Daegu City Applies as Nation's First for 830,000-Pyeong 'Opportunity Development Zone' Designation

Tax Incentives and Regulatory Exceptions for Companies

Investment of 4 Trillion Won and Employment Effect of 4,355 People

Daegu City recently applied to designate an Opportunity Development Zone, the fastest among all regions nationwide, to actively respond to the President's promise of ‘establishing the Suseong Alpha City in the eastern region as a national digital innovation hub and reorganizing the industry centered on mobility and robotics in the southwestern region’ at the Daegu regional public discussion forum.

The Opportunity Development Zone is a system that provides a package of tax reductions and regulatory exemptions to companies that have signed investment agreements with local governments to promote large-scale investments in local areas.

Map of the Opportunity Development Zone applied for by Daegu City.

The government is accepting applications for the designation of Opportunity Development Zones as soon as localities are ready, without a separate public contest period, through the announcement of the ‘Guidelines on the Designation and Operation of Opportunity Development Zones’ (March 4, 2024). Daegu held the Daegu Local Era Committee meeting to review the ‘Daegu City Opportunity Development Zone Basic Plan’ and applied as the first zone nationwide on the 22nd.

Amid the accelerating digital transformation of the overall economy and industry, Daegu City applied for the first phase of the zone centered on Suseong Alpha City (digital) and the National Industrial Complex and Kumho Waterpolis (advanced manufacturing) to enhance the region’s digital competitiveness and swiftly transition to future industries. Metropolitan cities can apply for divided areas within a total of 1.5 million pyeong, and the applied area this time is 2,734,000㎡ (830,000 pyeong), with an investment scale of about 4 trillion KRW.

Looking at the detailed contents by district, first, Suseong Alpha City is the largest ICT/SW company cluster in non-capital areas, housing 243 ICT/SW companies, 4,525 residents, and 13 corporate support infrastructures. It was selected as a ‘regional digital innovation hub’ last year and is currently advancing the ‘National Digital Innovation Zone Development Project.’

The major investing companies include six firms such as the SK REITs Management and SK C&C consortium, which plans to build an AI data center, with a total investment scale of about 1.0396 trillion KRW.

Suseong Alpha City can collaborate with the nearby advanced medical complex in the innovation city, the National Information Society Agency (NIA), regional industrial complexes, and various other entities. It was designated as an economic free zone in 2008 and is also pursuing designation as a research and development special zone, so it is expected to generate significant synergy from the designation as an Opportunity Development Zone in the future.

Conceptual Diagram of Daegu Opportunity Development Special Zone.

The National Industrial Complex is the largest regional industry-academia-research cluster, housing about 200 advanced manufacturing companies including Hyundai Robotics and Daedong Mobility, as well as the Korea Automotive Technology Institute, Intelligent Automotive Parts Promotion Institute, DGIST, and campuses of Keimyung University and Kyungpook National University.

In particular, following its designation last year as a specialized complex for motor materials, parts, and equipment, nearby facilities such as the National Robot Test Field and Secondary Battery Recycling Park are also being established, making it expected to play a key role as a forward base for the expansion of future industries upon designation as an Opportunity Development Zone.

Daegu City initially applied for the zone focusing on the second-phase site where new investments are active, and for the first-phase site, targeted companies planning new investments among those participating in the motor materials, parts, and equipment specialized complex and robotics companies.

The major investing companies include six firms such as L&F, preparing to become a comprehensive secondary battery materials company, and Koa Automotive, a participant in the motor materials, parts, and equipment specialized complex, with a total investment scale of about 2.8617 trillion KRW.

Kumho Waterpolis serves as a central hub connecting the manufacturing industrial complexes concentrated in the southwestern region and the digital cluster in the eastern region, and is an essential core hub in the urban area to complete the region’s ‘manufacturing-digital belt.’

The main investment fields are electric vehicle and robot parts, secondary battery modules, etc., and upon designation as a zone, it is expected to create synergy with the National Industrial Complex and contribute to balanced industrial development across regions.

According to an analysis by the Daegu Policy Research Institute, the direct employment effect from corporate investment due to the designation of the Opportunity Development Zone is expected to be about 4,355 people, and employment induced by fiscal input is about 2,454 people. Furthermore, by attracting digital and advanced manufacturing anchor companies, it is projected to greatly contribute to revitalizing the digital convergence ecosystem within the region, as well as the virtuous cycle expansion of corporate investment, job creation, and talent inflow.

Jung Jang-su, Deputy Mayor for Economic Affairs, said, “Daegu City’s application as the first Opportunity Development Zone nationwide expresses Daegu’s determination to fill the expanding economic territory due to the construction of the Daegu-Gyeongbuk New Airport with cutting-edge industries and companies.” He added, “We will do our best to expand the zone to future industrial spaces such as the 2nd National Industrial Complex and Gunwi New Airport Industrial Complex, and to create the best corporate settlement environment by linking with urban convergence, education, and cultural special zones in the future.”

This content was produced with the assistance of AI translation services.