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Regulations on business operation in Kaesong Industrial Zone

KCNA

    Pyongyang, June 30 (KCNA) -- Regulations on establishing and operating enterprises in the Kaesong Industrial Zone were adopted according to the Law on the Kaesong Industrial Zone. Tthey are aimed to establish a strict order on setting up, registering and operating enterprises in the zone to provide conveniences for business activities.
    The regulations adopted as decision no. 103 of the Presidium of the Supreme People's Assembly of the DPRK on April 24, Juche 92 (2003) has 32 articles.
    They specify points related to investors, forms of establishing an enterprise and its rules, investment period and forms, customs, the scope of business activities, distribution of profits, notice about the disorganization of an enterprise, etc.
    According to the regulations, Koreans in the south and overseas, corporate bodies, individuals and economic organizations of other countries may invest in the fields of industry, construction, transport, telecommunications, science and technology, commerce, banking, tourism, etc. in the industrial zone.
    Setting up enterprises in the fields of infrastructural construction, light industry and ultra-modern science and technology shall be specially encouraged in the industrial zone.
    An investor may invest in the industrial zone independently or in collaboration with other investors to establish enterprises of diverse forms.
    An enterprise shall have its rules and management staff and employees necessary for business activities and set up a fixed business house.
    The registered capital shall be over 10 percent of the total fund invested.
    An investor shall submit a written application for establishing an enterprise to the industrial zone management organ. It shall specify the total fund invested, registered capital, type of business and its scope, investment period, annual income and profits, etc. with an enterprise rules, a letter of confirmed capital credit, etc. attached to it.
    The investment period may be extended for six months.
    Investment may be made in cash and kind and by right of property, etc. and in this case the value of the property invested and the right of property shall be estimated at international market price at the given time.
    An investor shall submit an application for business registration to the industrial zone management organ after investing registered capital or the amount in excess of it.
    According to the rules, an enterprise may issue stock, bond, etc. bring materials necessary for the business activities into the industrial zone without restriction or take goods produced and purchased in the industrial zone out of the zone. An enterprise may make contracts with organs, enterprises and organizations in the DPRK through the central industrial zone guiding organ and purchase materials necessary for the business activities or sell products and process raw material and other materials and parts on commission.
    Its settlement of accounts shall be made bi-annually or yearly. It shall create reserve fund after paying its fixed income tax from its profits.
    An enterprise to be disorganized shall submit a notice about disorganization to the industrial zone management organ and open it to the public within ten days from the notification.
    The enterprise that has operated for over 15 years shall be exempted from its income tax for excess profits.
    The enterprise that applied for its disorganization shall not dispose of its properties at its own will before its accounts are settled. In case branch offices, business offices and individuals intend to make profits in the industrial zone, they shall be registered at the industrial zone management organ.