Seoul up reshoring tax incentives to draw companies home

[Graphics by Song Ji-yoon]

Korean companies returning home are liable to income tax waiver if they open up a work site on home turf within five years instead of one year after they fold oversea business under a new reshoring policy.

Under the amendment released by the finance ministry on Monday, companies will be given more time – five years – instead of current one to start business anew after they register overseas business closure.

When they build a factory within five years, they will be entirely exempted of income tax for five years and can pay half of it in the following two years. Tax incentive also would be provided if companies scale back overseas capacity to build or expand production at home. The exemption and deduction rate will hinge on reduced output from overseas operation.

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