Site Map |
Overview |
R&D Expenditure |
R&D Output |
Human Resources |
S&T Policies |
S&T Organizations |
Emerging Technologies |
Korea has tax incentive programs and preferential loan programs, which are eligible to any firms performing R&D projects. The benefit and content of the tax incentive program and loan program are as follows:
Tax incentives programs
Private enterprises that reserve a fund for technology development, technical information, R&D manpower and facilities etc. for three years are given a tax reduction. The maximum tax deductible reserve is 4% of the total sales. Private enterprises may take advantage of tax reduction of 15% of their total expednitures, on training and in-house technical college and they are also allowed a tax deduction of up to 10% of their investments for research facilities and depreciate the total investments for research and test facilities at the rate of 90% a year.
Loan programs
Low interest loan programs from commercial banks' own fund, venture capitals, and government funds.
The government provides up to 50% of the total R&D expenditures when private industrial institutes are involved in national R&D projects for core and fundamental technology development, industrial technology development, alternative energy development, etc. Also, the government provides financial support of up to 80%~90% of the total cost to individuals or small firms to help commercialize new technology.
Government-owned corporations such as the Korea Electric Power Corporation (KEPCO) and the Korea Telecommunication Corporation (KTC), etc. extend financial support of up to 80% of their total R&D investment to relevant R&D centers and industrial technology research unions to develop indigenous R&D products.
Banks, such as the Korea Development Bank, the Citizens National Bank, the Industrial Bank of Korea etc. provide long-term, low-interest loans for R&D to private industries for new products and process technologies' development, and commercialization of new technologies.
Venture capital institutions such as the Korea Technology Banking Corporation (KTB) offer comprehensive financial support to private companies' technology development activities. This financial support takes the form of equity investments, debenture purchases, conditional loans, technology development loans, leasing or factoring services.
Organisations stationed in the Incheon Metropolitan City's economic zones are fully exempted from various taxes including income tax and corporation tax for three years and 50% of taxes for an additional two years.
R&D centers participating in national R&D projects are assisted with the whole or a part of R&D costs by the government. Foreign R&D centers are given opportunities equal to those of domestic R&D centers.
Government has introduced a cash grant system for new foreign investors who invest over US$10 million in high-tech industries (or US$5 million in R&D facilities).
The government is providing various tax support systems to induce science and technology innovation.
The government provides financial support for companies and institutes involved in R&D through the Science Technology Promotion Fund, Korea Development Bank, Kookmin Bank and others.
Korea cannot upgrade its capacity in every industry to the level of all highly advanced nations, but it intends to build and maintain its competitiveness in selected industries by concentrating its limited R&D resources. As part of its globalization strategy, the Korean government developed the highly advanced national (HAN), to select and develop strategic industrial technology requiring nationwide R&D.
This plan projects, develops and assimilates core technologies in strategic areas where Korea will have the capacity and capability to compete on the level of more advanced countries by 2001. A HAN project is a large-scale R&D project carried out through joint investment by the government and the chaebols under a long-term project management system, which is supported by interministerial cooperation and coordination. Various R&D actors, such as universities, industries, and government-supported research institutes participate in each project. For the areas where domestic R&D capacity is lacking, international cooperation is actively pursued. The Korean government created two categories of HAN projects.
The first category, "product technology development projects," concerns technologies for specific high-technology products that may have a substantial share in the world market. The second category, "fundamental technology development projects," concerns core technologies that are absolutely necessary to advance the economy, society, and human life. Some of the technologies targeted by the HAN projects are aerospace, automobiles, bioengineering, communications, computers, electronics, environment, machinery and metals, medical equipment, nuclear power, and semiconductors. It is under the auspices of these projects that international cooperation and technology transfer are currently being pursued.
South Korea's National Patent System
Korea Intellectual Property Research Center or KIPRC was founded