Archive for the ‘Economic Development Zones (2014)’ Category

KCNA reports on Kangryong Green Zone

Friday, December 9th, 2016

The Kangryong Green Zone was first announced on a promotional VCD given to foreign participants of a SEZ conference in Pyongyang in October 2013. However, the project was not formally announced in KCNA until July of 2014. KCNA has not mentioned it again until today.

According to KCNA:

Pyongyang, December 9 (KCNA) — The DPRK has pushed ahead with the project to develop Kangryong County of South Hwanghae Province into an international green model zone.

Kangryong County has favorable conditions for the project, as it is bound on sea rich in marine resources like sea cucumber and scallop. And its beachfront is abundant in energy resources, including wind, solar and tidal powers.

The county has circumstances favorable for sustainable development of agricultural production by means of bettering its ecosystem with organic farming method and introducing ring-shaped rotation production system.

In this regard, Hong Kil Nam, director of the Secretariat of the Korea Green Research and Development Association, told KCNA:

The county is highly potential to be a world-level green zone for its excellent natural ecological environment and good conditions for the development of fishery and agriculture.

With an increasing interest of the government in the county, a master plan for developing the whole county into an international green model zone was well matured in keeping with the reality of the DPRK and the world trend of development.

The master plan regards it as its principle to protect and improve the county’s natural ecological environment, set up a system of ecological circulation featuring the green zone, raise the utilization of resources and energy to the maximum and achieve the sustainable economic development. To this end, the plan includes such detailed projects as construction of an industrial zone for production of green goods, infrastructure and tourist zones with populated, forest and other areas.

Meanwhile, it is gaining momentum to draw up detailed plans and create a favorable environment for investment.

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DPRK publishes environmental regulations for SEZs

Wednesday, May 18th, 2016

In the most recent issue of Foreign Trade (2016, No. 2), the DPRK publishes “REGULATIONS OF THE DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA ON ENVIRONMENT PROTECTION IN ECONOMIC DEVELOPMENT PARKS“.

I have painstakingly copied the regulations to a stand alone PDF and uploaded it here.

Enjoy.

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Foreign Trade report on the Nampho SEZs (Jindo, Waudo)

Wednesday, May 18th, 2016

Nampho-EDZs-Google-Earth

Pictured above (Google Earth): The approximate locations of the Waudo and Jindo Export Processing Zones

The North Korean quarterly magazine, Foreign Trade, published information on the Jindo and Waudo economic development Zones (straddling the Ryongnam Ship Repair Factory).

According to Foreign Trade (2016 vol 2, p6):

Economic development parks in the DPRK are booming recently.

The city of Nampho is conducting processing trade by relying on the bases in Jindo and Wau Islet, taking advantage of its favourable economic and geographical conditions.

As a gate city on the coast of the West Sea of Korea, the industrial city has an international port.

The city, situated on the lower reaches of the Taedong River, boasts metallurgical, machine building, glass-making industries, and lead and zinc refi ning, silk fabrics and shipbuilding bases.

It has the country’s biggest salt works and a fishing station, a fishing implements manufacturing factory and a refrigerating plant.

The Port of Nampho, the biggest of its kind in the western part of the country, is at the northern shore of the Taedong’s entrance to the sea. The water is deep, the port itself is far inside the estuary of the Taedong River and the dams of the West Sea Barrage stand high, assuring safe navigation by ships.

There are around ten major berths and crane ships, loading bridges and conveyor belts.

Wau Islet off the port is one of the famous tourist spots.

The port is linked with over a hundred foreign countries and regions for commercial trade.

Jindo Processing Trade Zone
The zone aims at producing various kinds of light industry and chemical goods made from duty-free raw materials for export.

Cooperation period: 50 years

Project plan: The coverage of the zone is about 1.8 sq km. By taking advantages of the Port of Nampho nearby and tens of years of development of the machine-building, electronical and light industries in Nampho, it processes various goods and exports them. Enterprises are admitted to it on the principle of conserving the environment and saving energy. It strives to develop new products and industrial fields, realize technical transfer with other countries and thus contribute to revitalizing the domestic industry. It is also making efforts to develop into a processing trade and bonded trade area.

Waudo Processing Trade Zone
The zone aims at developing into an intensive processing trade zone by introducing advanced development and operation mode and by placing stress on export-oriented processing and assembling.

Cooperation period: 50 years
Gross Investment: About USD 100,000,000

Project plan: The zone covers an area of about 1.5 sq km. By utilizing its favourable conditions, it puts main emphasis on bonded processing, processing to order, barter trade and other types of export-oriented processing industry.

It aims to develop into a comprehensive zone with financial, tourist, real estate and foodstuff industry bases in the areas around the port and the scenic area around the West Sea Barrage.

Cooperation mode: Joint venture between corporate bodies of the DPRK and foreign investors or wholly foreign-owned enterprises.

Location: Some parts of Ryongnam-ri, Waudo District by the estuary of the Taedong River southwest of the city.

Infrastructure condition: Only 50km away from Pyongyang and a few kilometres between the port, the biggest international port in the country, and the railway station.

From the port it is 330km to Dalian, 332km to Weihai, Shandong, 930km to Shanghai and 695km to Tianjin, China, and 1 575km to Chinese Taipei. The Youth Hero Road between Pyongyang and Nampho facilitates the few scores of kilometres of travel to the Pyongyang International Airport. These all provide favourable conditions for domestic marine transport and entry and exit of foreign personnel, materials and funds.

A 600,000kW-capacity power station and 10,000kW-capacity tidal power station are intended to be built near Kwangnyang Bay beside the West Sea Barrage. The Taedong fully guarantees water supply.

The site was formerly occupied by a salt farm, so problem of removing structures does not arise. The area is 40m above sea level and flat.

National Economic Development Guidance Bureau, DPRK Ministry of External Economic Relations
Add: Taedonggang District, Pyongyang, DPR Korea
Tel: 0085-02-381-5912
Fax: 0085-02-381-5889
E-mail: [email protected]

A screen shot of the original article can be seen here.

NK News has additional analysis here.

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Pyongyang Times: Tourism regulations in EDZ instituted

Monday, February 15th, 2016

According to the Pyongyang Times (2016-2-15):

Tourism regulations in EDZ instituted

The government has set new regulations to control tourism in the economic development zones.

Tourism regulations were adopted by decision No. 90 of the Presidium of the Supreme People’s Assembly on December 23 2015.

The regulations containing 32 articles in five chapters are applicable to EDZs established for tourism.

The DPRK citizens, overseas Koreans and foreigners can tour EDZs in various styles and methods including visit, sightseeing, vacation, amusement, sports, experiencing and medical treatment.

Personal safety, human rights and property of tourists in EDZs are protected by the law of the DPRK.

Management of tourism is undertaken by the managing authorities of EDZs.

The zones encourage planned development and protection of tourism resources such as scenic attractions, historic relics and remains and natural monuments.

Investors can invest, establish and run businesses in such fields of travel, lodging, restaurant, amusement, welfare services, production and sale of souvenirs and development of tourism resources in the zones with the approval of the management authorities of EDZs.

In case of establishing a travel company in the zones, license of the central tourism guidance organ should be gained through the management authorities. After receiving the license, the travel company should register its business with the management authorities and receive business registration certificate.

When an investor wants to set up and run a tourism service business in EDZs, he or she should obtain the approval of the management authorities following relevant regulations.

Tourists who want to travel EDZs should apply for tourism directly or via local and foreign travel companies outside relevant EDZs.

Anyone, who did any harm to personal safety, health and property of tourists, failed to provide proper service obliged by contracts, destroyed tourism resources or caused any damage to businesses and individuals, bears such civil liabilities as to restore them to their original state, or pay compensation, penalty and arrears.

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Labour regulations in EDZ modified

Wednesday, February 3rd, 2016

According to the Pyongyang Times (2016-2-3):

The DPRK has modified its labour regulations for the economic development zones, which were worked out according to a decision of the Presidium of the Supreme People’s Assembly on December 12 2013.

According to them, a foreign investment business is encouraged to employ local manpower as much as possible but it may hire foreign management staff, specialists and technicians.

The fixed monthly minimum wage is set by the central agency for the special economic zones guidance in consultation with relevant provincial-level people’s committees and EDZ management agencies.

An employee is supposed to work 8 hours a day or 48 hours a week on average.

A business shall make sure that employees take rests on local holidays and Sundays.

The forms of payment to the employees involve wage, incentives and bonuses.

According to the quality and amount of work, payment should be done correctly and employees who have carried out the same amount of work are to be paid evenly on an equal footing irrespective of gender and age.

The monthly wage is up to a business. In this case, it cannot be set lower than the fixed minimum wage.

While making preparations to start operation, a business may set the salary for employees, apprentices and unskilled hands within the scope of over 70 per cent of the fixed minimum wage.

A business shall pay for its employees’ regular and supplementary leaves in accordance with the number of their days off.

Female staff on maternity leave shall be paid over 60 per cent of the leave allowances.

If a business works an employee while on leave, it shall pay him or her the equivalent of 100 per cent of the wage per day or hour, as well as their leave allowances.

A business shall give supplementary living allowances that account for over 60 per cent of their wages per day or hour to those who are under training or out of work due to the management.

When it works an employee late at night or overtime, the business shall pay him or her 150 per cent of the wage per day or hour.

If the work is done overtime late at night, 200 per cent of the wage per day or hour shall be given to the worker.

If a business works an employee on holidays or Sundays without compensatory days off, it should pay 200 per cent of the wage per day or hour.

The wage is given in cash, and the bonuses and incentives may be paid in the form of notes or goods.

The DPRK citizens and their families in the EDZ are to benefit from the social and cultural policies of the government, namely free education and medical service, social insurance and social security.

If any breach causes damages to the lives, health and properties of a business or employee, it shall be restored to their original state or compensated duly for the damages.

By Cha Myong Chol PT

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DPRK announces new EDZ (SEZ) regulations

Sunday, November 15th, 2015

According to the Pyongyang Times:

Regulations on tax in EDZ worked out

Regulations on Tax in Economic Development Zones have been published pursuant to the August 19 decree of the Presidium of the Supreme People’s Assembly.

The regulations have 11 chapters and 72 articles.

According to them, they are applicable to foreign-invested businesses, foreign individuals and overseas Koreans that conduct business transactions or earn income in EDZs, and tax supervision in the zones will be conducted by relevant taxation institutions under the guidance of the central taxation organ.

Enterprise income tax rate is 14 per cent of the net profits, or 10 per cent in case of the priority sectors.

Tax rate on remuneration will be 5 to 30 per cent of the amount of income, if the monthly amount of income is higher than 500 euros, and that on the income from donation 2-15 per cent if the amount of income is greater than 5 000 euros.

Property tax rate is 1 per cent on buildings and 1.4 per cent on vessels and planes, and the property owner is required to submit the application for registration of property to taxation institutions within 20 days of property ownership and register the property.

Individuals who have inherited properties in EDZs and residents in EDZs who inherited properties outside EDZs are bound to pay inheritance tax and the rate is 6 to 30 per cent.

Turnover tax rate is 1-15 per cent of the sales proceeds of products or income from construction work guidance and 16 to 50 per cent in case of defined luxury articles.

Service tax rate is 1-10 per cent, and up to 50 per cent tax rate is applied to special entertainment category, but it is reduced by 50 per cent for businesses engaged in the latest science and technology service sector.

Resource tax rate varies from 1 to 20 per cent according to its kinds and it may be exempted in case the resources are exported in the form of processed products with high value based on modernized technological processes, or sold to local institutions, businesses and organizations by government measures.

It may be reduced by 50 per cent in case the businesses engaged in the special priority sector uses underground water for production.

City management tax rate is 1 per cent and businesses and individuals must pay vehicle taxes on the use of cars and other road vehicles.

Read the full story here:
Regulations on tax in EDZ worked out
Pyongyang Times
2015-11-15

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Real estate and insurance laws adopted for SEZs

Wednesday, July 22nd, 2015

According to KCNA:

Rules of Real Estate and Insurance in EDP Adopted

Rules of real estate and insurance in the economic development parks (EDP) were adopted according to the decision of the Presidium of the Supreme People’s Assembly of the DPRK.

The rule of real estate consists of seven chapters and 59 articles and the rule of insurance four chapters and 52 articles.

The rules deal with possession, registration and employment of real estates, their rent and rate, conclusion of insurance contract, formalities of insurance offices, etc. in the EDP.

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Total development plans completed for economic development zones: Tenant companies to be put under selection process

Friday, February 27th, 2015

Institute for Far Eastern Studies (IFES)
2015-2-27

According to the Choson Sinbo, a pro-North Korean newspaper in Japan, North Korea is promoting “diversification in foreign economy,” and has recently signed “bilateral agreements on promotion and protection of foreign investment” with 28 countries and “double taxation avoidance agreements” with 13 countries.

The newspaper cited an interview with Kim Chon Il, the director of (North) Korea Economic Development Association: “multilateral foreign economic development signifies developing foreign economic relations with many countries around the world in various economic sectors and units, unlike in the past where foreign economic activities were concentrated around only a few countries.”

In addition, he said, “the form of exchange and cooperation is also orienting toward diversification” and “We are promoting businesses in various sectors in trade, investment, joint venture, and science and technology cooperation based on new products and achievements made with the state-of-the-art science and technology.”

The Choson Sinbo article emphasized that, “Currently foreign economic business projects are not delegated to only a specific unit,” and that “Choson [North Korea] is promoting various business establishments and management of domestic institutions, corporations, and organizations as well as encouraging various overseas companies and individuals in joint venture projects and establishing independent foreign companies in special economic zones.”

The news also elaborated on the amendment of recent foreign investment laws and explained that new regulations and bylaws are being developed to incorporate various investment strategies including internationally recognized BOT (build-operate-transfer) method.

Moreover, the article confirmed that “the core of the DPRK’s foreign economic development lies with the economic development zones,” and the development plans for economic development zones and investment attraction projects are well underway since last year.

Director Kim Chon Il confirmed that “Currently, the total development plans of 13 provincial-level economic development zones were completed and the total plans for the rest of the economic development zones are in the closing stages.”

He added that the Wonsan District Development General Corporation was launched last year and disclosed that the development plans for the Wonsan-Mt. Kumgang International Tourist Zone was completed.

Furthermore, Kim estimated the preparatory period for the business to take about two years and that the substantial business plans must begin now, starting with the selection process for tenant companies. He stressed, “It is timely to vigorously attract investment from around the world on a large scale in accordance with the total development plans of the economic development zones.”

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KCNA: Business success in store for foreign investors

Monday, February 2nd, 2015

According to the article:

A project to set up economic development parks has been steadily pushed forward in different parts of the DPRK, drawing attention of many foreign investors, says Ri Sun Hak, a department director of the Ministry of External Economic Relations.

He said the DPRK government has made all its efforts to create a legal environment favorable for the rights and interests of foreign investors.

The government encourages them to invest in the country on the principle of equality and mutual benefits, he said, and continued:

A series of laws on foreign investment, including the DPRK Law on Foreign Investment and the Law on Economic Development Parks, has been newly enacted, amended and supplemented to provide foreign investors with legal guarantee.

The DPRK government has already made the agreement on promotion and protection of mutual investment with 28 countries and agreement on prevention of double taxation with 13 countries in Asia, Africa and Europe.

Rules and detailed regulations have been adopted one after another to introduce internationally recognized investment formulas in keeping with the actual circumstances of the country.

Now the DPRK government has been carried forward the cooperation with Russian companies in the fields of railway transportation and harbor express service, while establishing economic development parks and paying deep attention to different projects of cooperation with other countries in the field of investment.

Tourism is also gaining momentum with the development of Wonsan-Mt. Kumgang and Mt. Chilbo areas into fashionable tourist attractions.

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Update on the Unjong development zone

Sunday, January 25th, 2015

According to the Pyongyang Times (2015-1-25):

With a series of economic development zones springing up across the country, the first cutting-edge technology development zone is to be built in Unjong Science Park in which the State Academy of Sciences is located.

As it covers a 200 hectare area near Pyongyang, it has many favourable conditions for its development.

Many projects have been planned to solicit investment since the publication of the decree of the Presidium of the DPRK Supreme People’s Assembly on the establishment of Unjong Cutting-edge Technology Development Zone in July 2014.

The development zone will be divided into information industry, biological industry, technology and engineering, materials and equipment and other sections, focusing on the development of cutting-edge technologies and products in these sectors.

An IT company, program development centre and IC production base are to be built to develop and make advanced programs and products.

The biological industry section will house developers and manufacturers of bioengineering products such as biomedicine, enzyme products, microbial agrochemicals and fertilizers and biochemical products. Concentrated in the materials and equipment section will be research centres and manufacturing bases to develop and produce laser and plasma devices, materials and other technology products.

The zone plans to establish start-ups in the fields of agriculture, stockbreeding, fruit, fish and industrial crop farming and biomass energy which have high values added.

In the development zone local businesses are mainly engaged in joint technology development with foreign partners, technology export and technology service to foreign customers.

At the moment dozens of joint technology development projects have been selected such as multiple-axis CNC compound processing lathe, scanning plasma surface heat treatment device and pollution-free washing machine. Dozens of other technology export projects have been arranged including portable digital pH meter, CNC device that can simultaneously control 15 kinds of machines, metal lithium, rubidium and cesium manufacturing technology ensuring over 99.5 per cent purity and a welding pencil without using electricity.

The 3-D virtual reality design, satellite-beamed data interpretation and geographical data system and parallel blasting method without gas exhaust are now waiting for foreign customers.

Competent scientific and technical personnel and solid material and technical foundations will provide a reliable guarantee for the zone to achieve its development goals.

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