Want R&D tax credits for your company?

Korea offers substantial tax incentives to companies that formally certify a research function — either a full corporate research institute (기업부설연구소) or the lighter-weight dedicated R&D department (연구개발전담부서). Many small businesses assume this is out of reach because a research institute needs multiple dedicated researchers — but the R&D department track only requires one, regardless of company size, and since February 1, 2026 the whole system runs under its own dedicated law (기업부설연구소법), which clarified several procedural points. Setup is only half the picture: this certification is harder to keep than it is to get, and losing it after the fact means clawing back every tax credit already claimed.

Researcher headcount by company size (기업부설연구소 track)

• Venture-certified company (벤처기업): 2 or more
• Small company (소기업): 3 or more — relaxed to 2 for the first 3 years after incorporation
• Mid-size company (중기업): 5 or more
• Large company: 10 or more The R&D department (연구개발전담부서) track needs just 1 dedicated researcher regardless of company size — the reason it's the practical starting point for very small companies.

Who counts as a qualifying researcher

• A bachelor's degree in a natural-science/engineering field, or a licensed technician (기사 이상) credential, is the general rule
• SME relief: an associate degree (전문학사) plus 1–2 years of relevant experience also qualifies
• As of the 2026 update, graduate students actively participating in a national R&D project can also be registered as researchers
• At a small company within 3 years of incorporation, the CEO can personally serve as the sole dedicated researcher

Space requirements

• In principle, the research space must be walled off on all sides with its own separate entrance, distinct from general office or production space
• Exception: for spaces of 50㎡ or less, partitions or shelving that clearly demarcate the area from other departments are accepted in place of fixed walls
• Movable partitions of 2 meters or more in height also qualify as independent space where fixed walls aren't practical
• A durable signage plate (현판) marking the research space entrance is required
• Only research equipment used directly by the dedicated researchers may be kept in the space — general office supplies or unrelated inventory stored there is flagged during inspection

The part most businesses underestimate: staying certified

• Change notifications: any change to personnel, address, company name, or capital must be filed online within 14–30 days of the change — missing this is one of the most common findings during an on-site inspection and can itself trigger cancellation
• Annual R&D activity report (연구개발활동조사표): due each year around late April, covering the prior year's activity and spending — failing to file is treated as evidence the company has no genuine research intent, and results in automatic cancellation
• No dual-duty rule: a registered researcher must work exclusively on R&D — if a researcher is found handling sales, production, or general admin work, the certification can be revoked and every tax credit already claimed must be repaid
• Research notebook (연구노트): ongoing, contemporaneous records of actual R&D work must be kept on file — without it, R&D activity is treated as not having occurred, again triggering cancellation and clawback
• Vacancy backfill: if a researcher leaves and headcount drops below the minimum, a qualified replacement must be secured within 30 days
• KOITA (한국산업기술진흥협회) announced a major on-site inspection wave for April 2026, checking researcher dual-duty status, physical space independence, and actual R&D evidence like research notebooks and the last two months of activity records — refusing an inspection without valid cause is itself grounds for cancellation

What this covers

• Corporate research institute (기업부설연구소) certification, sized to your company's headcount tier
• Dedicated R&D department (연구개발전담부서) certification — qualifies with a single dedicated researcher, regardless of company size
• Tax credit and government R&D program eligibility that follows certification, including the higher credit rate for national strategic technology fields
• Ongoing compliance support — change notifications, the annual activity report, and preparation for an on-site inspection
• Guidance under the newly independent 기업부설연구소법 (effective February 1, 2026), which separated and clarified rules previously folded into broader legislation

What we handle

• Confirming which track — research institute or R&D department — fits your company's size, researcher count, and researcher qualifications
• Preparing the certification application, floor plan, and required supporting documents
• Advising on the tax credit and program-eligibility benefits that follow certification
• Tracking change-notification deadlines and the annual R&D activity report so a filing lapse doesn't trigger cancellation
• Pre-inspection review ahead of a KOITA on-site check

How the process works

1. We confirm your company's size, researcher count and qualifications, and which certification track applies.
2. We prepare and file the certification application with the required documentation and space plan — this is a "establish first, then report" (선설립 후신고) system.
3. We advise on the tax credit and government program benefits available once certified, and set up tracking for ongoing compliance deadlines.

Who typically needs this

Small businesses and startups with as few as one dedicated researcher who assumed certification was out of reach, growing companies weighing whether to certify a full research institute or the lighter R&D department track, and already-certified companies facing a compliance lapse or an upcoming on-site inspection.

Who is excluded

Nonprofit corporations, medical corporations and hospitals, schools, entertainment and gambling-adjacent businesses, wholesale/trading businesses unrelated to R&D, and companies delinquent on national taxes or currently closed/suspended are not eligible to register (technology holding companies may qualify in some cases — worth a pre-check).

Common mistakes

• Assuming certification requires multiple researchers regardless of company size — the R&D department track needs only one
• Not confirming which researcher headcount threshold applies to your specific company size — venture, small, mid-size, and large companies each have a different minimum
• Missing a change notification (personnel, address, name, capital) within the 14–30 day window, or missing the annual R&D activity report deadline — either can trigger cancellation
• Letting a researcher take on sales, production, or general admin duties, or failing to keep a research notebook — both are common grounds for cancellation plus clawback of tax credits already received
• Missing the procedural updates introduced when the framework became its own independent law in February 2026

Tax and financial benefits

• 25% tax credit on R&D labor and expense costs for the current period, rising to 40–50% for national strategic technology fields such as semiconductors, bio, and secondary batteries (조특법 제10조)
• Local tax relief on real estate acquired for the research space: 60% acquisition-tax and 50% property-tax reduction (SME)
• Non-taxable researcher activity allowance up to KRW 200,000/month
• Eligibility for the 전문연구요원 program (military-service alternative for qualifying researchers)

Timeline

Certification timelines depend on the completeness of the application and supporting documentation; the R&D department track is generally the faster of the two given its lighter staffing requirement.

Applying for R&D grant funding once certified? See our government subsidy & grant consulting service.