Special Zone Foundation to Support Special Zone Companies' Growth Through Tax Benefits

The Research and Development Special Zone Promotion Foundation (hereinafter referred to as the Special Zone Foundation) is supporting the growth of special zone companies through tax benefits.

The Special Zone Foundation announced that it held an "Advanced Technology Company Designation System and Tax Reduction System Briefing" on the 19th at the Daejeon Science Complex to introduce these initiatives.

The Special Zone Foundation held an "Advanced Technology Company Designation System and Tax Reduction System Briefing" on the 19th at the Daejeon Science Complex. Photo by Research and Development Special Zone Promotion Foundation

The briefing was held for technology-based innovative companies within the Daedeok Special Zone. During the event, participants were informed about the advanced technology company designation system and the tax reduction system available to special zone companies.

The advanced technology company designation is a representative specialized system of the Special Zone, established under the "Special Act on the Promotion of Research and Development Special Zones." It provides practical incentives such as tax reductions to technology-intensive companies within the special zone, enabling their continued growth.

Companies that meet certain requirements can be designated by the Ministry of Science and ICT. The requirements include holding patents in advanced technology fields, generating at least 20% of total revenue from products utilizing those patents, and spending 3% to 5% of revenue on R&D, depending on the size of the company.

Companies designated as advanced technology companies are eligible for a 100% reduction in corporate tax for three years, followed by a 50% reduction for the next two years. In addition, property tax is reduced by 100% for up to seven years, and by 50% for the following three years. Additional tax benefits, such as exemption from acquisition tax on facility investments, are also provided.

The Special Zone Foundation believes that these tax reductions will allow designated companies to reinvest in research and development, thereby laying the groundwork for the commercialization of new technologies.

The effectiveness of the advanced technology company designation has been proven through actual company listings. Satrec Initiative, the first company to receive the designation, has grown into a leading space company in Korea. Peptone (No. 12) and LegalChem Bioscience (No. 205) have also successfully commercialized their technologies and listed on KOSDAQ by utilizing this system.

During the briefing, accounting and tax experts explained the system requirements and application procedures. In addition, i3system Co., Ltd., a KOSDAQ-listed company designated as an advanced technology company, shared its growth process and experiences using the system.

In particular, companies that participated in the briefing through prior registration received one-on-one customized consultations, where they were provided with practical advice on interpreting requirements, procedures, and verifying revenue requirements, which are common challenges during the preparation for advanced technology company designation.

Jung Heekwon, Chairman of the Special Zone Foundation, stated, "The advanced technology company designation system aims to create a virtuous cycle where companies commercialize outstanding technologies and reinvest the resulting funds into research and development. The Special Zone Foundation will continue to refine the deep tech value chain that encompasses the commercialization, expansion, and renewed challenges of technology-intensive companies."

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