days from the receipt of the application except where unavoidable, and the period may be extended by up to 30 days.
5. Payment Method
A cash grant may be paid in a lump sum within one year from the date the contract is concluded or in up to ten installments within five years from the conclusion of the contract. The applicant shall open a separate account and perform accounting for the cash grant received, clearly distinguishing it from his/her revenue and expenditure.
For installment payments, the applicant shall submit an application which includes the scale, purpose, details, etc. of the cash grant for the relevant year, and the cash grant shall be paid within the scope of cash grant agreed upon by the contract for a cash grant, in accordance with the following methods, after evaluating the performance of the investment expenditure plan, actual execution of the cash grant, etc., but may adjust the amount and timing for payment.
6. Conclusion of Contract
Where a decision to provide a cash grant is made, the Minister of Trade, Industry, and Energy shall conclude a contract for such cash grant, which provides for the period of a contract for cash grant, the method of the payment, and acquisition or lease of land for rent, with the head of the relevant local government and applicant.