3-Line Summary > 1. If the factory construction area is over 500㎡, you must obtain factory establishment approval before factory registration. This also applies if you buy an existing building and use it as a factory. > 2. The application form, business plan, manufacturing process diagram (manufacturing process), machine list, and drawings must all match each other and the actual site. Most supplementary requests arise from these inconsistencies. > 3. After approval, the sequence is machine installation → factory establishment completion report → on-site inspection → factory registration. You need to plan your schedule backward from the completion date required for things like supplier registration and hiring foreign workers.
Table of Contents 1. The seemingly simplest document 2. What I heard at the district office: "You must obtain approval first" 3. 500㎡ and 'warehouse facilities' — the reason I had to address both 4. Two machines listed on the machine list but not on site 5. A washing tank brought about environmental consultation 6. After approval — completion report and on-site inspection 7. The day the factory registration certificate was issued 8. Checklist for factory establishment approval and registration
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1. The seemingly simplest document
I am an administrative agent (administrative scrivener) based in Songdo, Incheon. I would like to introduce an episode I encountered while working.
It took two months to buy the building. It took three weeks to move the machines. But the thing that took the longest was a single A4-sized factory registration certificate. When the client first contacted me, I thought this would be the simplest document.
The client was a woman in her early thirties, the representative. She had inherited a small precision machining factory from her father four years ago and had nine employees. The company manufactured industrial pump parts by milling them with CNC lathes and machining centers and supplied them to two main clients.
Until then, they had operated in a leased factory. When the lease agreement was about to expire and the landlord expressed a desire to sell, the representative decided to buy a warehouse building located in a planned management zone on the outskirts of the metropolitan area. The construction area was slightly over 600㎡. More than half of the purchase funds were loans.
The schedule was tight. One of the main clients was conducting a cooperative vendor re-registration review that would be completed by the end of November, and the new business premises’ factory registration certificate was included in the submitted documents. Failure to re-register would jeopardize nearly 60% of the company's revenue. There were also plans to hire two more foreign workers in the second half of the year, which could only proceed once the factory registration was complete.
2. What I heard at the district office: "You must obtain approval first"
The documents arrived via email first. There was the sales contract, building permit, land use plan confirmation, and a draft factory registration application form prepared by the representative. At the end of the email was a brief explanation of the circumstances.
The representative went to the district office’s civil affairs office to apply for factory registration the week after paying the final installment. This was because the real estate broker had said, "It's a planned management zone, so there are no problems with operating a factory." That statement itself wasn't wrong. Planned management zones are areas where factories can be located depending on the industry.
However, the guidance from the public official was different. Because the factory construction area was over 500㎡, factory establishment approval must be obtained first, and because the building permit stated the purpose as warehouse facilities, it could not be registered as a factory in its current state. The application was not accepted.
Article 13, Paragraph 1, of the 「Act on Promotion of Industrial Agglomeration and Establishment of Factories」 stipulates that factories with a construction area of 500㎡ or more that are newly built, expanded, or change industries must obtain the approval of the mayor, military commander, or district office head. This means that factories of a certain size must first be reviewed to see if "this factory can be built in this location" before they can be "registered."
The representative’s misunderstanding was here. They thought that since the building already existed, it wasn’t a new construction and therefore registration would be sufficient. However, using a warehouse as a factory is the same as setting up a factory in that location. This kind of misunderstanding is not uncommon.
3. 500㎡ and 'Warehouse Facilities' — The Reason for Addressing Both Simultaneously
The initial consultation took place in our office on Thursday afternoon of that week, at the scheduled time. The representative brought over more than a hundred photos of the building they had purchased, loaded onto their laptop.
There were two main issues: factory establishment approval and change of building use. The representative intended to handle them sequentially, finishing the change of use first, then obtaining the approval, and finally registering the business.
I suggested changing the order. There were three reasons for this.
- Firstly, the presumptive system. There is a system where certain related permits and licenses are considered to have been received along with factory establishment approval. Because the relevant district office coordinates with the architecture department during the approval process, it could be faster to handle them together within the approval application rather than having the change of use go through a separate process. The extent to which certain permits are processed together varies by district office, so we confirmed with the relevant department before submitting the application.
- Secondly, site verification. Even if it’s a planned residential area, not all business types are permitted. Restrictions apply depending on the business type and emission facilities. If a site verification issue arises during the approval stage after obtaining the change of use, the previous procedures would be wasted.
- Thirdly, the deadline. If a factory registration certificate is needed by the end of November, the approval → machine installation → completion report → on-site inspection → registration must all be completed within that timeframe. There wasn't room to process each procedure separately.
So, what we did that day was mark the dates backward from the November deadline on a calendar. By calculating backward from the registration application date, completion report date, machine delivery date, and approval target date, we determined that the approval application needed to be submitted within three weeks at the latest.
4. Two Machines Listed in the Machine List, but Not Present on Site
The factory establishment approval application includes a business plan, manufacturing process diagram, machine and equipment list, and layout drawing. The representative had prepared a machine list containing fourteen items.
Next Tuesday, I accompanied the representative to the new building site. The reason for viewing the site before submission is simple: when the completion report is filed, relevant agencies verify the existence of the building and the machines on site. If there’s a discrepancy between the documents and the site at that time, it will lead to supplementary requests or rejection. It’s better to get everything aligned from the beginning.
While comparing the list and process diagram with the old factory and the new building, we discovered two things.
Firstly, the two old universal lathes listed on the list were machines the representative intended to dispose of from the old factory. Machines that weren’t being moved to the new building remained on the list. The representative said, "I listed all the machines we currently have." We removed them from the list and changed the equipment name for that process in the process diagram instead.
Secondly, area classification. Due to the sales conditions, the seller was allowed to use a portion of the building at the back for storage for three months. If that space was included in the factory area, the on-site inspection would result in a situation where someone says, "This is a manufacturing facility, but someone else’s belongings are piled up.” We divided the layout drawing into manufacturing facility area, ancillary facility area, and seller’s use area, and attached an explanatory document to the seller’s use area, along with the return schedule for three months.
There was a minor commotion at the site that day as well. An old ping pong table was found among the seller’s belongings. One of the employees suggested putting it in the break room, and the representative half-seriously asked, "Would that have to be listed as an ancillary facility on the drawing?" The ping pong table doesn’t need to be listed on the drawing. Everyone laughed briefly at that response.
5. A Washing Tank Triggered Environmental Consultation
The permit application was received three days ahead of schedule. And about two weeks later, a request for supplementation arrived. This was after the relevant departments consulted and the environmental department provided input.
The issue was a single step in the process. There was a de-greasing washing process to remove oil from processed parts, and the plan lacked a description of how to handle the water discharged from the washing tank. This is a natural question from the environmental department. It could be subject to discharge facility installation reporting or licensing requirements, and in planned management areas, the location itself may be restricted.
The representative said it hadn't been a problem in the old factory. Upon investigation, it was found that the old factory had outsourced washing to an external company, but started doing it in-house a year ago. The previous factory’s reporting did not include the washing process.
We divided this into three areas for consideration.
1. We accurately compiled the washing method and quantity. We asked the representative and the site foreman to confirm the washing tank capacity, daily usage, replacement cycle, and types of detergents used, and created a table. Writing vaguely "small quantity" will prolong the consultation. 2. We determined the disposal method. We changed the method to entrusting all washing wastewater for disposal and agreed to attach a copy of the contract with the disposal company. This decision was made after review by the representative and a professional from the environmental company. Our role was to accurately transfer the final judgment of whether or not the discharge facility applies and the measurement and design, which are the responsibility of an environmental specialist, into the approval documents. 3. We corrected the process flow diagram and business plan together. We specified "entrusting all wastewater for disposal" in the washing process step and indicated the location of the wastewater storage tank container on the layout drawing as a supporting facility. If only one document is corrected, it will be supplemented again due to discrepancies with other documents.
The supplementary documents were submitted ten days later. The factory establishment permit was issued approximately two weeks after that, five days later than the target date on the calendar.
6. After Approval – Completion Reporting and Site Inspection
Receiving approval is not the end of factory registration. You must install the machinery and file a factory establishment completion report according to the approved content. Although the law provides a certain period between approval and completion reporting, seemingly allowing for some leeway, this case had a tighter deadline of the end of November.
To reclaim the five-day delay, we changed the order of machine relocation. Originally, the plan was to move twelve machines at once. This would have stopped production at the old factory for nearly a week, and completion reporting could not be done until the relocation was finished. Instead, we divided the relocation of the core equipment of the process into two stages. We selected equipment to ensure that all processes in the new building could operate with just the first stage relocation, and filed the completion report on the day the first shipment was completed. The second batch of equipment was the same type and did not change the process configuration. We had previously explained this to the relevant department before filing.
The site inspection took place nine days after the report. The inspector brought the layout drawing and first checked the manufacturing facility area, and at the space used by the seller, they reconfirmed the return schedule. They also checked the wastewater storage tank next to the washing tank and the contract for entrusted disposal. Everything that was written in the documents was present on site, and everything on site was documented.
The 「Act on Promotion of Industrial Complex Agglomeration and Establishment of Factories」 Article 16 stipulates that entities establishing factories must register the factory. Approval, completion reporting, and registration are separate stages, and the items reviewed at each stage are slightly different. It is advisable to confirm the exact articles and interpretations at the National Law Information Center or the relevant authority.
7. The Day the Factory Registration Certificate Was Issued
The factory registration certificate was issued during the third week of November, nine days before the deadline for the prime contractor’s cooperative company re-registration documents. The representative immediately sent a copy of the certificate to the prime contractor’s purchasing department that day, and the re-registration review was approved in early December.
Looking back, the representative’s initial sequence, namely "change of use → approval → registration," was not wrong. However, if each step had been followed in that order, there was a high probability that the deadline of the end of November would have been exceeded. Several factors combined to determine the outcome of this case.
- Bundling the change of use consultation with the approval process
- Eliminating machine list and area discrepancies in advance through pre-site comparison
- Simultaneously correcting the process flow diagram, business plan, and drawings when supplementing the washing process
- Accelerating the completion reporting date by dividing the machine relocation
The foreign worker employment plan was proceeded with after registration, as a separate process.
On the final visit, the representative showed us a photo of the ping pong table located in one corner of the break room. He said the employees take turns playing during lunch breaks. When the factory is back in its place, people’s daily lives will also be back in their place.
8. Factory Establishment Approval and Registration Practical Checklist
If you are in a situation like this, please check in this order.
1. Check the Area First: If the factory construction area is over 500 square meters, factory approval is required before factory registration. Also, check if you are purchasing or leasing an existing building to use as a factory. 2. Building Use and Location: Consider the building’s purpose as stated on the building permit (such as warehouse facilities) and the industry restrictions based on zoning. “Land where you can operate a factory” and “land where your industry can be located” may be different. 3. Document Consistency: Before submission, compare the business plan, manufacturing process diagram, machinery list, and layout drawings to ensure they match each other and the actual site. Exclude equipment that is not yet designated for use or spaces used by others, and clearly differentiate them. 4. Discharge Process Inspection: If there are processes that release water or air, such as cleaning, painting, or heat treatment, prepare a treatment plan in advance. Whether or not the discharge facility applies requires confirmation from an environmental specialist. 5. Calculate Backwards from Deadline: Starting from the date you need the factory registration certificate (for supplier registration, policy funds, foreign employment, etc.), calculate backwards the approval and completion reporting schedule.
Factory establishment often gets blocked not by the requirements themselves, but by the order of steps and consistency of documents. If you are tight on schedule due to factory establishment approval and registration issues in Incheon, Songdo, and the surrounding metropolitan area, calculating backwards from the deadline is the first step. Requirements and local administration vary depending on the case, so individual verification is necessary.
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This article is reconstructed based on actual consultation cases, and the characters, names, places, and figures appearing in it are not related to any specific individuals or events.