South Korea’s free economic zone committee on Friday approved FEZ incentives for Hyundai Cummins Engine Co. that will offer various tax incentives to the joint venture for up to 15 years.

Under the decision, the company will be completely exempt from the corporate tax for five years following the start of its business here, and then be given a two-year grace period during which it will have to pay only half of its corporate tax.

It will also have its acquisition and property taxes exempt or reduced for the next 15 years, the committee said in a press release.

Hyundai Cummins is a joint venture established by South Korean shipbuilder Hyundai Heavy Industries Co. and the United States’ Cummins Inc., the world’s largest diesel engine manufacturer.

The U.S. company seeks to invest US$33 million in the joint venture to set up a facility producing diesel engines for construction equipment in an FEZ in Daegu, 300 kilometers south of Seoul. (Yonhap News)