The Daegu–Gyeongbuk Free Economic Zone (DGFEZ), designated in May 2008, is one of South Korea’s most dynamic free zones. Located in the nation’s southeastern industrial belt, DGFEZ connects Daegu Metropolitan City with Gyeongsangbuk Province, two regions already recognized for their strong manufacturing base in automobiles, steel, and electronics. The zone was created to accelerate convergence industries, expand global business opportunities, and provide an attractive environment for foreign investors.
Industrial Districts and Key Activities
DGFEZ is divided into several specialized districts, each with a distinct industrial focus:
- Daegu Technopolis – A hub for automobile parts, mechatronics, IT convergence, and green energy technologies.
- Suseong Alpha City – Designed as a futuristic IT-medical complex, integrating software, digital innovation, and biotech applications.
- Sinseo Meditech District – Focused on advanced medical research and development, fostering healthcare innovation.
- International Fashion District – Combining textile and fashion industries with media, commerce, and residential spaces.
- Yeongcheon High-Tech Park – Specializing in smart mobility parts, automotive interiors, and cutting-edge materials.
- Pohang Fusion Tech District – Anchored by biotechnology, medical devices, and renewable energy sectors.
- Gyeongsan Knowledge Industry District – Supporting machinery parts, advanced materials, and collaborative R&D activities.
- Yeongcheon Industry District – A base for automobile parts, mechatronics, and metal machinery manufacturing.
Strategic Advantages
The strengths of DGFEZ extend beyond incentives:
- Its geographic location provides direct access to major industrial cities such as Pohang, Ulsan, and Changwon, forming a robust supply chain ecosystem.
- A strong R&D base is supported by leading universities and research institutes, ensuring steady access to innovation and skilled talent.
- The region offers settlement support for expatriates and their families, including housing, education, and healthcare facilities, ensuring a comfortable living environment for global professionals.
DGFEZ Investment Incentives: What Investors Gain from Daegu-Gyeongbuk Free Economic Zone
The Daegu-Gyeongbuk Free Economic Zone (DGFEZ) offers a compelling incentive ecosystem to attract and support businesses that locate in its districts. These benefits are structured around reducing costs, easing regulatory burdens, and offering supportive infrastructure and services that enhance competitiveness. Below are the key benefits for investors in DGFEZ as described on its official site.
Key Investment Incentives
- Tax, Customs & Financial Relief
- Customs and Import Benefits: Goods imported for investment purposes—typically capital goods required for facility establishment or production setup—can be exempt from import duties. This helps reduce upfront equipment and machinery costs.
- Local Tax Reductions / Exemptions: Investors are eligible for reductions or exemptions on local taxes (such as acquisition and property taxes), depending on the nature and scale of the investment.
- Corporate / Income Tax Incentives: Under certain conditions, reducing corporate income tax burdens is possible for qualifying investors. The exact reductions depend on project scale, employment, export orientation, and the district in which the investment is located.
- Land, Infrastructure & Site Support
- Long-term Land Leasing: Investors may access leasehold land in DGFEZ for extended periods, enabling stable and predictable land use for manufacturing or R&D operations.
- Infrastructure Support: DGFEZ supports the development of essential infrastructure—transportation access, utilities, roads, and site preparation—to reduce costs for investors in building facilities and connecting to logistic networks.
- Administrative & Regulatory Assistance
- Streamlined Business Processes: DGFEZ offers one-stop investment support services that aim to simplify and speed up licensing, permitting, and registration procedures. This reduces delays for new projects.
- Supportive Regulatory Environment: Regulatory relief is available in several areas to ease business operation burdens, particularly for projects in strategic or high-technology sectors. These can include relaxed oversight or expedited processes for R&D, medical devices, etc.
- Access to Human Capital & R&D Ecosystems
- Strong R&D Base: DGFEZ emphasizes its strength in research capacity—partnering universities, existing research institutions, and innovation clusters—so investments in tech, medical, bio, and advanced manufacturing benefit from proximity to these resources.
- Skilled Workforce Availability: The region offers access to skilled labor pools and educational resources, helping investors find qualified staff more easily.
Sources:
https://dgfez.go.kr/
https://www.fez.go.kr/portal/en/dgfez.do
Created on 28th October, 2025