Foreigner Investment Law of the Democratic People’s Republic of Korea (2011)
AGLC4 | 외국인투자법 2011 [Foreigner Investment Law of the Democratic People's Republic of Korea (2011)] [tr Daye Gang]
Bluebook | Woegukintujabeob 2011 [Foreigner Investment Law of the Democratic People's Republic of Korea (2011)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on October 5, Juche 81 (1992), as Decision No. 17 of the Standing Committee of the Supreme People’s Assembly
Amended and supplemented on February 26, Juche 88 (1999), as Directive No. 484 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on November 30, Juche 93 (2004), as Directive No. 780 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on September 26, Juche 96 (2007), as Directive No. 2367 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 29, Juche 97 (2008), as Directive No. 2688 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on August 19, Juche 97 (2008), as Directive No. 2842 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on November 29, Juche 100 (2011), as Directive No. 1991 of the Presidium of the Supreme People’s Assembly
Article 1 (Objectives and status of Foreigner Investment Law)
The Foreigner Investment Law of the Democratic People’s Republic of Korea shall serve to encourage the investment of investors from foreign countries in our country and to protect their legal rights and interests. This law is the basic law of foreign country investment relationships.
Article 2 (Definition of terms)
1. Foreigner investment means a foreign country investor brings into our country property, property rights or technical secrets for the purpose of economic activities.
2. Foreign country investors are corporations or individuals of other countries that invest in our country.
3. Foreign country investment enterprises are foreign investment enterprises foreign country enterprises.
4. Foreign investment enterprises are contractual joint venture enterprises, equity joint venture enterprises, and foreigner enterprises established in our country.
5. Contractual joint venture enterprises are enterprises where an investor from our side and an investor from a foreign country jointly invest, our side operates it, and the investment portion of the other side is repaid or the profits are distributed according to the contract.
6. Equity joint venture enterprises are enterprises where an investor from our side and an investor from a foreign country jointly invest and jointly operate it, and the profits are distributed according to the investment portion.
7. Foreigner enterprises are enterprises where a foreign country investor invests and operates alone.
8. Foreign country enterprises are enterprises of other countries that conduct economic activities after registering with the investment management institution.
9. Foreign country investment banks are equity joint venture banks, foreigner banks, or bank branches of foreign countries established in our country.
10. Special economic zones are areas where the State has preferentially guaranteed economic activities such as investment, production, trade, and labour according to specially determined regulations.
Article 3 (Establishment of foreign investment enterprises and foreign country investment banks)
Foreign country investors may establish and operate foreign investment enterprises and foreign country investment banks in our country. In these cases, the approval of the investment management institution shall be received. Investment management institutions include the relevant central bodies and special economic zones management institutions.
Article 4 (Protection of foreign country investors’ right and interests, guarantee of business activity conditions)
The State shall protect the legal rights and interests of foreign country investors and shall assure the business activity conditions of foreign investment enterprises and foreign country investment banks.
Article 5 (Investing parties)
Corporations and individuals of other countries may invest in our country. Overseas Koreans may also invest according to this law.
Article 6 (Investment sectors and investment methods)
Foreign country investors may invest in many sectors such as industrial, agricultural, construction, transportation, communication, scientific technique, tourism, distribution, and finance in different methods.
Article 7 (Sectors to encourage investment)
The State shall especially encourage investment in sectors with modern techniques including cutting edge techniques, sectors that produce products with high competitiveness in international markets, the infrastructure construction sector, and the scientific research and technical development sector.
Article 8 (Preference of investment in encouraged sectors)
Foreign investment enterprises established by investing in encouraged sectors shall receive preferences such as the reduction of different taxes including income tax, the guarantee of profitable land use conditions, and the preferential supply of bank loans.
Article 9 (Guarantee of preferential business activity conditions in special economic zones)
The State shall assure preferential business activity conditions for foreign country investment enterprises established in special economic zones in many fields, such as purchasing supplies and entry and exit, product sales, recruitment, payment of tax, and land use
Article 10 (Guarantee of convenience of entry and exit of foreign country investors)
The State shall determine that entry and exit procedures, processes and methods for foreign country investors investing in our country shall be convenient.
Article 11 (Subjects of prohibition and restriction in investment)
Subjects where investment is prohibited or restricted are as follows.
1. Subjects that hinder the safety of the country, the health of residents, and sound societal morals
2. Subjects with the purpose of exporting resources
3. Subjects that do not conform to environmental protection standards
4. Subjects that are technically outdated
5. Subjects with little economic effectiveness
Article 12 (Investment assets and property rights)
Foreign country investors may invest using property and property rights such as property in the designated currency, property in goods, or industrial ownership rights. In these cases, the value of the invested property and property rights shall be evaluated by agreement between the parties based on international market prices at the given time.
Article 13 (Establishment of branch office, office, agency)
Foreign investment enterprises, equity joint venture banks and foreigner banks may set up a branch office, office or agency in our country or other countries or may establish a subsidiary company, and may form an alliance with companies of other countries.
Article 14 (Subjects for qualification as a corporation)
Foreign investment enterprises, equity joint venture banks, and foreigner banks are corporations of our country. However, branch offices, offices, agencies of foreign country enterprises or foreign country bank branches in our country are not corporations of our country.
Article 15 (Lease period of land)
The State shall lease land required to establish foreign country investors, foreign investment enterprises, and foreign country investment banks. The period of land lease shall be a maximum of 50 years. Leased land may be transferred or secured as collateral during the lease period with the approval of the landlease institution.
Article 16 (Recruitment of labour)
Foreign investment enterprises and foreign country investment banks must recruit employee with labour from our country. Some managing personnel, technical experts in special occupations, and technical engineers may be recruited from labour of other countries with the agreement of the investment management institution.
Article 17 (Payment of tax)
Foreign country investors, foreign investment enterprises, foreign country enterprises, and foreign country investment banks must pay taxes such as income tax, transfer tax, and property tax according to what has been decided.
Article 18 (Reinvestment of profits)
Foreign country investors may reinvest a part or the whole of profits in our country. In these cases, a part or the whole of income tax axlready paid for the reinvested portion may be returned.
Article 19 (Protection of investment assets)
The State shall not nationalize or collect the property of foreign country investors, foreign investment enterprises, and foreign country investment banks. In cases where it must inevitably be collected in related to the interests of society and the public, they must be notified ahead of time and must sufficiently compensate that value by going through the legal process.
Article 20 (Foreign remittance of profits and other income)
Legal profits and other income obtained by foreign country investors by operating their enterprise or in banking work, or funds left over after settling an enterprise or bank, may be remitted outside of the territory of our country without restriction.
Article 21 (Guarantee of secrecy over business administration)
The State shall guarantee the secrets related to the business activities of foreign investment enterprises and foreign country investment banks and must not publish them without the agreement of the foreign country investor.
Article 22 (Dispute resolution)
Differences in opinion related to foreign country investment shall be resolved by the method of agreement. In cases where they cannot be resolved by the method of agreement, they will be resolved by the methods of conciliation, arbitration, or court proceedings.
Last updated 15 August 2020
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