Complete Guide to 4-Step Factory Establishment: From Approval to Registration at a Glance

Many who've decided to build factories are unsure where to take the first step. Should I look for sites first, or get permits first — getting this sequence wrong can waste months. The Industrial Cluster Activation and Factory Establishment Act (Industrial Cluster Development Act) Article 13 broadly defines factory establishment in 4 steps: location selection, factory establishment approval, factory construction, and factory registration.

Step 1, location selection, is practically most important. Under National Land Planning and Utilization Act Article 36, all Korean land is classified by zoning districts, with factory construction possible only in limited zoning districts like industrial zones, semi-industrial zones, and planned management areas. The most common practical mistake is purchasing land in green zones or agricultural promotion areas because it's 'cheap,' then belatedly discovering factory permits are impossible. The Korea Industrial Complex Corporation's Factory Establishment Online Support System (factoryon.go.kr) allows advance verification of factory establishment possibility for specific lots.

Step 2 is factory establishment approval. Under Industrial Cluster Development Act Article 13, factory establishment approval applications are submitted to relevant city/county/district offices. While the legal processing period is 30 days, the key here is properly utilizing the 'consolidated processing system.' Consolidated processing is a system where obtaining the main permit (factory establishment approval) is deemed to include related permits like building permits, development activity permits, and agricultural land conversion permits. For example, to build factories on agricultural land, you'd normally need separate agricultural land conversion permits (Agricultural Land Act Article 34), building permits (Building Act Article 11), and development activity permits (National Land Planning Act Article 56), but consolidated processing can handle these at once. Practically, 6-8 individual permits are often processed through consolidation.

Notable is the Industrial Cluster Development Act Enforcement Decree revision implemented July 2, 2024. This revision's core elements are easing industrial complex entry industry regulations and diversifying funding methods. Previously, industries eligible for industrial complex entry were quite restricted, but revisions made industry classification systems more flexible. Additionally, foundations were established for business operators to utilize various financial techniques including PF (project financing) for funding.

Step 3 is groundbreaking and construction. After obtaining all permits, construction can begin upon filing construction commencement notices (Building Act Article 21). Changes may occur during construction — minor changes suffice with post-notification, but major changes like structural modifications require design change approvals. Factory construction typically takes 6 months to 1 year, during which fire protection and environmental facility installations proceed concurrently.

Final Step 4 is factory registration. After receiving building use approvals (Building Act Article 22), factory registration applications are submitted to relevant city/county/district offices. Fire facility completion certificates, environmental-related permits, and industrial safety and health documents must be submitted together. Only upon factory registration completion is the facility officially recognized as a 'factory' enabling formal manufacturing operations. According to Korea Industrial Complex Corporation data, approximately 5,000 new factory registrations occur annually nationwide as of 2024.

From practical experience, Step 2 permit compilation takes the longest in the overall process, often accounting for 60-70% of total duration. Large-scale projects requiring environmental impact assessments can take 12-18 months. The Environmental Impact Assessment Act revised February 20, 2024 (effective February 21, 2025) allows online public hearings, expected to somewhat shorten environmental impact assessment periods. Isang Group, with over 20 years of accumulated permit expertise in the Gyeongju-Gyeongbuk region, knows how to process this Step 2 most efficiently.

If you're preparing factory establishment for the first time, we recommend first checking location conditions at factoryon.go.kr. Then receiving preliminary consultations from economic departments of relevant city/county/district offices or industrial complex management organizations makes things much easier. Moving with permit specialists from the location selection stage can greatly reduce unnecessary trial and error.