Suggested citations
AGLC4 | 합작법 2014 [Contractual Joint Venture Law of the Democratic People's Republic of Korea (2014)] [tr Daye Gang].
Bluebook | Hapjakbeob 2014 [Contractual Joint Venture Law of the Democratic People's Republic of Korea (2014)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on October 5, Juche 81 (1992), as Directive No. 18 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 May 23, Juche 95 (2006), as Directive No. 1774 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. 1992 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on October 8, Juche 103 (2014), as Directive No. 173 of the Presidium of the Supreme People’s Assembly
Article 1 (Objectives of Contractual Joint Venture Law)
The Contractual Joint Venture Law of the Democratic People’s Republic of Korea shall serve to expand and develop economic and technical co-operation and exchange with many countries of the world through contractual joint ventures
Article 2 (Parties to a contractual joint venture)
Institutions, enterprises and organizations may establish a contractual joint venture enterprise with corporations or individuals of other countries with the approval of the investment management institution. Contractual joint venture enterprise shall foundationally be established in the production sector.
Article 3 (Sectors encouraged for contractual joint ventures)
The State shall encourage contractual joint ventures in subjects that introduce cutting edge techniques or modern facilities, or in sectors producing products that have high competitiveness in international markets.
Article 4 (Subjects of prohibition and restriction of contractual joint ventures)
Contractual joint ventures shall be prohibited or restricted for subjects that exceed environmental protection standards, subjects that export natural resources capable of generating wealth, economically or technically inferior subjects, subjects that have little economic benefit, and subjects in labour work such as restaurants and shops.
Article 5 (Preferences for contractual joint venture investments)
The State shall give preferences such as tax reductions, guarantee of profitable land use conditions, and the preferential supply of bank loans for contractual joint venture enterprises on subjects of encouragement and contractual joint venture enterprises with overseas Koreans.
Article 6 (Application to establish, approval of contractual joint venture enterprises)
Parties seeking to establish a contractual joint venture enterprise shall conclude a contractual joint venture contract and must submit to the investment management institution application documents to establish a contractual joint venture enterprise with things like a copy of the contractual joint venture contract, a copy of the bylaws of the contractual joint venture enterprise, and an economic and technical statement attached. The investment management institution shall deliberate on the application documents to establish a contractual joint venture enterprise within 30 days of the day they have been received, and in cases where they have been approved shall issue to the applicant an approval document for the establishment of a contractual joint venture enterprise, and in cases where they have been rejected, must send a notice of rejection that states the reasons.
Article 7 (Registration of contractual joint venture enterprises)
A party who has received an approval document for the establishment of a contractual joint venture enterprise that has been issued must register the location of the enterprise with the province (or municipality directly under central authority) People’s Committee or the special economic zones management institution within 30 days. Tax registration and customs registration shall be done within 20 days from the day of registration with the province (or municipality directly under central authority) People’s Committee or the special economic zones management institution.
Article 8 (Permission to operate and date of work commencement)
Contractual joint venture enterprises must receive permission to operate within the designated scheduled date of operation. The day the operating permit issued by the investment management institution is received shall be the date of work commencement of the contractual joint venture enterprise.
Article 9 (Types of business of contractual joint venture enterprises)
Contractual joint venture enterprises must do business activities according to the approved type of business. In cases where types of business are sought to be changed or extended, the approval of the investment management institution shall be received.
Article 10 (Transfer of investment portion)
Parties to a contractual joint venture may transfer their investment portion to a third party. In these cases, the consent of the other party to the contractual joint venture and the approval of the investment management institution must be received.
Article 11 (Recruitment of labour)
Contractual joint venture enterprises must recruit employees using labour from our country. Technical experts and technical engineers of special occupations may be recruited using labour from other countries after notifying the investment management institution
Article 12 (Levy of customs duty)
In cases where a contractual joint venture enterprise brings in supplies required for production and business activities from other countries, or taking out produced products to other countries, customs duty shall not be levied. However, in cases where supplies that have received customs duty exemptions are sold in our country, customs duty shall be levied.
Article 13 (Purchase of insurance)
In cases where a contractual joint venture enterprise purchases insurance, it must purchase insurance from an insurance company in our country. Compulsory insurance shall be purchased from an insurance company determined by the central insurance guidance institution.
Article 14 (Repayment of investment and profit distribution)
Repayment of investment for investors from foreign countries in a contractual joint venture enterprise shall be founded in using the products produced by the enterprise. Profit distribution shall be done using the method determined by the contractual joint venture parties in the contract.
Article 15 (Preferential use of enterprise revenues)
Products produced and revenues obtained in the contractual joint venture enterprise may first be used in fulfilling repayment or distribution responsibilities according to the contractual joint venture contract.
Article 16 (Foreign remittance of profits and other income)
Investors from foreign countries in a contractual joint venture enterprise may remit to territory outside of our country profits received after distribution, other income, and funds received after settling an enterprise, without restriction.
Article 17 (Joint consultative body)
Contractual joint venture parties may organize a joint consultative body on a non-standing basis. The joint consultative body shall consult on important issues raised in business activities of an enterprise such as on the introduction of new techniques, increasing quality of products, and reinvestment.
Article 18 (Accounting settlement)
Contractual joint venture enterprises must regularly do account settlement for business activities. The accounting settlement document shall be submitted to the relevant financial institution within the period determined.
Article 19 (Payment of tax)
Contractual joint venture enterprises must pay the designated tax. Contractual joint venture enterprises in encouraged sectors may have their income tax reduced for a set period.
Article 20 (Dissolution of contractual joint venture enterprises)
In cases where there is a reason like the expiration of period of existence, the non-fulfilment of contractual duties, enduring business administration losses, or natural disaster, the contractual joint venture parties may agree with each other to dissolve it after receiving the approval of the investment management institution. The responsibility for damage caused by the dissolution of the contractual joint venture enterprise shall be borne by the party at fault.
Article 21 (Organization of settlement committee)
In cases where an enterprise is dissolved, the parties to a contractual joint venture must organize a settlement committee. The settlement committee shall finish the trading activities of the contractual joint venture enterprise and finish the settlement, then must do the enterprise registration cancellation procedure within 10 days. In cases where it is accepted that it is correct to making an enterprise insolvent during the settlement process, the insolvency shall be filed before the court.
Article 22 (Prolongation of period of existence of contractual joint venture enterprise)
A contractual joint venture enterprise may prolong its period of existence. In these cases, the approval of the investment management institution must be received 6 months before the period of existence ends. The period of existence shall be calculated from the day the establishment of the enterprise is approved.
Article 23 (Dispute resolution)
Differences in opinion related to a contractual joint venture shall be resolved by method of agreement. In cases where it cannot be resolved by method of agreement, it shall be resolved using the method of conciliation, arbitration, or court proceedings.
Last updated 29 September 2020