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Laws of the Republic of Korea |
05_LawsConcerningEconomicInvestment
Amended by Act No. 10232, April 5, 2010
Article 1 (Purpose)
The purpose of this Act is to promote foreign investment in Korea by providing necessary support and convenience, with the ultimate view of contributing to the sound development of the nation's economy.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 2 (Definitions)
(1) The definition of the terms used in this Act shall be as follows:
1. The term "foreigner" means an individual who is a foreign national, a corporation established in accordance with a foreign law (hereinafter referred to as "foreign corporation") or an international economic cooperative organization as prescribed by Presidential Decree;
2. The term "national of the Republic of Korea" means an individual possessing the nationality of the Republic of Korea;
3. The term "Korean corporation" means a corporation established in accordance with the laws of the Republic of Korea;
4. The term "foreign investment" means any of the following items: (a) Where a foreigner purchases, under conditions as prescribed by Presidential Decree, stocks or shares (hereinafter referred to as "stocks") of a Korean corporation (including a Korean corporation in the process of being established) or a company run by a national of the Republic of Korea, for the purpose FOREIGN INVESTMENT
PROMOTION ACT
364 Ministry of Government Legislation
of establishing a continuous economic relationship with and participating in the management of the said Korean corporation or company in accordance with this Act;
(b) Loan with maturity of not less than five years (based on the period for loan specified in the loan contract that has been made for the first time), which is supplied to a foreign-capital invested company by a person falling under any of the following sub items:
(i) Overseas parent company of the foreign-capital invested company; (ii) Company with capital investment relationship prescribed by Presidential Decree with the company in sub item (i);
(iii) Foreign investor; or
(iv) Enterprise with capital investment relationship prescribed by Presidential Decree with the investor in sub item ();
(c) Where a foreigner contributes to a nonprofit corporation pursuant to this Act, with the purpose of establishing continuous cooperative relationship with the corporation, which satisfies the standards prescribed by Presidential Decree regarding research personnel, facility, which is a corporation (including a corporation under establishment) of the Republic of Korea in the field of science and technology; or
(d) Other contributions to a nonprofit corporation made by a foreigner, which the Foreign Investment Committee pursuant to Article 27 (hereinafter referred to as the "Foreign Investment Committee") recognizes as a foreign investment in accordance with the standards on the business contents of the non-profit corporation as prescribed by Presidential Decree;
5. The term "foreign investor" means a foreigner who holds stocks or has contributed as prescribed by this Act;
6. The term "foreign-capital invested company or foreigner-contributed nonprofit corporation" means a company in which a foreign investor has invested, or a nonprofit corporation to which a foreign investor has contributed;
7. The term "operator of establishments built to improve foreign-investment environment" means any person who operates establishment, including but not limited to, schools and medical institutions, for foreigners, as prescribed by Presidential Decree, in order to improve foreign investment environment;
8. The term "object of investment" means any object in which a foreign investor Laws on Green Growth, and Economic Investment in Korea 365 05_LawsConcerningEconomicInvestment
invests in order to acquire stocks under this Act, and which falls under any of the following items:
(a) Foreign means of payment as prescribed by the Foreign Exchange Transactions Act or domestic means of payment by the exchange of the said foreign means of payment;
(b) Capital goods;
(c) Proceeds from stock acquisition in accordance with this Act; (d) Industrial property rights, intellectual property rights as prescribed by Presidential Decree, other technologies related thereto, and rights pertaining to the use of such rights or technologies;
(e) Where a foreigner closes his/her own branch company or office in Korea and then converts the branch company or office into another domestic corporation, or where a domestic corporation the stocks of which are possessed by a foreigner is dissolved, the residual property allotted to the said foreigner upon the liquidation of the said branch company, office, or corporation; (f) The amount of redemption of loans as prescribed by the provisions of subparagraph 4 (b) or of other loans from foreign countries;
(g) Stocks prescribed by Presidential Decree;
(h) Real estate located in Korea; and
(i) Other means of domestic payment as prescribed by Presidential Decree;
9. The term "capital goods" means machineries, facilities, equipments, parts, accessories, industrial facilities (including but not limited to vessels, motor vehicles, aircraft,), livestock, breeds or seeds, trees, fish and shellfish which are necessary for the development of agriculture, forestry, and fisheries, raw materials and reserve supply which are deemed necessary by the competent Minister (referring to the head of the central administrative agency in control of the project concerned) for the initial test (including pilot projects) of the facilities concerned, and fees for transportation and insurance required for the introduction thereof, and other know-how or service necessary therefor; and
10. The term "licensing agreement" means an agreement wherein a national of the Republic of Korea or a Korean corporation takes over industrial property rights or other technologies from a foreigner or introduces the rights relative to the use thereof.
(2) With respect to an individual who is of Korean nationality but holds a permanent 366 Ministry of Government Legislation
residency status in a foreign country at the time this Act is applied, the provisions of this Act concerning foreigners shall be applicable in such instance, in addition to other relevant provisions of this Act.
[This Article Wholly Amended by Act No. 9374, Jan. 30, 2009] Article 3 (Protection of Foreign Investment)
(1) With respect to the proceeds that come from the stocks acquired by a foreign investor, proceeds from the sale of stocks, the principal, interests and service charges paid in accordance with the loan contract as prescribed by the provisions of Article 2 (1) 4 (b), and the compensation paid in accordance with a license agreement, their remittance to foreign countries shall be guaranteed in accordance with the details of the permission or report of the foreign investment contract or the license agreement at the time when the said remittance is made.
(2) Except as otherwise prescribed by the acts of the Republic of Korea, foreign investors and foreign-capital invested companies shall be treated the same way as nationals of the Republic of Korea and Korean corporations with respect to their business operations.
(3) Except as otherwise prescribed by the acts of the Republic of Korea, the provisions concerning the abatement or exemption of taxes from among the tax laws applicable to nationals of the Republic of Korea or Korean corporations shall likewise be applicable to foreign investors, foreign-capital invested corporations, persons who have extended loans as prescribed by the provisions of Article 2 (1) 4 (b), and persons who have provided technology in accordance with the provisions of Article 25. [Amended by Act No. 9374, Jan. 30, 2009]
Article 4 (Liberalization of Foreign Investment)
(1) Except as otherwise prescribed by the acts of the Republic of Korea, a foreigner may conduct, without restraint, various activities relative to foreign investment in the Republic of Korea.
(2) Except for the following cases, no foreigner shall be restricted from any foreign investment as prescribed in this Act:
1. Where the activity threatens the maintenance of national safety and public order;
2. Where the activity produces harmful effects on public hygiene or the environmental preservation or is against Korean morals and customs; and Laws on Green Growth, and Economic Investment in Korea 367 05_LawsConcerningEconomicInvestment
3. Where the activity violates the acts and subordinate statutes of the Republic of Korea.
(3) The categories of business in which foreign investment is prohibited in accordance with any of the subparagraphs of paragraph (2) and the details of the prohibition, shall be prescribed by Presidential Decree.
(4) The Minister of Knowledge Economy shall, in cases where the head of the relevant administrative agency restricts foreign investment, such as treating foreigners or foreign-capital invested companies unfavorably compared to Korean nationals or Korean corporations, or charging additional liabilities to foreigners or foreign-capital invested companies, in other acts and subordinate statutes or public notifications than this Act, combine and publicly notify the details thereof every year, as prescribed by Presidential Decree. If the head of the relevant administrative agency intends to amend or supplement them, he/she shall consult in advance with the Minister of Knowledge Economy.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 4-2 (Formulation of Plan to Stimulate Foreign Investment)
(1) In order to stimulate foreign investment, the Minister of
Knowledge Economy shall
formulate a plan to stimulate foreign investment (hereinafter referred to as "stimulation
plan") every
year by consolidating and coordinating plans submitted by the heads
of competent central administrative agencies and the Special
Metropolitan City Mayor,
Metropolitan City Mayor, Do (province) Governor, Governor of a Special Self-Governing
Province (hereinafter
referred to as the "Mayor/Do Governor") in accordance with
Article 3 and finalize the plan after deliberation by the Foreign Investment
Committee.
(2) The stimulation plan shall include the following matters:
1. Basic direction of stimulating foreign investment;
2. Analysis of circumstances of foreign investment, such as trend of overseas
expansion by domestic companies, industrial structure
within the country;
3. Plan for attracting foreign investment; and
4. Plan of assisting agencies inviting foreign investment.
(3) The head of each competent central administrative agencies and the
Mayor/Do
Governor shall submit a plan to stimulate foreign investment for the following year
to the Minister of Knowledge Economy
by December 31 of every year.
inserted, Apr. 5, 2010>
(4) The Minister of Knowledge Economy, the heads of the competent central administrative
agencies, and the Mayor/Do Governor shall
submit the results of foreign investment
promotion from the previous year to the Foreign Investment Committee on or before
the
end of February of the following year, and the Foreign Investment Committee
shall evaluate them.
(6) The Mayor/Do Governor, the president of the Korea Trade-Investment Promotion
Agency, and the heads of the appropriate financial
institutions receiving such request
pursuant to Article 5 shall comply therewith unless special grounds exist to the contrary.
[Amended, Jan. 30, 2009]
[Title Amended, Apr. 5, 2010]
Article 5 (Foreign Investment by Acquiring Newly Issued Stocks)
(1) Where a foreigner intends to make an investment by means of
purchasing stocks newly
issued by a Korean corporation (including a Korean corporation in the process of
being established) or
a company run by a national of the Republic of Korea, the
foreigner shall report such fact to the Minister of Knowledge Economy
in advance,
as prescribed by Ordinance of the Ministry of Knowledge Economy. The same shall
also apply in cases of modifying any
reported details as prescribed by Presidential
Decree, such as the amount of foreign investment and the ratio thereof (referring
to
the ratio of the stocks owned by foreign investors to the total stocks of a company;
hereinafter the same shall apply).
(2) The Minister of Knowledge Economy shall, upon receipt of the report under paragraph
(1), issue a certificate of completion of
report without delay.
[Amended by Act No. 9374, Jan. 30, 2009]
Laws on Green Growth, and Economic Investment in Korea 369
05_LawsConcerningEconomicInvestment
Article 6 (Foreign Investment by Acquisition of Existing Stocks)
(1) Where a foreigner (including such persons of special relationship
as prescribed by
Presidential Decree) intends to make an investment by acquiring stocks already issued
by a company run by a national
of the Republic of Korea or a Korean corporation
(hereinafter referred to as "existing stocks), he/she shall report the fact to
the Minister
of Knowledge Economy in advance under conditions prescribed by Ordinance of the
Ministry of Knowledge Economy. The
same shall also apply in cases of modification
of any reported details as prescribed by Presidential Decree, such as the amount
of
foreign investment and the ratio thereof: Provided, That in cases where he/she acquires
existing stocks issued by a stock-listed
corporation under the Financial Investment
Services and Capital Markets Act (excluding public corporations under Article 152
(3)
of the same Act and corporations which are prohibited to acquire stocks under
separate acts), he/she may report such fact or modification
within 30 days after such
acquisition.
(5) The Minister of Knowledge Economy shall consult with the competent minister before
he/she makes the determination on permission
under the provisions of paragraph (4).
(6) Where the Minister of Knowledge Economy deems it necessary, he/she may attach
conditions
to the permission under the provisions of paragraph (4).
(7) Any person who has acquired existing stocks in violation of the provisions
of
paragraphs (3) and (6), shall not be allowed to exercise his/her voting rights of such
existing stocks, and the Minister of
Knowledge Economy may order said person to
transfer the relevant existing stocks to a third party under conditions prescribed by
370 Ministry of Government Legislation
Presidential Decree.
(8) Necessary matters for the acquisition of existing stocks by a foreigner other than those
prescribed by the provisions of paragraphs
(1) through (7) shall be prescribed by a
Presidential Decree.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 7 (Acquisition of Stocks. through Mergers)
(1) Where a foreigner makes a foreign investment by any of the following means,
he/she
shall report the fact to the Minister of Knowledge Economy:
1. Where a foreign investor has acquired stocks issued at the time of the capitalization
of reserves, revaluation reserves or other
reserves as prescribed by other acts and
subordinate statutes of the foreign capital invested company;
2. Where a foreign investor acquires stocks of a newly incorporated corporation or
a surviving corporation after a merger, the all
inclusive stock swap or transfer,
or a company division with the stocks he/she is holding at the time of the relevant
foreign-invested
company's merger, all-inclusive stock swap or transfer with another
company, or a company division;
3. Where a foreigner has acquired stocks of a foreign-capital invested company
registered in accordance with the provisions of Article
21 by means of purchase,
inheritance, testamentary gift, or gift from a foreign investor;
4. Where a foreign investor has acquired stocks by means of investing the proceeds
from the stocks which were acquired under the
laws of Korea; and
5. Where a foreigner has acquired stocks using convertible bonds, exchangeable bonds,
stock depositary receipts, and such other similar
ones as may be converted into,
available for the acceptance of, or can be exchanged for stocks
(2) The Minister of Knowledge Economy
shall, upon receipt of the report under paragraph
(1), issue a certificate of completion of report without delay.
[Amended by Act
No. 9374, Jan. 30, 2009]
Article 8 (Foreign Investment in Form of Long-Term Loan)
(1) Where a foreigner intends to make a foreign investment as prescribed
by the provisions
of Article 2 (1) 4 (b), he/she shall report such fact in advance to the Minister of
Knowledge Economy under conditions
prescribed by Ordinance of the Ministry of
Knowledge Economy. The same shall also apply in cases of modification of any
Laws on
Green Growth, and Economic Investment in Korea 371
MEASURES FOR SUPPORTING FOREIGN INVESTMENTCHAPTER III
05_LawsConcerningEconomicInvestment
reported details as prescribed by Presidential Decree, such as the amount of loan
inducement and loan conditions.
(2) Where a report has been made in accordance with the provisions of paragraph (1),
the Minister of Knowledge Economy shall issue
relevant certificate of completion of
report without delay.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 8-2 (Foreign Investment in Form of Contribution)
(1) Where a foreigner intends to make a foreign investment falling under
Article 2 (1)
4 (c) and (d), he/she shall report the fact to the Minister of Knowledge Economy,
as prescribed by Ordinance of the
Ministry of Knowledge Economy. The same shall
also apply in cases of modification of any reported details as prescribed by Presidential
Decree, such as contribution amount and conditions for contribution.
(2) The Minister of Knowledge Economy shall, upon receipt
of the report under paragraph
(1), issue a certificate of completion of report without delay.
[Amended by Act No. 9374, Jan. 30,
2009]
Article 9 (Tax Abatement and Exemption for Foreign Investment)
For foreign investments, taxes, such as corporate tax, income tax,
acquisition tax,
registration tax, property tax and aggregate land tax, may be abated or exempted under
conditions prescribed by
the Restriction of Special Taxation Act Restriction of Special
Taxation Act.
[Amended by Act No. 9374, Jan. 30, 2009]
Articles 10 through 12 Deleted.
government; hereafter in this Article referred to as "local public enterprises") may allow
foreign-invested companies or the operators
of establishments founded to improve the
foreign-investment environment (hereafter in this Article and Article 14 referred to
as
"foreign-invested companies") to use, profit from, or lease (hereinafter referred to
as "lease") land, factories, or other property
(hereinafter referred to as "land") owned
by the State, local governments, public institutions or local public enterprises, or may
sell the land to foreign-invested companies or the operators of establishments founded
to improve the foreign-investment environment,
through free contracts, notwithstanding
the applicable provisions of the State Properties Act, the Public Property and
Commodity
Management Act or the Act on the Management of Public Institutions,
Urban Development Act, Act on the Development and Management
of Logistics
Facilities, or other applicable acts and subordinate statutes. 1. Articles 35 (1) and 46 (1) of the State Properties Act;
2. Articles 21 (1) and 31 (1) of the Public Property and Commodity Management
Act; and
3. Article 69 (2) of the Urban Development Act.
(3) Where the land owned by the State or a local government is leased in accordance
with the provisions of paragraph (1), the building of a factory and/or other permanent
facilities on the land may be allowed, notwithstanding
the provisions of Article 18
of the State Properties Act and Article 13 of the Public Property and Commodity
Management Act. In
such cases, the land may be leased on condition that the factory
and/or other facilities in question be transferred free of charge
to the State or a local
government, or be removed completely so that the land may be given back to the
State or a local government
in its original state at the time of the completion of the
lease for the land, in consideration of the type of factory and/or other
facilities
concerned.
(4) The rental payments for the land which has been leased in accordance with the
provisions of paragraph (1) shall be prescribed
by Presidential Decree and may be
denominated in a foreign currency where necessary, notwithstanding the provisions
of any of the
following subparagraphs: 1. Articles 32 (1) and 47 of the State Properties Act;
Laws on Green Growth, and Economic Investment in Korea 373
05_LawsConcerningEconomicInvestment
2. Articles 22, 32, and 35 of the Public Property and Commodity Management Act;
3. Articles 26 and 69 of the Urban Development Act; and
4. Article 50 of the Act on the Development and Management of Logistics Facilities.
(5) Where foreign-invested companies intending
to purchase the land in accordance with
the provisions of paragraph (1), are acknowledged to have difficulty in making a
lump-sum
payment of the purchase price, the payment may be deferred or made in
installments, under conditions prescribed by Presidential
Decree, notwithstanding the
provisions of Article 50 (1) of the State Properties Act, Article 37 of the Public Property
and Commodity
Management Act, and Article 39 (3) of the Act on the Management
of Public Institutions.
(6) The Minister of Strategy and Finance or the administrative agency in charge of
managing the State properties may, where he/she/it
leases to a foreign-capital invested
company operating the business prescribed by Presidential Decree State-owned land,
etc. which
falls under any of the following subparagraphs, reduce or exempt the rental
payments of the leased land, etc., under conditions
prescribed by Presidential Decree
through consultation with the Minister of Knowledge Economy, notwithstanding the
provisions of
Article 38 of the Industrial Sites and Development Act:
1. Land located within a foreign investment zone as prescribed by the provisions of
Article 18;
2. Land located within a national industrial complex as prescribed by the provisions
of Article 6 of the Industrial Sites and Development
Act (hereinafter referred to
as "national industrial complex"); and
3. Land located in general industrial complexes, up-to-date city industrial complexes,
and agricultural and industrial complexes
provided in Articles 7, 7-2 and 8 of the
Industrial Sites and Development Act.
(7) In the event that the state-owned land is leased to any operator of establishments
founded to improve the foreign-investment
environment, the Minister of Strategy and
Finance or the administrative agency in charge of managing the State properties may
reduce
or exempt rental payments for the leased land under conditions as prescribed
by Presidential Decree, notwithstanding the provisions
of Articles 32 (1) and 47 of
the State Properties Act.
Management Act.
(9) Where the land which is leased to any foreign-invested company with its rental
payments reduced or exempted in accordance with
the provisions of paragraphs (6)
through (8) is located within an industrial complex prescribed by the provisions of
subparagraph
5 of Article 2 of the Industrial Sites and Development Act, the term
of lease may be up to 50 years notwithstanding the provisions
of Article 38 of the
said Act.
(10) The term of lease under the provisions of paragraphs (2) and (9) may be renewed.
The renewed term of lease in such cases may
not exceed the term as prescribed by
the provisions of paragraphs (2) and (9) for each renewal.
[Amended, Jan. 30, 2009]
Article 14 (Support for Foreign Investment Inducement Activities of Local
Governments)
(1) Where a local government requests the State to provide funds necessary for the
formation of a foreign investment zone prescribed
by the provisions of Article 18,
the state shall provide, to the maximum extent possible, loan for the purchase of land
to be leased
to any foreign-invested company, reduction or exemption from the rental
payments of land, reduction of lot prices (including such
cases where a local
government provides the money, where any person prescribed by Presidential Decree
leases the land to any foreign
invested company with the rental payments reduced
or exempted or sells at a price lower than the land preparation costs, for the
portion
corresponding to the amount of the rental payments reduced or exempted as such
or to the difference between the land preparation
costs and the lot prices), and payment
of various kinds of subsidies, such as the education and training subsidy, and other
foreign
investment inducement projects.
(2) The criteria and procedures for the provision of funds by the State to a local
government in accordance with the provisions
of paragraph (1) shall be determined
by the Foreign Investment Committee, as prescribed by Presidential Decree. In
determining
the criteria for the provision of funds in such cases, the degree of efforts
made by a local government for the inducement of foreign
investment and the actual
results thereof shall be taken into consideration.
(3) The State shall estimate the amount of funds to
be provided, in accordance with the
provisions of paragraph (1) each year, and then include the estimated amount in its
budget.
Laws on Green Growth, and Economic Investment in Korea 375
05_LawsConcerningEconomicInvestment
(4) Where necessary for the purpose of promoting the inducement of foreign investment or
improving foreign investment environment,
a local government may pay a foreign-capital
invested company an employment subsidy, as determined by Presidential Decree under
conditions prescribed by its Municipal Ordinances.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 14-2 (Funding for Foreign Investment)
(1) In the event any foreigner makes a foreign investment under any of the following
subparagraphs, the State and local governments
may provide the funding required for
such purposes as prescribed by Presidential Decree, including the construction of new
factories,
taking into account whether the foreign investment accompanies high
technology, the effect of technology transfer, the degree of
job creation, possible
overlapping of the foreign investment with any domestic investment, and the propriety
of the location in
which the foreign investment is made: 1. In cases of newly installed or expanded factory facilities (referring to the workplace
in cases of other business than the manufacturing
business) developed in order to
run the business provided in Article 121-2 (1) 1 of the Restriction of Special Taxation
Act;
2. In cases of newly installed or expanded factory facilities developed in order to
produce components and materials as provided
in subparagraph 1 of Article 2 of
the Act on Special Measures for the Promotion of Specialized Enterprises for
Components and Materials
and as prescribed by Presidential Decree;
3. In cases of newly installed or expanded factory facilities (referring to the workplace
in cases of other business than the manufacturing
business) of which new employment
exceeds the number of ordinary workers as prescribed by Presidential Decree;
4. In cases where five or more full-time research staff with masters' or higher degrees
in the field related to a project pursuant
to Article 121-2 (1) 1 of the Restriction
of Special Taxation Act (hereafter in this subparagraph referred to as "project"),
or
persons with bachelors' degrees related to the project having not less than three
years of career research experience, are employed
under the following conditions:
(a) Where a research facility is newly installed or enlarged in order to conduct
research and development
activities for the project; or
(b) Where a nonprofit corporation that has received contributions pursuant to
Article 2 (1) 4 (c)
is newly installing or enlarging research facilities; or
376 Ministry of Government Legislation
5. In cases where it is an investment that has a substantial effect on the domestic
economy relative to the amount of investment,
which the Foreign Investment
Committee recognizes as necessary in accordance with the requirements of foreign
investors as prescribed
by Presidential Decree.
(2) The amount of funding referred to in paragraph (1) shall be determined after negotiations
with the foreign investor and deliberations
of the Foreign Investment Committee.
(3) Necessary matters concerning methods and procedures for furnishing the funding
referred
to in paragraph (1) shall be prescribed by Presidential Decree.
(4) In the event that any local government provides a foreigner
with the funding referred
to in paragraph (1), such local government may prescribe matters other than those
prescribed in paragraph
(3), concerning the decision on the provision of the funding,
the methods of calculating limits on the funding, procedures for negotiating
the
investment support with foreigners and other necessary matters, by Municipal
Ordinances.
[Amended, Jan. 30, 2009]
[This Article shall be effective until December 31, 2012 in accordance with the provisions
of Article 2 of the Addenda of Act No.
10232 (Apr. 5, 2010)]
Article 14-3 (Bounty for Inducing Foreign Investment)
(1) The head of a local government may pay a bounty
to a person who is recognized
as being greatly credited with inducing foreign investment according to his/her
inducement records
under conditions prescribed by Municipal Ordinances of the
relevant local government.
(2) The head of a public agency may pay a bounty to a person who is recognized as
being greatly credited with inducing foreign investment,
according to the standards
that the Minister of Knowledge Economy sets after going through deliberations of
the Foreign Investment
Committee, in proportion to the actual results of the inducement
of foreign investment: Provided, That the bounty shall not be paid
in the overlap
the bounty referred to in paragraph (1).
[Amended by Act No. 9374, Jan. 30, 2009]
Article 15 (Establishment of Foreign Investment Support Center)
(1) A Foreign Investment Support Center (hereinafter referred to
as the "Investment
Support Center") shall be established within the Korea Trade-Investment Promotion
Agency in order to provide
or conduct consultations, guidance, publicity, surveys,
Laws on Green Growth, and Economic Investment in Korea 377
05_LawsConcerningEconomicInvestment
research, and ways of handling of civil petitions either directly or by proxy concerning
foreign investment, ways of nurturing business
starts-ups, and comprehensive support
measures for foreign investors and foreign-capital invested companies.
(2) Where necessary to properly conduct foreign investment business, the head of the
Korea Trade-Investment Promotion Agency may
request the competent administrative
agencies, corporations, or organizations involved in foreign investment (hereinafter
referred
to as "foreign-investment related agencies") to dispatch their public officials
or officers and employees to render service at the
Investment Support Center: Provided,
That where the service of public officials is required, prior consultation with the
competent
minister shall be made.
(3) Where necessary to efficiently manage duties related to foreign investment by foreign
investors or foreign-invested enterprises,
the head of the Korea Trade-Investment
Promotion Agency may request the head of a competent administrative agency to
establish
a sub-branch of the agency within the Investment Support Center. In such
cases, the head of said agency shall comply unless justifiable
reasons exist to the
contrary.
(4) The Investment Support Center shall be run mainly by officers and employees of
the Korea Trade-Investment Promotion Agency who
have considerable knowledge and
experience in foreign investment, and public officials or the officers and employees
of foreign-investment
related agencies dispatched to the Investment Support Center
in accordance with the provisions of paragraph (2) (hereinafter referred
to as
"dispatched officers") shall render their support for the business matters of the
Investment Support Center.
(5) The head of a competent administrative agency or a foreign-investment related agency
to whom a request for the dispatch of public
officials or officers or employees has
been made in accordance with the provisions of paragraph (2), shall select those who
are
well-suited for the business matters in question and dispatch them, unless justifiable
reasons exist to the contrary, and in case
where he/she intends to recall the dispatched
personnel before their term of service expires, he/she shall consult in advance with
the head of the Korea Trade-Investment Promotion Agency.
(6) The head of a competent administrative agency or a foreign-investment
related agency
who dispatches public officials or officers or employees under his/her jurisdiction in
accordance with the provisions
of paragraph (2) may give preferential treatment to
the dispatched officers in terms of their promotion, position transfer, rewards,
and
378 Ministry of Government Legislation
welfare.
(7) Where necessary to conduct the business as prescribed by the provisions of paragraph
(1), the head of the Korea Trade-Investment
Promotion Agency may request the
competent administrative agency or the foreign-investment related agency to render
cooperation,
and the head of said agency shall comply unless justifiable reasons exist
to the contrary.
(8) Deleted
(9) Necessary matters for the organization and operation of the Investment Support Center
shall be prescribed by Presidential Decree.
[Title Amended, Apr. 5, 2010]
Article 15-2 (Ombudsman for Foreign Investment)
(1) For the purpose of facilitating the settling of grievances of foreign investors and
foreign-capital invested companies, foreign
ombudsmen may be commissioned from
among persons with extensive knowledge and experience in the foreign investment
business.
(2) The foreign ombudsmen under paragraph (1) (hereinafter referred to as "foreign
ombudsmen") shall be commissioned by the President
at the recommendation of the
Minister of Knowledge Economy and after deliberation of the Foreign Investment
Committee.
(3) Any foreign ombudsman may, when necessary to facilitate the settling of grievances
of foreign investors and foreign-capital
invested companies, request the head of a
competent administrative agency or a foreign-investment related agency (hereinafter
referred
to as "competent administrative agencies") to render cooperation falling under
any of the following subparagraphs. In such cases,
the head of said administrative
agency shall comply with the request, unless justifiable reasons exist to the contrary:
1. Provision of explanation about competent administrative agencies or submission of
data under the standards as prescribed by Presidential
Decree;
2. Provision of opinions by appropriate employees and interested parties; and
3. Cooperation for field visits.
(4) Any foreign ombudsman may, when necessary as a result of settling grievances of
foreign investors
and foreign-capital invested companies, recommend essential
Laws on Green Growth, and Economic Investment in Korea 379
05_LawsConcerningEconomicInvestment
improvements to the head of a competent administrative agency or a public institution.
(5) Any foreign ombudsman shall neither use data received from the head of a competent
administrative agency under paragraph (3),
or secrets learned in the course of
conducting business for any other purpose than those prescribed in this Act, nor reveal
them
to any third party.
(6) Any foreign ombudsman shall be deemed to be a public official when applying the
penal provisions under Articles 129 through
132 of the Criminal Act.
(7) A grievance settlement organization shall be established within the Korea Trade-Investment
Promotion Agency to assist foreign
ombudsmen.
[Title Amended, Apr. 5, 2010]
Article 16 (Foreign Investment Promotion Offices)
(1) Every central administrative agency, Special Metropolitan City, Metropolitan
Cities,
Dos, Special Self-Governing Province, and Si/Gun/Gu (referring to the autonomous
Gu) may each designate an office in charge
of foreign investment, as the foreign
investment promotion office, or establish a foreign investment promotion office, for
the
purpose of rendering efficient support for foreign investment by encouraging the
smooth handling of civil petitions concerning permission,
authorization, licensing,
approval, designation, revocation, reporting, recommendation, and consultation related
to foreign investment
(hereinafter referred to as "permission"), facilitating prompt
handling of grievances of foreign investors and foreign-capital invested
companies,
and establishing cooperative systems with related agencies.
(3) Necessary matters concerning the functions and business of the foreign investment
promotion office, other than those as prescribed
by the provisions of paragraphs (1)
and (2), shall be prescribed by Presidential Decree.
380 Ministry of Government Legislation
[Amended, Jan. 30, 2009]
Article 17 (Special Cases concerning Treatment of Civil Petitions by Foreign
Investors)
(1) Where a foreign investor or a foreign-capital invested company has been granted
permission, in the left column of the attached
Table 1, he/she/it shall be deemed to
have been granted the permission in the right column of the same Table.
(2) Any dispatched officer may directly treat civil petitions which are related to foreign
investment of a foreign investor or a
foreign-capital invested company and prescribed
by Presidential Decree (hereinafter referred to as "civil petitions to be directly
treated").
In such cases, the head of the relevant administrative agency where the dispatched
officer belongs shall entrust such
civil petitions and give the dispatched officer the
authority to make approvals.
Laws on Green Growth, and Economic Investment in Korea 381
05_LawsConcerningEconomicInvestment
(5) Notwithstanding the relevant provisions of other acts and subordinate statutes, the head
of a civil affairs administrative agency
or a dispatched officer shall treat civil petitions
to be treated in bulk (referring to those civil petitions relating to the permission,
etc.
which appears on the right column of the attached Table 1, which have been received
individually), civil petitions to be individually
treated, and civil petitions to be directly
treated, within the treatment period as prescribed by Presidential Decree. In cases
where
the head of a civil affairs administrative agency or a dispatched officer fails to notify
the relevant person of his/her
rejection of the application for permission within the
treatment period, the permission shall be regarded as having been granted
as of the
day immediately following the last day of the treatment period. In such cases, if the
head of a civil affairs administrative
agency or the dispatched officer intends to reject
the application for permission within the treatment period, he/she shall notify
the
relevant foreign investment promotion official, foreign investor, or foreign-capital
invested company in writing the reasons
for the rejection under conditions prescribed
by Presidential Decree.
(8) The provisions of paragraph (7) shall apply mutatis mutandis to the consultation
prescribed by the provisions of paragraph (4).
FOREIGN INVESTMENT ZONECHAPTER IV
as prescribed by Ordinance of the Ministry of Knowledge Economy, notwithstanding
the provisions of other acts and subordinate statutes.
(10) With respect to the permission relating to civil petitions to be treated in bulk, even when
some of the requirements for the
grant of the said permission, such as documents to
be attached, have not been met, the head of a civil affairs administrative agency
may grant
the permission on the condition that the requirements which have not been met be completed,
as prescribed by Presidential
Decree.
1. Civil petitions to be treated in bulk;
2. Civil petitions to be individually treated;
3. Civil petitions to be directly treated; and
4. Other civil petitions relating to the permission under this Act.
(12) Deleted.
(13) Necessary matters, other than those prescribed by the provisions of paragraphs (1)
through (11), for the treatment of civil
petitions relating to foreign investment shall
be determined by Presidential Decree.
Article 18 (Designation and Development of Foreign Investment Zone)
(1) The Mayor/Do Governor, after deliberations with the Foreign
Investment Committee,
may designate a zone falling under each of the following subparagraphs as a foreign
investment zone (hereinafter
referred to as "foreign investment zone"). In such cases,
if a foreign investment zone falling under subparagraph 2 is to be developed
into a
general industrial complex and up-to-date city industrial complex as prescribed by
Laws on Green Growth, and Economic Investment
in Korea 383
05_LawsConcerningEconomicInvestment
Articles 7 and 7-2 of the Industrial Sites and Development Act, a development plan
shall be established in advance: 1. A zone exclusively for the purpose of leasing or transferring lands to foreign-capital
invested companies from among national
industrial complexes under Article 6 of
the Industrial Sites and Development Act and general industrial complexes under
Article
7 of the same Act;
2. A zone in which any foreign investor hopes to make an investment that meets the
standards set by Presidential Decree;
3. A zone exclusively for the purpose of leasing or transferring lands to foreign-capital
invested companies conducting research
and development, from among zones
(including the buildings therein, hereinafter the same applies in this subparagraph)
designated
by Presidential Decree, including the special research and development
zones under subparagraph 1 of Article 2 of the Special Act
on the Support of Daedeok
Special Research and Development Zone; and
4. After consultation with the head of a competent central administrative agency, a
zone (including the buildings therein) for the
purpose of leasing or transferring lands
to foreign-capital invested companies engaged in any service industry that has high
added
value, such as finance and is designated by Presidential Decree. In such cases,
when it is deemed necessary for attraction of foreign
investment, an area no larger
than the ratio set by Presidential Decree from the entire designated area (in case
of a building,
the area of all the floors) may be leased or transferred to a company
that engages in the same industry as a foreign-capital invested
company. In such
cases, if a foreign investment zone falling under subparagraph 2 is to be developed
into a general industrial
complex and up-to-date city industrial complex as prescribed
by Articles 7 and 7-2 of the Industrial Sites and Development Act,
a development
plan shall be established in advance.
(2) In cases where two or more foreign investors intend to obtain the designation of a
zone referred to in paragraph (1) 2 as a
foreign investment zone, in accordance with
the former part other than each subparagraph of paragraph (1) from the Mayor/Do
Governor,
the business classification and zone of the investment by such foreign
investors shall satisfy the standards as prescribed by Presidential
Decree.
(3) Where the Mayor/Do Governor designates a zone referred to in subparagraphs 1 to
4 of paragraph (1) as a foreign investment
zone in accordance with the former part
other than each subparagraph of paragraph (1), he/she shall make a designation plan
which
includes the information falling under each of the following subparagraphs and
384 Ministry of Government Legislation
submit it to the Minister of Knowledge Economy: 1. Purpose, official title, location, and scope of the foreign investment zone;
2. Industries to be attracted to the zone and qualifications of companies that can move in;
3. Costs associated with the designation of the zone and expected effects;
4. Methods of development or management;
5. Execution methods and period of the project to form the zone; and
6. Matters prescribed by Presidential Decree according to the characteristics of each
zone such as the use of land and overpopulation
prevention.
(4) Where the Mayor/Do Governor designates a foreign investment zone pursuant to the
provisions of paragraphs (1) and
(2), he/she shall make public notice of the following
matters:
1. Official title, location, and area of the foreign investment zone;
2. Methods of development or management;
3. Matters to be publicly announced under Article 7-4 of the Industrial Sites and
Development Act (limited to cases where the foreign
investment zone is to be
developed into a general industrial complex or an up-to-date city industrial complex);
4. Details of investment, scale of employment, and details of business of foreign-invested
enterprises that are going to move into
the foreign investment zone; and
5. Other matters prescribed by Presidential Decree.
(5) Any foreign investment zone that is designated in any national industrial
complex
from among the industrial complexes shall be managed by the management agency
of the relevant national industrial complex.
Any foreign investment zone that is
designated in any industrial complex other than the national industrial complexes shall
be
managed by the competent Mayor/Do Governor. Any foreign investment zone that
is designated in an area other than industrial complexes
shall be developed and
managed by the competent Mayor/Do Governor.
the development plan pursuant to the latter part other than each subparagraph of
paragraph (1) shall be deemed to be a development
plan pursuant to Articles 7 (2)
and 7-2 (4) of the Industrial Sites and Development Act, and the public notice pursuant
to paragraph
(4) shall be deemed to be a public notice pursuant to Article 7-4 of
the Industrial Sites and Development Act.
(10) Where the Mayor/Do Governor intends to alter any matter, notice of which has been
made public pursuant to paragraph (4), he/she
shall go through a deliberation with
the Foreign Investment Committee: Provided, That this shall not apply to trivial
alterations
as prescribed by Presidential Decree.
(12) Necessary matters for the development and management referred to in paragraph
(5) shall be prescribed by Presidential Decree.
Article 18-2 (Revocation of Designation of Foreign Investment Zones)
(1) The Mayor/Do Governor shall, in cases where a foreign-capital
invested company
or foreign investment zone fails to satisfy the standards prescribed by Presidential
Decree under Article 18 (1)
and (2), revoke the designation of the foreign investment
zone after the deliberation of the Foreign Investment Committee.
(2) Necessary matters concerning the procedures on the revocation of designation of a
386 Ministry of Government Legislation
foreign investment zone under paragraph (1) shall be prescribed by Presidential Decree.
[Amended, Jan. 30, 2009]
Article 19 (Support Measures for Foreign Investment Zones)
(1) With respect to the liability for the costs of the development of
a foreign investment
zone and support for infrastructures, such as harbors, roads, water-supply facilities,
railways, communications,
and electric facilities, which are needed for the efficient
formation of a foreign investment zone, the provisions of Articles 28
and 29 of the
Industrial Sites and Development Act shall apply mutatis mutandis.
(2) Construction of facilities in a foreign investment
zone shall be exempted from the
traffic generation charge, as prescribed by the provisions of Article 36 of the Urban
Traffic Improvement
Promotion Act.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 20 (Special Cases concerning Other Acts)
(1) The provisions of Article 56 (1) 4 of the National Land Planning and Utilization Act
shall not apply to the partitioning of
land within a foreign investment zone.
(2) With respect to a foreign-capital invested company that moves into a foreign investment
zone, the restrictions on export or import may be relaxed under conditions prescribed
by the Minister of Knowledge Economy, notwithstanding
the provisions of Article
11 of the Foreign Trade Act.
(3) With respect to any foreign-capital invested company that moves into a foreign
investment zone, the provisions of the following
subparagraphs shall not apply:
1. Article 30 of the Act on the Promotion of Collaborative Cooperation between Large
Enterprises and Small-Medium Enterprises; and
2. Article 33-2 (1) of the Act on the Honorable Treatment and Support of Persons,
etc. of Distinguished Services to the State, Article
24-2 (1) of the Act on the
Honorable Treatment of Persons of Distinguished Services to the 518 Democratization
Movement, and Article
21 (2) of the Act on Assistance to the Persons Engaged
in Special Military Missions and Establishment of Their Organizations.
(4)
A foreign-capital invested company that moves into a foreign investment zone may
newly install, expand, or move a factory covering
an area of 500(including a
knowledge industry center) in a growth administration zone or change its business
type, notwithstanding
the provisions of the main text of Article 20 (1) of the Industrial
Laws on Green Growth, and Economic Investment in Korea 387
FOLLOW-UP MANAGEMENT OF FOREIGN INVESTMENTCHAPTER V
05_LawsConcerningEconomicInvestment
Cluster Development and Factory Establishment Act.
[Article 20 (3) 2 shall be effective until December 31, 2011]
Article 21 (Follow-Up Management of Foreign Investment)
(1) Foreign
investor or a foreign-capital invested company which falls under any of the
following subparagraphs (including cases falling under
any of the following
subparagraphs due to capital increase), shall effect the registration of a foreign-capital
invested company
under the conditions prescribed by Presidential Decree:
1. Where he/she/it has completed the payment for the object of investment;
2. Where he/she/it has acquired the existing stocks (referring to having paid for the
existing stocks) in accordance with the provisions
of Article 6;
3. Where he/she/it has acquired stocks under Article 7 (1) 5; or
4. Where he/she/it has completed contribution under Article 8-2.
(2) Any foreign investor or any foreign-capital invested company
may, even prior to the
completion of payment for the object of investment under paragraph (1) 1 or even
prior to the settlement
of the price for the acquisition of the existing stocks under
paragraph (1) 2, in cases where he/she/it has made a foreign investment
corresponding
to Article 2 (1) 4 (a), effect the registration of a foreign-capital invested company.
(3) Where a foreign investor
or a foreign-capital invested company falls under any of
the following subparagraphs, the Minister of Knowledge Economy may revoke
the
permission or cancel the registration thereof:
1. Where a foreign-capital invested company, which was registered in accordance with
the provisions of paragraph (1) has closed its
business or has not conducted its
business activities for at least two consecutive years;
2. Where a foreign-capital invested company which was registered in accordance with
the provisions of paragraph (1) or a foreign
investor who was granted permission
in accordance with the provisions of Article 6 (3) has not complied with a correction
order
or has not carried out other necessary measures in accordance with the
provisions of Article 28 (5);
3. Where there are reasons for the dissolution of a foreign-capital invested company
388 Ministry of Government Legislation
which was registered in accordance with the provisions of paragraph (1);
4. Where a foreign investor or a foreign-capital invested company has applied for the
cancellation of registration under conditions
as prescribed by Presidential Decree;
5. Where a foreign investor or a foreign-capital invested company has transferred or
lent the registration certificate of a foreign-capital
invested company to another
person; and
6. Where a foreign investor or a foreign-capital invested company has effected the
registration of a foreign-capital invested company
under the pretext of payment
of the object of investment.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 22 (Restrictions on Disposal of Capital Goods)
(1) Where a foreign investor or a foreign-capital invested company intends
to transfer
or lend capital goods which he/she/it introduced into Korea with their customs duties
exempted in accordance with the
provisions of Article 9, or use them for purposes
other than those already reported, he/she/it shall report such fact in advance
to the
Minister of Knowledge Economy, except for such cases prescribed by Presidential
Decree.
(2) The Minister of Knowledge Economy shall, upon receipt of the report under paragraph
(1), issue a certificate of completion of
report without delay.
(3) Except in cases which meet the criteria prescribed by Presidential Decree, a foreign-capital
invested
company which has been registered shall not conduct any of the following acts:
1. Conducting business beyond its allowed limit, where foreign investment is prohibited
in accordance with the provisions of Article
4 (3); and
2. Acquiring stocks of another domestic company which conducts business, beyond
the allowed limit, where foreign investment is restricted
in accordance with the
provision of Article 4 (3).
(4) A foreign investor or a foreign-capital invested company shall not use their investment
funds for purposes other than those
already reported or permitted.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 23 (Transfer of Stocks)
(1) A foreign investor who intends to transfer to a third party stocks acquired in accordance
with the provisions of Articles 5
through 7, or intends to decrease the stocks owned
Laws on Green Growth, and Economic Investment in Korea 389
05_LawsConcerningEconomicInvestment
due to a reduction in his/her own capital, shall report the fact to the Minister of
Knowledge Economy under the conditions prescribed
by Presidential Decree.
(2) A foreign investor, in cases where his/her permission has been revoked or his/her
registration has
been cancelled in accordance with the subparagraphs of Article 21
(3), shall transfer the stocks owned to a national of the Republic
of Korea or a Korean
corporation within six months from the day the permission is revoked or the registration
is cancelled: Provided,
That in cases where there exist unavoidable circumstances,
he/she may extend the transfer period up to six months with the approval
of the
Minister of Knowledge Economy.
(3) A foreign investor who failed to perform the registration as prescribed by the provisions
of Article 21 (1) and failed to comply
with the correction order pursuant to Article
28 (5), shall transfer the stocks owned to a national of the Republic of Korea or
a Korean corporation within six months from the day on which the period for carrying
out the said correction order expires: Provided,
That in cases where there exist
unavoidable circumstances, the foreign investor may extend the transfer period up
to six months
subject to the approval of the Minister of Knowledge Economy.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 24 (Collection and Preparation of Statistics on Foreign Investment)
(1) The Minister of Knowledge Economy may request the
Mayor/Do Governor, the head
of the Korea Trade-Investment Promotion Agency, and foreign-capital invested
companies to provide necessary
materials and statistics for the analysis of the effects
of foreign investment on the nation's economy in terms of economic growth,
balance
of international payment, and employment.
(2) The Mayors/Do Governors, the head of the Korea Trade-Investment Promotion
Agency, and foreign-capital invested companies requested
to provide materials and
statistics as prescribed by the provisions of paragraph (1) shall comply with the request
unless there
exists any special ground to the contrary.
(3) The public officials who collect and prepare materials and statistics on foreign
investment in accordance with the provisions of paragraphs (1) and (2), shall not reveal
any business secret of the companies concerned.
[Amended by Act No. 9374, Jan. 30, 2009]
390 Ministry of Government Legislation
LICENSING AGREEMENTCHAPTER VI
SUPPLEMENTARY PROVISIONSCHAPTER VII
Article 25 (Report on Licensing Agreements)
(1) A national of the Republic of Korea or a Korean corporation which has concluded
any licensing agreement with a foreigner as
prescribed by Presidential Decree, shall
report the fact to the Minister of Knowledge Economy under the conditions prescribed
by
Ordinance of the Ministry of Knowledge Economy. The same shall also apply
in cases of modification of any reported details of a
license agreement.
(2) The Minister of Knowledge Economy shall, upon receipt of the report under paragraph
(1), issue a certificate
of completion of report within the period prescribed by
Presidential Decree.
(3) The licensing agreement which shall be reported in accordance with the provisions
of paragraph (1) shall be the one that comes
into effect within six months from the
day the report is made, and where a licensing agreement thus reported has not come
into
effect within that period, the report shall be null and void: Provided, That the
same shall not apply where the effective period
of such agreement was approved in
advance by the Minister of Knowledge Economy.
(4) If the introduction of technology falls under any of the subparagraphs of Article 4
(2), such introduction shall be prohibited.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 26 (Tax Reduction and Exemption for Licensing Agreement)
For a licensing agreement, taxes, such as corporate tax or income
tax, may be reduced
or exempted under the conditions prescribed by the Restriction of Special Taxation Act.
[Amended by Act No.
9374, Jan. 30, 2009]
Article 27 (Foreign Investment Committee)
(1) For the deliberation of the following matters, a Foreign Investment Committee shall
be established under the Ministry of Knowledge
Economy:
1. Important matters concerning the basic policies and institutions for foreign investment;
Laws on Green Growth, and Economic Investment
in Korea 391
05_LawsConcerningEconomicInvestment
2. Matters concerning integration and coordination of the measures by each competent
Ministry on the improvement of the environment
for foreign investment;
3. Matters concerning the criteria for the abatement or exemption of taxes with respect
to foreign-capital invested companies;
4. Matters concerning cooperation among, and reconciliation of different opinions of
the central administrative agencies, the Special
Metropolitan City, Metropolitan
Cities, Dos, and the Special Self-Governing Province with respect to foreign investment;
5. Matters concerning stimulation plans;
6. Matters concerning contributions to nonprofit corporations under Article 2 (1) 4 (d);
7. Matters concerning assistance to local governments under Article 14;
8. Matters concerning funding under Article 14-2;
9. Matters concerning the payment of bounty for inducing foreign investment provided
in Article 14-3 (2);
10. Matters concerning the designation of a foreign investment zone and assistance
thereto under Articles 18 and 19; and
11. Other important matters concerning the inducement of foreign investment.
(2) The Minister of Knowledge Economy shall be the chairperson
of the Foreign Investment
Committee, and the following persons shall be its members: 1. The Minister of Strategy and Finance, the Minister of Foreign Affairs and Trade,
the Minister of Public Administration and Security,
the Minister of Education,
Science and Technology, the Minister of Culture, Sport and Tourism, the Minister
for Food, Agriculture,
Forestry and Fishery, the Minister of Environment, the
Minister of Labor, the Minister of Land, Transport and Maritime Affairs,
and the
Chairman of the Financial Services Commission; and
2. The head of the central administrative agency and the Mayor/Do Governor in cases
which involves the agenda to be submitted before
the Foreign Investment
Committee, or the President of the Korea Trade-Investment Promotion Agency
(3) For the review and readjustment
of matters to be deliberated by the Foreign Investment
Committee and for the deliberation of matters entrusted by the Foreign Investment
Committee as prescribed by Presidential Decree, a Foreign Investment Working
Committee (hereinafter referred to as the "Working
Committee") shall be established.
(4) The Minister of Knowledge Economy shall make a report to the Foreign Investment
Committee
on the progress regarding the improvement of the environment for foreign
investment under paragraph (1) 2.
392 Ministry of Government Legislation
(5) Necessary matters, other than those as prescribed by the provisions of paragraphs (1)
through (3), regarding the composition
and operation of the Foreign Investment
Commission and the Working Committee, shall be prescribed by Presidential Decree.
[Amended,
Jan. 30, 2009]
Article 28 (Report, Investigation, and Correction)
(1) The Minister of Knowledge Economy and the competent Minister may require
the
foreign investors, the foreign-capital invested companies, those who have introduced
technology into Korea, the head of the
Korea Trade-Investment Promotion Agency,
the heads of the relevant financial institutions, and other interested parties, to make
reports on matters which are deemed necessary regarding the foreign investment and
the introduction of technology as prescribed
by this Act.
(2) Where it is deemed necessary for the appropriate enforcement of this Act, the Minister
of Knowledge Economy may
require public officials under his/her jurisdiction or the
head of the relevant administrative agency, to carry out investigations
into the
following matters:
1. Matters concerning the introduction, use, and disposal of the funds (including
objects of investment) and capital goods in which
a foreigner has invested;
2. Circumstances concerning the introduction of technology; and
3. Matters concerning the implementation of the details permitted or reported in
accordance with this Act.
(3) In cases of carrying out an investigation in accordance with the provisions of paragraph
(2), the person subject to the investigation
shall be notified of the investigation plan,
which includes the time, date, reasons, and details, not later than seven days prior
to the investigation: Provided, That with an advanced notice, the same shall not apply
in cases of urgency or where the purpose
of the investigation may not be achieved
due to destruction of evidence.
(4) The person who carries out an investigation in accordance with the provisions of
paragraph (2) shall carry a voucher of his/her
authority with him/her and present it
to relevant persons, and deliver a document to relevant persons wherein the name,
time of
access, and aim of access are entered at the time of access.
(5) In any of the following cases, the Minister of Knowledge Economy
may issue a
correction order or take other necessary measures against those who introduce funds
or capital goods invested by foreigners
into Korea or use such funds or capital goods,
Laws on Green Growth, and Economic Investment in Korea 393
05_LawsConcerningEconomicInvestment
and other interested parties:
1. Where the person concerned has not implemented such matters as permitted or
reported under this Act, or what has been implemented
is illegal or unjust; and
2. Where a fact which corresponds to each of the subparagraphs of Article 4 (2) has
been detected.
(6) Where a person who introduced funds and capital goods into Korea for the purpose
of foreign investment has not cleared the capital
goods through the customs or has
not taken possession of them within the storage period as prescribed by the Customs
Act, the head
of any customhouse may sell them under the conditions prescribed by
Presidential Decree.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 29 (Examination and Confirmation of Capital Goods Introduced)
(1) A foreign investor or a foreign-capital invested company
introducing capital goods
which meet the criteria prescribed by Presidential Decree, such as capital goods
introduced into Korea
under this Act which are subject to the reduction or exemption
of taxes, or goods, other than capital goods, introduced into Korea
for foreign
investment purposes falling under Article 2 (1) 4 (c) and (d) (hereafter referred to
as "capital goods" in this Article),
shall obtain the examination and confirmation of
the capital goods from the competent Minister.
(2) Any capital goods examined and confirmed by the competent Minister in accordance
with the provisions of paragraph (1), shall
be deemed to have obtained the import
approval under the Foreign Trade Act.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 30 (Relations with other Acts and International Treaties)
(1) Except as otherwise provided for by this Act, matters concerning
foreign exchange
and foreign trade shall be governed by the Foreign Exchange Transactions Act.
(2) Notwithstanding the proviso
to Article 462-2 (1) of the Commercial Act, a foreign-capital
invested company may pay dividends with its newly issued stocks up
to an amount
corresponding to its total dividend amount, where a special resolution as prescribed
by the provisions of Article
434 of the Commercial Act has been adopted.
(3) Where a foreign investor makes an investment in kind with the capital goods under
Article 2 (1) 8 (b), the written confirmation of the completion of the investment in
394 Ministry of Government Legislation
PENAL PROVISIONSCHAPTER VIII
kind for which the Commissioner of the Korea Customs Service confirmed the
implementation of the investment in kind and the type,
volume, and price of the objects
of the investment in kind, shall be deemed to be a written report of investigation
by an investigator
under Article 80 of the Commercial Registration Act, notwithstanding
the provisions of Article 299 of the Commercial Act. The same
shall also apply where
foreign investor invests in capital goods in kind after he/she has established a company.
(4) Where a technology
evaluation agency as prescribed by Presidential Decree has
evaluated the price of an industrial property right under Article 2 (1)
8 (d), the
evaluation details shall be regarded as having been appraised by a publicly certified
appraiser in accordance with the
provisions of Article 299-2 of the Commercial Act.
(5) A national of the Republic of Korea or a Korean corporation who desires to
operate
a business jointly with a foreign investor, who has reported in accordance with the provisions
of Article 5 (1), may designate
the first day of every month as the re-evaluation day and
conduct re-evaluation under the Assets Revaluation Act of the objects
of investment
concerned, notwithstanding the provisions of Article 4 of the Assets Revaluation Act.
(6) This Act shall not be interpreted
as revising or limiting the details of international
treaties which the Republic of Korea has contracted and promulgated.
[Amended
by Act No. 9374, Jan. 30, 2009]
Article 31 (Delegation of Authority)
Under the conditions prescribed by Presidential Decree, the Minister of Knowledge
Economy, the competent minister, or the Mayor/Do
Governor, may delegate or entrust
part of his/her authority as prescribed by this Act to the Commissioner of the National
Tax Service,
the Commissioner of the Korea Customs Service, the head of the Korea
Trade-Investment Promotion Agency, the heads of management
agencies of foreign
investment zones, and the heads of any foreign investment-related agencies as prescribed
by Presidential Decree.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 32 (Penal Provisions)
Any person or company, including its representative, who has instituted the illegal transfer
of foreign currency funds into a foreign
country on the occasion of an external remittance,
Laws on Green Growth, and Economic Investment in Korea 395
05_LawsConcerningEconomicInvestment
foreign investment, or technology introduction as prescribed by this Act, shall be punished
by imprisonment of not less than one
year or by a fine in the amount equivalent to not
less than twice and not more than ten times the amount of the illegal transfer.
In such
cases, the foreign currency funds illegally transferred shall be confiscated, and if
confiscation is not possible, the
corresponding value shall be collected in lieu of confiscation.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 33 (Penal Provisions)
Any person who has not reported on the disposal of capital goods in violation of the
provisions of Article 22 shall be punished
by imprisonment of not more than five years
or by a fine not exceeding 50 million won.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 34 (Penal Provisions)
Any person who has submitted false documents with respect to permission or report as
prescribed by this Act shall be punished by
imprisonment of not more than three years
or by a fine not exceeding 30 million won.
[Amended by Act No. 9374, Jan. 30, 2009]
Article 35 (Penal Provisions)
Any person or company, including its representative who falls under any of the following
subparagraphs, shall be punished by imprisonment
of not more than one year or by a
fine not exceeding 10 million won: 1. Any person who has acquired shares of stock of a defense industry company without
having obtained the necessary permission in
violation of the provisions of Article 6
(3);
2. Any person who has used data received from the head of a competent administrative
agency or secrets learned in the course of conducting
business for any other purpose
than those prescribed in this Act or has revealed them to any third party in violation
of the provisions
of Article 15-2 (5); and
3. Any person who has failed to take measures, such as a correction order, as prescribed
in Article 28 (5).
[Amended, Jan. 30, 2009]
396 Ministry of Government Legislation
Article 36 (Joint Penal Provisions)
If the representative of a juridical person, or an agent, employee or worker of a juridical
person or individual has committed a
violation falling under any of Articles 32 through 35
with relative to the business of the juridical person or individual, the violator
as well as
the juridical person or individual shall be punished by a fine under the relevant provisions
of law: Provided, That
in cases where the juridical person or individual has given appropriate
attention and supervision to prevent such violation, this
provision shall not apply.
[Amended by Act No. 9239, Dec. 26, 2008]
Article 37 (Fine for Negligence)
(1) Anyone who falls under any of the following subparagraphs shall be punished by
a fine for negligence of not exceeding 10 million
won:
1. Any person who has acquired existing shares without making a report thereon in
violation of the provisions of Article 6 (1);
2. Any person who has failed to comply with the investigation provided in Article
28 (2), or has refused, obstructed or dodged such
investigation.
(2) The fine for negligence referred to in paragraph (1) shall be imposed and collected
by the Minister of Knowledge
Economy under the conditions prescribed by Presidential
Decree.
[Amended by Act No. 9374, Jan. 30, 2009]
ADDENDA
(1) (Effective Date) This Act shall take effect six months from the date of its promulgation.
(2) (Application Deadline) The amended
provisions of Article 14-2 (1) expires December
31, 2012.
(3) (Applicable Example concerning Funding) The amended provisions of Article 14-2
(1) shall apply, starting with the first report
made on a foreign investment after this
Act takes effect.
Tables
Tables 1 and 2 Omitted.
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