Suggested citations
AGLC4 | 외국인기업법 2011 [Foreign Enterprise Law of the Democratic People's Republic of Korea (2011)] [tr Daye Gang].
Bluebook | Oegugingieobbeob 2011 [Foreign Enterprise 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. 19 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 17, Juche 94 (2005), as Directive No. 1131 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 November 29, Juche 100 (2011), as Directive No. 1994 of the Presidium of the Supreme People’s Assembly
CHAPTER I. BASICS OF FOREIGN ENTERPRISE LAW
Article 1 (Objectives of Foreign Enterprise Law)
The Foreign Enterprise Law of the Democratic People’s Republic of Korea shall serve to expand and develop economic co-operation and exchange with many countries of the world through the establishment and operation of foreign enterprises.
Article 2 (Definition of foreign enterprise)
Foreign enterprises refer to enterprises that independently do business activities established by a foreign investor investing the whole of the capital required for operating the enterprise.
Article 3 (Sectors for establishing foreign enterprises and enterprises that are prohibited from establishment)
Foreign investors may establish and operate foreign enterprises in many sectors including the electronics industry, automation industry, machinery manufacture industry, food manufacture industry, garment manufacture industry, daily necessities industry, and transportation and labour. Enterprises that cause interference to the safety of a country or that are technically outdated may not be established.
Article 4 (Principle of protecting investments)
The State shall protect by law the capital invested by the foreign investor and income obtained in operating the enterprise.
Article 5 (Duty of foreign investors to adhere to regulations)
Foreign investors shall respect and thoroughly abide by the laws and regulations of our country, and must not do acts that cause inconvenience to national economic development.
Article 6 (Subject of application of law)
This law shall apply to foreign enterprises established and operating in designated areas.
CHAPTER II. ESTABLISHMENT OF FOREIGN ENTERPRISES
Article 7 (Submission of application documents to establish a foreign enterprise)
In cases where a foreign investor seeks to establish a foreign enterprise, they must submit an application document to establish a foreign enterprise to the investment management institution. An application document to establish an enterprise must include an application to establish an enterprise that states particulars such as the name and address of the enterprise, the total investment sum, registered capital, type of business, number of employees, and period of existence, and things like a copy of the bylaws, an economic and technical statement, and a credit capital confirmation document of the investor.
Article 8 (Deliberation of foreign enterprise establishment application, establishment date of an enterprise)
An investment management institution shall deliberate on the application document to establish a foreign enterprise within 30 days of the day it is received, and must approve or reject the establishment of the enterprise. In cases where the establishment of the enterprise has been approved, a foreign enterprise establishment approval document shall be issued, and in cases where it is rejected, a notice of rejection that states the reasons shall be sent to the applicant.
Article 9 (Registration of foreign enterprises)
Foreign investors must register with the given province (or municipality directly under central authority) People’s Committee or the special economic zones management institution within 30 days of receiving the foreign enterprise establishment approval document. Customs registration and tax registration shall be done within 20 days of registration with the province (or municipality directly under central authority) People’s Committee or the special economic zones management institution.
Article 10 (Establishment of branch office, office, agency)
Foreign enterprises may create things such as branch offices, offices, and agencies in our country or in other countries with the approval of the investment management institution.
Article 11 (Commission of construction)
Foreign investors may commission constructions required for establishing a foreign enterprise from a construction institution of our country.
Article 12 (Investment period)
Foreign investors must invest within the period pointed out in the foreign enterprise establishment approval document. In cases where they cannot invest within the determined period due to inevitable circumstances, they may receive the approval of the investment management institution and prolong the investment period.
Article 13 (Reasons for cancellation of foreign enterprise establishment approval)
In cases where a foreign investor has not invested in the determined investment period without a lawful reason, the investment management institution may cancel the foreign enterprise establishment approval.
CHAPTER III. BUSINESS ACTIVITIES FOR FOREIGN ENTERPRISES
Article 14 (Change in type of business)
Foreign enterprises must do business activities according to the type of business approved. In cases where the type of business is sought to be changed or extended, the approval of the investment management institution must be received.
Article 15 (Submission of production and exports and imports plan)
Foreign enterprises must submit annual and quarterly production and exports and imports plans to the investment management institution.
Article 16 (Purchases and product sales for business administration supplies)
Foreign enterprises may purchase raw materials, resources, and facilities from our country according to what has been decided, or may sell produced products to our country. In these cases, it shall be done through the investment management institution.
Article 17 (Accounts of foreign enterprises)
Foreign enterprise must have an account in a bank of our country or in an investment bank of a foreign country. With the approval of the foreign currency management institution, they may also have accounts in banks of other countries.
Article 18 (Financial accounting)
Foreign enterprises must have financial accounting documents at the enterprise. The financial management and accounting of an enterprise shall be done according to financial accounting regulations applicable to foreign investment enterprises.
Article 19 (Recruitment of labour)
Foreign enterprises shall recruit employees from labour of our country. Some managing personnel and technical experts or technical engineers of special occupations may be recruited from labour of other countries after notifying the investment management institution.
Article 20 (Workplace union organization)
Employees working at foreign enterprises may create a workplace union organization. Workplace union organizations shall protect the rights and interests of employees, shall conclude contracts related to the guarantee of working conditions with foreign enterprises, and shall supervise their fulfilment. Foreign enterprises must assure conditions for the activities of workplace union organizations.
Article 21 (Reinvestment of profits and foreign remittances)
Foreign enterprises may reinvest legal profits obtained in operating an enterprise, and may remit them outside the territory of our country according to regulations related to foreign currency management.
Article 22 (Purchase of insurance)
In cases where foreign enterprises purchase insurance, they must purchase it from an insurance company in our country.
Article 23 (Payment of tax)
Foreign enterprises may pay the designated tax. Foreign enterprises in encouraged sectors may have their income tax reduced for a constant period.
Article 24 (Exemption from customs duty)
In cases where foreign enterprises bring in supplies required for production and business activities or send out produced products, customs duty shall not be applied for them.
Article 25 (Registered capital)
Foreign enterprises may increase registered capital. Registered capital may not be reduced during the period of existence.
Article 26 (Investigation of state of investment and payment of tax)
Investment management institutions and given financial institutions may investigate the state of investment and payment of tax of foreign enterprise.
CHAPTER IV. DISSOLUTION AND DISPUTE RESOLUTION OF FOREIGN ENTERPRISES
Article 27 (Dissolution and prolongation of period of existence of enterprises)
Foreign enterprises shall be dissolved when the period of existence ends. In cases where the enterprise is sought to be dissolved or its period prolonged before its period of existence ends, the approval of the investment management institution shall be received.
Article 28 (Sanctions)
In cases where this law has been violated, sanctions shall be imposed depending on the gravity such as the levy of a penalty, suspension of operations, and dissolution of the enterprise.
Article 29 (Dissolution, registration of insolvency, treatment of property of enterprises)
In cases where foreign enterprises are dissolved or become insolvent, an application to dissolve an enterprise or make it insolvent must be submitted to the investment management institution. The property of a foreign enterprise may not be handled at will before the settlement procedure ends.
Article 30 (Dispute resolution)
Differences in opinion related to a foreign enterprise shall be resolved by method of agreement. In cases where they cannot be resolved by method of agreement, they shall be resolved by method of conciliation, arbitration, or court proceedings.
Last updated 22 November 2020