Industrial Complex vs Individual Site: Which Factory Location is More Advantageous?

Choosing a site for factory construction is one of the most important decisions determining business direction. Whether to enter an industrial complex or build a factory independently on an individual site — this choice can make permit periods 3 months or 12 months.

Let's first examine industrial complexes. Under the Industrial Location and Development Act Articles 6-8, there are four types: national industrial complexes, general industrial complexes, urban high-tech industrial complexes, and agro-industrial complexes. The biggest advantage of industrial complexes is simplified permits. Since uses are already designated according to industrial complex master plans, development activity permits, agricultural land conversion permits, and environmental impact assessments required for individual sites can be omitted or processed through consolidation. From entry contracts to factory operations averages 6-9 months.

Tax benefits are also substantial. Under Local Tax Special Cases Limitation Act Article 78, industrial complex tenant companies can receive acquisition tax reductions of 50-75% and property tax reductions of 35-75%. In Gyeongsangbuk-do's case, additional support funds are available under the Gyeongbuk Investment Promotion Ordinance. For example, a company investing KRW 5 billion in Gyeongju Gangdong Industrial Complex could save approximately KRW 200-370 million in acquisition taxes alone.

Conversely, individual sites offer high flexibility in location choice. You can build factories in desired locations at desired scales. However, the price is significant. Development activity permits (National Land Planning Act Article 56), factory establishment approvals (Industrial Cluster Development Act Article 13), building permits (Building Act Article 11), agricultural land conversion permits (Agricultural Land Act Article 34), and environmental-related permits must each be obtained individually. Infrastructure like roads, power, and water/sewage often must be directly funded by businesses, greatly increasing initial costs.

Comparing actual costs shows clear differences. Gyeongbuk region industrial complex lot prices are around KRW 150,000-400,000 per ㎡, while individual sites can cost over KRW 500,000-1,000,000 per ㎡ including land purchase plus infrastructure development costs for roads, electricity, and water supply. You can check lot prices and entry status for each industrial complex at the Industrial Location Information Center (industryland.or.kr) operated by Korea Industrial Complex Corporation.

The July 2024 Industrial Cluster Development Act Enforcement Decree revision further strengthened industrial complex advantages. Entry industry restrictions were eased, allowing industries previously difficult to enter into industrial complexes. This change is expected to further increase industrial complex occupancy rates. Gyeongsangbuk-do industrial complex average occupancy rates already exceed 85%.

So what's the answer? There's no universal solution. Optimal choices vary based on industry, scale, required infrastructure, funding situation, and timeline. If quick construction start and cost savings are important, industrial complexes are advantageous. If special environmental conditions or large sites are needed, individual sites should be considered. The Gyeongju-Gyeongbuk region offers various options including Gangdong Industrial Complex, Oedong Industrial Complex, and Myeonggye Industrial Complex, so we recommend comparing locations suitable for your industry.