[2026 Growth Strategy] 10-Year Full Income and Corporate Tax Exemption for Startups in RE100 Industrial Complexes

'2026 Economic Growth Strategy' Announced
Measures for Region-Led Growth Prepared
Regional Tax Support Differentiation Planned
Tax Incentives for Industrial Safety Investment
R&D Credit Rate Increased Up to 40%
Practical R&D Initiatives for

Industrial complexes that supply renewable energy to meet the power needs of tenant companies through RE100 (100% renewable energy use) will begin to be established in earnest this year. Startups located within RE100 industrial complexes are set to receive the highest level of fiscal and tax support among all industrial complexes, including full exemptions from income tax and corporate tax for 10 years.

The signboard of the Ministry of Finance and Economy building at the Government Complex Sejong. Photo by Yonhap News Agency

In an effort to strengthen industrial safety management, tax incentives for investments in safety equipment will also continue. As advanced safety technologies such as artificial intelligence (AI) and robotics are designated as new growth and original technologies, the R&D tax deduction rate will be expanded from a maximum of 25% to up to 40%.

Tax Support for RE100 Industrial Complexes... Regional Tax Differentiation Planned

The Ministry of Finance and Economy announced several measures for region-led growth in its "2026 Economic Growth Strategy" released on January 9. First, the establishment of RE100 industrial complexes will begin in earnest. The government plans to enact a special law to provide regulatory and residential support for RE100 complexes. This will include the highest level of fiscal and tax incentives among industrial complexes. Startups within these complexes will be granted a 100% exemption from income and corporate taxes for 10 years, followed by a 50% exemption for an additional five years.

The relevant special law is currently under discussion at the Subcommittee on Industry, Trade, and Energy and Small and Medium Venture Business. The Ministry of Trade, Industry and Energy, as the responsible ministry, intends to expedite the bill's passage. This year’s budget related to RE100 industrial complexes is 135.1 billion won, and the government has decided to provide sufficient tax benefits at every stage to encourage relocation, startups, and investment in these complexes.The plan for selecting and establishing pilot complexes will be announced in the second half of the year.

To institutionalize preferential support for regional areas, a plan to differentiate tax incentives by region will also be prepared by July. An official from the Ministry of Finance and Economy explained, "The purpose is to differentiate tax benefits, such as corporate tax, according to the need for regional support," adding, "The direction has been set, and we are currently reviewing specific standards and measures." The official also noted, "This will be included in the upcoming tax reform announcement."

To boost regional consumption, the government will establish a basic plan for revitalizing local gift certificates (2026-2030) by June. Measures for the complementary operation of local gift certificates and Onnuri gift certificates will also be developed. In addition, starting in March, a regional vacation support program will be launched in 20 selected areas, offering a 50% reimbursement of travel expenses.

Tax Incentives for Industrial Safety... R&D Deduction Rate Up to 40%

The economic growth strategy also includes a "three-part tax incentive package for safety equipment investment" to strengthen industrial safety management. The government will expand the scope of the integrated investment tax credit for safety equipment to include not only company employees but also subcontractors, special types of workers, and delivery personnel. In addition to legally mandated facilities, safety facilities utilizing new technologies such as AI will also be eligible.

In the third quarter, the government will revise the Enforcement Decree and Enforcement Rules of the Restriction of Special Taxation Act to expand deduction rates. By designating advanced safety technologies utilizing AI and robotics as new growth and original technologies, tax support for R&D and related facility investments will be increased. The R&D deduction rate for general technologies is 2-25%, but for new growth and original technologies, it will be 20-40%.The investment tax credit rate for general technologies is up to 10%,while for new growth and original technologies, it will be up to 12%.

The government will also introduce accelerated depreciation for small and medium-sized enterprises investing in safety equipment. Accelerated depreciation is an accounting procedure that allows a larger portion of a fixed asset's value to be depreciated in the early years of its useful life, with depreciation expenses decreasing over time. By shortening the asset's useful life and recognizing investment costs as expenses earlier, companies can reduce their tax burden.The government plans to allow accelerated depreciation by reducing the standard useful life by 50%.

Lifestyle R&D for Small Business Owners

The government also included measures to strengthen the capabilities of small business owners, help them overcome crises, and support their recovery. In the capacity-building process, lifestyle R&D will be carried out to enhance productivity tailored to small business owners, including recipe development, AI-powered cooking robots, AI marketing, and AI commercial district analysis. The government plans to support the use of AI in various areas such as product development, automation, and process improvement.

Specifically, in the first half of this year, the government will encourage participation through new item competitions and develop productivity enhancement measures for small business owners through research contracts. Support will also be provided to help small business owners develop new products and technologies through cooperatives and to jointly develop projects such as process improvement. Government matching will be available for market development. Up to 300 million won in support will be provided to each of the 80 selected cooperatives.

An official from the Ministry of Finance and Economy stated, "Existing R&D projects have focused on research, but lifestyle R&D will concentrate on development," adding, "We will focus on areas that have been difficult to support through traditional R&D, such as developing food recipes needed by small business owners."