Factory Establishment Permits: Where Should You Start?

When you decide to build a factory, the first consideration is usually 'where to build it.' But there's something you should do first: understanding the complete picture of permits. Factory establishment permits aren't governed by a single law but rather a complex system of multiple interrelated laws.

Key laws related to factory establishment are as follows: The Industrial Cluster Activation and Factory Establishment Act (Industrial Cluster Development Act) is the basic law for factory establishment. Additional laws apply case by case including the Building Act (building permits and use approvals), National Land Planning and Utilization Act (zoning districts and development activity permits), Agricultural Land Act (agricultural land conversion permits), Forest Land Management Act (forest land conversion permits), and Environmental Impact Assessment Act (environmental impact assessments).

The most powerful tool in this complex system is the 'consolidated processing system.' Consolidated processing means that obtaining the main permit (factory establishment approval) is deemed to include related permits. When receiving factory establishment approval under the Industrial Cluster Development Act, building permits, development activity permits, and agricultural land conversion permits can be processed through consolidation at once. Since 6-8 individual permits are often processed simultaneously in practice, significant time and cost savings are possible.

Understanding the legal nature of permits is also strategically important. Permits have distinctions between 'bound acts' and 'discretionary acts.' Bound acts require administrative authorities to grant permits when all legal requirements are met (example: building permits), while discretionary acts allow administrative authorities to determine permit approval based on public interest needs. Factory establishment approvals are basically close to bound acts, but discretionary judgment may be involved in environmental regulations.

The Ministry of the Interior and Safety's 'AI Government24' service, promoted for 2026, is expected to significantly change the permit environment. Starting with Q1 pilot services and scheduled for Q4 official launch, AI will automatically guide necessary permits based on applicants' situations, with some permits processable through one-stop systems. While 2026 will pilot with general restaurants and beauty businesses, expansion to factory establishment and other industrial sectors is likely based on performance.

The most practical starting points at present are two: First, pre-verifying location conditions through Korea Industrial Complex Corporation's Factory Establishment Online Support System (factoryon.go.kr). This allows quick assessment of factory establishment feasibility for lands of interest. Second, requesting preliminary consultations with economic affairs or building departments of relevant city/county/district offices. This costs nothing and provides direct insight into regional regulatory specifics.

While permits are unavoidable processes, they're not intimidating when well understood. By understanding the complete picture, utilizing efficient systems like consolidated processing, and working with experienced specialists, factories can be established faster and more smoothly than expected.