Government Designates First Opportunity Development Zones in 8 Cities and Provinces... "Newly Established Companies Exempt from Corporate Tax" (Comprehensive)

Designated in 8 Cities and Provinces Including Gyeongbuk... Yoon "Leap into the Local Era"
New Business Sites Fully Exempt from Corporate and Property Taxes for 5 Years
Boosting Regional Competitiveness with Unprecedented Benefits

President Yoon Suk-yeol is speaking at the 9th Local Era Committee meeting and Opportunity Development Zone investment agreement ceremony held on the 20th at the Secondary Battery Integrated Management Center in Blue Valley Industrial Complex, Pohang-si, Gyeongbuk.
[Photo by Yonhap News]

The government has designated eight metropolitan cities and provinces, including Gyeongbuk, as the first Opportunity Development Zones. To ensure that these zones can lead the revival of local industries, corporate inheritance deductions will be significantly increased to 1 trillion won, and newly established or relocated businesses will receive a full corporate tax exemption for five years, among other unprecedented benefits.

On the afternoon of the 20th, President Yoon Suk-yeol presided over the 9th Local Era Committee meeting at the Secondary Battery Integrated Management Center in Pohang Blue Valley Industrial Complex and announced this plan. The meeting was held to designate eight cities and provinces?Gyeongbuk, Jeonnam, Jeonbuk, Daegu, Daejeon, Gyeongnam, Busan, and Jeju?as Opportunity Development Zones.

President Yoon introduced the story of the late Park Tae-joon, the founder of POSCO, who built Pohang Steelworks with the spirit of "death before dishonor," emphasizing the urgent need to unite efforts with the determination to "change everything that can be changed" to overcome the national emergencies of low birth rates, population cliff, concentration in the metropolitan area, and local extinction.

He described the 'Opportunity Development Zones' and 'Education Development Zones' as ways to fundamentally transform the paradigm of local policies. The goal is to successfully establish these zones to create a virtuous cycle where local talents find good jobs locally, work in their regions, and contribute to regional growth.

President Yoon said, "Based on cooperation between the central and local governments, these are the first locally led zones designed and driven by the regions themselves, which will dramatically enhance regional competitiveness and serve as a new springboard to open an era of livable local communities."

President Yoon promised to provide necessary support so that the Opportunity Development Zones can become a flagship brand for fostering local industries.

To this end, for companies relocating to local Opportunity Development Zones, the eligibility for corporate inheritance deductions will be expanded from annual sales under 500 billion won to under 1 trillion won, and the deduction limit will be increased from a maximum of 60 billion won to 100 billion won.

Additionally, businesses newly established or started within the Opportunity Development Zones will receive a full corporate tax exemption for five years, followed by a 50% exemption for two more years. For business-use real estate such as land and buildings, property tax will be fully exempted for five years and then reduced by 50% for another five years, providing unprecedented incentives.

President Yoon emphasized that the total investment scale for the eight local governments that applied for the Opportunity Development Zones reaches 40 trillion won, calling it "a core growth engine that will determine our future in all sectors."

He pledged to personally oversee the progress of the Opportunity Development Zones, checking for any regulations that might hinder investment and promptly resolving any issues.

President Yoon mentioned, "The innovation capabilities of companies and regions must unite to survive fierce global competition," referring to the Boston cluster in the United States, which he visited during his state visit in April last year.

He said, "(This is) an example where local governments play a leading role in attracting corporate investment," and added, "To win the increasingly fierce competition for corporate attraction, various incentives are necessary. The government will provide the needed support," reiterating his commitment.

President Yoon also spoke about Pohang, where the meeting was held.

He said, "Pohang has been the sacred ground of industrialization that led Korea's remarkable leap forward over the past 70 years," and added, "The miracle of steel production for national prosperity that began in Pohang laid the foundation for our industrial development and enabled the Miracle on the Han River."

He continued, "Behind such a transformative innovation was great leadership that led an indomitable challenge," and said, "Chairman Park Tae-joon, who directed the construction of Pohang Steelworks on the barren Yeongil Bay, built it with the spirit of 'If we do not succeed, we will turn right and drown in the sea.'"

He emphasized, "Such an indomitable spirit of challenge is needed," and added, "We cannot overcome the current crisis by continuing with the same methods as before."

President Yoon Suk-yeol is entering the 9th Local Era Committee meeting and agreement ceremony held at the Secondary Battery Integrated Management Center in the Blue Valley Industrial Complex, Pohang-si, Gyeongbuk on the 20th, shaking hands with attendees.
[Photo by Yonhap News]

On the same day, Woo Dong-gi, chairman of the Local Era Committee, approved the first designation plan for the Opportunity Development Zones in the eight cities and provinces. After the committee meeting, President Yoon attended the investment agreement ceremony for the Opportunity Development Zones and encouraged the successful launch of the zones.

Representatives from companies such as EcoPro (Gyeongbuk), POSCO Future M (Jeonnam), Hyosung Advanced Materials (Jeonbuk), L&F (Daegu), Ligachem Bio (Daejeon), SK Ocean Plant (Gyeongnam), Koscom (Busan), and Hanwha Systems (Jeju), along with governors of the cities and provinces, participated in the ceremony.

Lee Cheol-woo, governor of Gyeongbuk Province, said, "It is necessary to quickly proceed with follow-up measures after the designation of the Opportunity Development Zones, including legislative amendments related to tax reforms such as corporate inheritance deductions," and suggested, "If the region desires, the scale of the Opportunity Development Zones designation should also be expanded."

Park Hyung-joon, mayor of Busan, stated, "The structural decline in our society's growth potential, low birth rates, and widening social disparities are all closely related to the unipolar dominance of the metropolitan area," and added, "Increasing innovation hubs like the Opportunity Development Zones is an excellent strategy."