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“.
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“.
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.
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
KCNA has announced a new Economic Development Zone:
Kyongwon Economic Development Zone to Be Set Up in DPRK
Pyongyang, October 8, 2015 18:24 KST (KCNA) — The DPRK decided to set up the Kyongwon Economic Development Zone in some areas of Ryudasom-ri, Kyongwon County, North Hamgyong Province.
The sovereignty of the DPRK is exercised over the zone.
A relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Oct. 8.
According to the Institute for Far Eastern Studies (IFES):
Establishment of New Economic Development Zone in North Hamgyong
North Korea revealed on October 8, 2015 that it will establish the Kyongwon Economic Development Zone in North Hamgyong Province. “An economic development zone will be formed in part of Ryudarisom-ri in Hamgyong Province’s Kyongwon County,” North Korea’s state-run Korean Central News Agency (KCNA) announced.
According to the KCNA, the Standing Committee of the Supreme People’s Assembly released the ordinance establishing the Kyongwon Economic Development Zone on October 8. It did not however, disclose any specific details, stating only that “the Democratic People’s Republic of Korea exercises its sovereignty.”
Currently there are 16 locations in North Korea that have been designated as regional economic development zones (EDZs): the Chongjin EDZ, Hyesan EDZ, Manpo EDZ, Amnok River EDZ, Wiwon EDZ, Hungnam Industrial Development Zone, Chongnam Industrial Development Zone, Hyondong Industrial Development Zone, Sukchon Agricultural Development Zone, Pukchong Agricultural Development Zone, Orang Agricultural Development Zone, Chongsu Tourist Development Zone, Onsong Island Tourist Development Zone, Sinpyong Tourist Development Zone, Songnim Export Processing Zone, and the Wau Island Export Processing Zone.
There are also seven central-level EDZs: the Rason Special Economic Zone, Wonsan-Kumgangsan Tourist Region, Kaesong Industrial Region, Sinuiju International Economic Zone, Kangryong International Green Model Zone, Onjong High Tech Development Zone, and the Mubong International Special Tourist Zone.
At an EDZ investment briefing session held in Pyongyang on September 21, 2015, Korea Economic Development Association’s general secretary Kim Chon Il explained, “We have made it so that each province can directly manage and develop their local development zones, meeting the demands of the socialist economic management principles of guaranteeing centralized economic management principles and the identity of each region.”
He added, “As we ensure practical economic benefits matching the development principles of economic development zones to the natural geographical conditions of the relevant region, we are starting under a comprehensive plan on a small scale and are achieving results. Going forward we will gradually expand.”
According to NK News:
A Chinese-state affiliated and Singaporean investment group, the latter of which is allegedly directly connected to the DPRK, is calling for large-scale investment in 12 projects spanning nearly every major sector in North Korea, from transport to mining to internet and cable television development.
The ambitious plans, outlined in an August 2 press release from China Railway Investments Group, welcome foreign participation in 12 “world class opportunities” in North Korea.
“The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong,” the press release says.
The joint venture, called Heuimang Investments Group Limited, will be capable of providing a “direct and exclusive conduit to the highest levels of decision making in the government of the DPRK,” the release continues. “Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.”
Here is the full text:
Heuimang Investments Group Ltd (In Chinese pinyin Han Wang Touzi Jituan Youxian Gongsi)
The DPRK is committed to progressing its economic development, and welcomes the participation of foreign companies in investing in world class opportunities in the country.
朝鲜欢迎中国的公司投资参与. 朝鲜通过它在新加坡注册的窗口公司Daegian 私人有限公司, 与中铁多经投资集团有限公司合作在香港建立了融投资平台—招商公司.
The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong.
The DPRK Government has formally approved the joint venture between Daegian and CRIG and their joint venture company called Heuimang (or Han Wang in Pinyin Chinese) Investments Group Limited.
Daegian provides a discrete, direct and exclusive conduit to the highest levels of decision making in the government of the DPRK. Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.
Heuimang/Han Wang will concentrate on creating a strong and robust platform for economic and trade co-operation between the countries. It will also take advantage of the flexibility afforded to a commercial entity registered in Hong Kong.
All parties to this joint venture are committed to supporting Heuimang/Han Wang in operating on a transparent basis within international laws and practices.
The primary objective is commercial engagement through mutual cooperation for shared benefit.
2015年1月29日: 中铁和Daegian 签订了框架合作协议, 其中确定了互惠和显著利于中国和朝鲜，尤其是基础设施发展的若干项目. 通过韩旺, 中铁致力于引领中国企业组成的联合体参加朝鲜民主人民共和国的经济和基础设施发展.
January 29, 2015: CRIG and Daegian executed a framework cooperation agreement which identified certain projects of mutual and significant benefit to China and the DPRK, particularly infrastructure development. CRIG is committed to lead through Heuimang/Han Wang a consortium of investors from China to participate in the economic and infrastructure development of the Democratic People’s Republic of Korea.
March 20, 2015: CRIG and Daegian signed a convention to establish an investment holdings company to coordinate and manage investment in the DPRK.
2015年4月8日: 朝鲜政府的执行委员会正式批准为创建韩旺作为的中铁和Daegian 之间的合作平台公司.
April 8, 2015: The Executive Committee of the DPRK Government granted formal approval for the creation of Heuimang/Han Wang as the joint venture company between CRIG and Daegian.
这是中国- 朝鲜最高领导人讨论2010年5月的巅峰之作, 于经贸合作，成立一个指导委员会，共同开发和管理提名的项目, 包括特别经济贸易区.
These represent the culmination of China-DPRK economic and trade cooperation discussions dating back to May 2010, when the top leaders of both countries established a steering committee to jointly develop and manage nominated projects,including special economic trade zones.
Fundamental to the programme is the underlying requirement to support capacity building, institutional planning and logistics and the drafting of relevant legislation. Also, to improve customs procedures, communications and sponsor agriculture and other specified projects in the DPRK.
China and the DPRK are committed to progressing their cooperation and friendship by encouraging an enterprise based market economy for the mutual benefit their two peoples.
In supporting the DPRK in the development of the nominated projects (see below), China Railway will be taking advantage of the preferential policies of the Chinese Government’s ‘Go Global’ strategy and its model of ‘co-operation between nations’ to create Economic and Trade Cooperation Zones.
The following have been selected for initial development:
Rason Economic Trade Zone and other Special Economic Trade Zones
2. 罗津港, 运输和物流
Rajin Port, Transport and Logistics
East Coast High-speed Rail and interconnecting services
National Oil and Gas Strategy, including
Refurbishment of the two existing refineries and technological upgrade
Construction of more processing capacity and storage and warehousing facilities to meet local and export demand
Trade sales and marketing
Exploration and exploitation of local reserves
Gold mining and processing; and establishment of a gold bank
Rare earth elements mining and processing
Metals and minerals mining and processing including:
a. 铁钢 Iron and steel
e. 菱镁矿 Magnesite
f. 石墨 Graphite
Telecommunications & cable television
10. 互联网服务, 国家经济信息电子中心及电子支付平台
Internet services, a national information centre and electronic payment platforms
Financial Services including a full commercial full services bank and insurance
12. 农业包括菌草种植, 牛羊养殖和捕鱼,
Agriculture including bacteria grass, sheep and cattle breeding and fishing
罗先经济贸易区和罗津港: 由罗先经济合作局管理，位于朝鲜北东部，毗邻中国吉林省延边地区. 罗先的主要商业机会是罗津港，该港作为主要的物流和交通枢纽为东北亚的潜力. 中国、俄罗斯、蒙古承认其优点，罗津港可提供最北端的全年温水冷冻自由港. 俄罗斯和蒙古已经从罗津港运送大宗商品，通过铁路连结由俄罗斯建造的港区.
The Rason Economic Trade Zone and Rajin Port: is managed by the Rason Economic Cooperation Bureau, located in the North-East of DPRK, adjacent to the Yanbian area, Jilin province, China. The major commercial opportunity in Rason is the potential that Rajin port offers as a major logistics and transport hub for north-east Asia. China, Russia and Mongolia acknowledge the advantages that the northern most all-year round port can provide. Russia and Mongolia are already shipping bulk commodities from Rajin through a railway link built by Russia.
拟议的铁路连接新丝路网络，将为中国东部、俄罗斯、韩国、日本, 进入中亚欧洲及其他新兴经济体. 一个便捷的陆路货物通道，这将减少旅行时间只需15天，而不是原来45天的海上运输，太有吸引力了, 区域商家不能忽视.
A proposed rail connection to the New Silk Road network will provide Eastern China, Russia, South Korea and Japan access to the emerging economies of Central Asia and Europe beyond. A land route for the transport of goods that will reduce travel time to just 15 days as opposed to 45 days by sea will be too attractive for regional manufacturers to ignore.
Rason’s potential as a major industrial and commercial centre is further enhanced by the planned oil and gas pipeline from Siberia down to Pusan in South Korea. Situated as it is at the gateway to the fastest growing and most dynamic economic region in the world, it is a virtual certainty that Rason will become one of the most important cities in the region.
有许多小到中型中外合资企业已经建立在罗先. 这是肯定的, 由于贸易的增加, 这将很快被更大的企业来加盟。
There are many small to medium sized foreign joint ventures already established in Rason, which will soon be joined by larger enterprises that will inevitably follow as trade increases.
Dozens of Chinese enterprises are in negotiations with North Korean companies for economic and trade activities in building materials, food processing, machinery, finance, investment, logistics and other fields. Transportation Group, China Railway Construction Group, China Merchants Group, the Asian Group and other large enterprises have expressed interest in the Rason economic and trade areas.
The Beidahuang Group of China set up a highly efficient agricultural demonstration zone, 500 hectares of rice growing experiments.
The commercial opportunities will only be available through Heuimang.
DPRK’s National Oil and Gas Strategy: is the platform upon which investors could take advantage of the DPRK’s location and launch a marketing campaign into north-east Asia. The DPRK has two refineries only one of which is currently operational.
在新义州的蓬华炼油厂每年生产的柴油和汽油约150万吨, 这是满足本地区的需求远不够的. 该炼油厂坐落在一个很好的位置，跨过鸭绿江丹东，那里有一个油码头和管道组成的国际网络的支线
The Bungwha [Ponghwa] Refinery in Sinuiju [Note: it is in Phihyon, not Sinuiju] produces about 1.5 million tonnes of diesel and gasoline a year which is well below local demand. It is well situated across the Yalu River from Dandong where there is an oil terminal and a spur line of an international network of pipelines.
Heuimang holds rights to a newly designated special economic trade zone which is Sindo Island in the Yalu estuary. The site is ideal to create a tank farm and new processing facility.
The Seungri Refinery in Rason in the north-east, has been silent for 20 years for a lack of feedstock and proper maintenance and repairs. It was designed to produce 2.0 million tonnes a year of a variety of petrochemical products. The potential that is Rajin/Rason will see a growing demand for fuel and certain petrochemical products in the region which must be met.
金属和矿物: 矿产开采和加工是朝鲜经济的支柱. 通过韩旺的国家协议的过程中，任期安全是有保证的，因为它的设计满足国际融资需求。有铁矿石，煤，金，菱镁矿，石墨，稀土元素和许多世界级的沉积物。
Metals and Minerals: mining and processing is the backbone of the DPRK economy. There are world class deposits of iron ore, coal, gold, magnesite, graphite, rare earth elements and many more. Through Heuimang’s state agreement process security of tenure is assured as it is designed to satisfy international financing requirements.
For more information, please contact:
(1) 与中铁投资集团有限公司, 主席, 王先生
Mr. Wang Jing, Chairman of China Railway Investments Group Ltd
(2) Daegian 私人有限公司, 主席, Rudi Sirr先生
Rudi Sirr, Executive Chairman of Daegian Pte Ltd
(3) 韩旺投资集团有限公司, 首席执行官, 沈思翠小姐
Jyn Sim Baker, Chief Executive Officer of Heuimang Investments Group Limited
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.
Institute for Far Eastern Studies (IFES)
North Korea is expediting the development of various ‘Special Tourist Zones’. North Korea is diversifying its tour packages, and have designated Mt. Kumgang (Kumgangsan) and Mt. Paektu (Paektusan) as International Special Tourist Zones. A Special Tourist Zone on the riverside near the Amrok (Yalu) River Bridge is also under construction. This zone is designed to attract foreign tourists including Chinese tourists.
In addition, North Korea and China are pushing forward with the ‘Onsong-Tumen Border Culture and Tourism Cooperation Zone.’ This is intended to be a cooperation zone that integrates tourism, cultural performances, duty-free shopping and serves as a distribution center of tourism products for both countries.
North Korea has also revealed outlines of its plans for the Wonsan-Mt. Kumgang Tourist Region and is pushing ahead with an on-site briefing session scheduled for May 2015. While North Korea repairs and expands the existing road network connecting each tourist site (focusing first on Wonsan), authorities have decided to construct a transportation network by establishing a high-speed railroad between Pyongyang and Wonsan, as well as opening passenger routes between Wonsan Harbor and Rason, and Wonsan Harbor and Vladivostok. They also plan to introduce a series of measures for attracting tourists, including a no-visa system, currently under consideration.
In addition, the Korean Central News Agency (KCNA) has announced an era of full-fledged international tourism in Mt. Paektu. On April 23, 2015, KCNA revealed that the Mubong International Special Tourist Zone will be built in part of Samjiyon County’s Mubong Workers’ District near Mt. Paektu. The Mubong Workers’ District is 35km away from Mt. Paektu, 60km away from Samjiyon, and 70km away from Taehongdan. Thus, it is considered eligible for designation as a special district.
This location is considered to be relatively well-equipped with tourism infrastructure compared to other regions, and expected to perform favorably in attracting outside investment. KCNA reported that this region has a number of amenities and attractions as a Special Tourist Zone.
For example, two decades ago North Korea prepared to host the 1995 Asian Winter Games in Samjiyon until those preparations came to a halt. However, construction resumed in the 2000s, and since then North Korea has constructed a large-scale winter athlete’s village equipped with facilities such as a ski resort and ice rink. Also, Mubong lies in the middle of Samjiyon, Mt. Paektu, and Taehongdan. From Mubong one can go climb Mt. Paektu and view the entire Samjiyon area, or go to Taehongdan and see the large potato-growing districts.
Since the Kim Jong Il era, potato fields were planted in Taehongdan as a tourist attraction. In Mubong, North Korea built large-scale blueberry production complexes, which have become well-known for their blueberry wine. There are also customs offices in Ssangdubong, making the entry process for foreigners presumably less difficult.
Pictured above (Google Earth): Mubong Special Zone for International Tour (무봉국제관광특구), AKA Mubong International Tourism Zone
UPDATE 3 (2016-7-11): KCNA reports the following on the Mubong Zone:
Development of Special Zone for International Tour Progresses Apace in DPRK
Big efforts have been channeled into developing Mubong area into a special zone for international tour in the Democratic People’s Republic of Korea.
In this regard, Kye Song Nam, vice-chairman of the Korea Economic Development Association, told KCNA:
The special zone for international tour of Mubong covers an area of 20 square kilometers. It will boast of hotels, a race track, golf course, hot water bathroom, shower bath place and vacationland.
A project for electricity supply system was already finished in the zone in cooperation with a foreign business.
Construction of all infrastructures will be completed in a few years.
Foreigners can carry on business activities solely in the special zone in conformity with the DPRK Law on Economic Development Parks.
The DPRK government has taken a measure to reduce land lease charge and business income tax for foreign businesses which invest in building infrastructures and make high-tech products in the special zone.
Many foreign businesses have already expressed their willingness to take part in developing the special zone for international tour of Mubong, he said.
UPDATE 2 (2016-6-23): The Pyongyang Times reports on involvement of Hong Kong firm at Mubong Tourism Zone:
Hong Kong business monopolizes tourism zone development
The Shengrun Investment Stock Co Ltd in Hong Kong, China, pushes ahead with the two projects for tourism in the Mt Paektu area and development of the Mubong International Tourism Special Zone.
The special zone covers nearly 20 square kilometres in the Mubong workers district, Samjiyon County, Ryanggang Province.
The county is home to a host of scenic attractions and revolutionary battle sites in Mt Paektu, namely Jongil Peak, Lake Samji, Rimyongsu and Mupho. Over 30 000 hectares of blueberry fields sprawl over the Mt Paektu and Mubong areas. Blueberry, a speciality of the Mt Paektu area, is the main ingredient of various drinks, sweet jelly and syrup and other food products.
The project for the international tourism special zone includes the construction of a comprehensive service network embracing hotel, restaurant, production bases and shops.
Shengrun undertakes the development project exclusively, enjoying benefits and favourable conditions guaranteed by the local law on EDZs and the rules on business management.
With the master plan for the zone development completed, it has finished the power grid project in the special zone and started infrastructure construction.
It started tourism in the Mt Paektu area on June 18.
Foreign tourists are to use a border bridge between the DPRK and China, airport in the Samjiyon area and railways.
Another promising investment destination is the Kalma area located in the Wonsan-Mt Kumgang International Tourist Zone in Kangwon Province on the coast of the East Sea of Korea.
By Cha Myong Chol PT
ORIGINAL POST (2015-4-23): According to KCNA:
The Mubong Special Zone for International Tour will be established in the DPRK.
A relevant decree was promulgated by the Presidium of the Supreme People’s Assembly of the DPRK on Wednesday.
According to the decree, the special zone for international tour will cover some areas of the Mubong Workers’ District in Samjiyon County, Ryanggang Province.
The sovereignty of the DPRK will be exercised in the zone to which the DPRK Law on Economic Development Parks and its regulations concerning foreign investment will be applied.
Here is coverage in Xinhua.
Here is coverage in Yonhap:
North Korea said Thursday it has decided to establish a special tourist zone in a district near the peninsula’s highest peak, a move seen as intended to earn hard currency.
North Korea’s Supreme People’s Assembly on Wednesday promulgated a decree designating some areas of the Mubong workers’ district near Mount Baekdu as the Mubong Special Zone for International Tour, according to the official Korean Central News Agency (KCNA).
The district, located in Samjiyon County, Ryanggang Province, is well positioned for a tourist zone as there are already lodging houses and other facilities located there. A military airport is also located near the county, raising accessibility to the district.
North Korea’s sovereignty will be exercised in the special tourist zone where the North’s laws and regulations on economic development zones and foreign investment will also apply, according to the KCNA.
The Mubong zone will be the second special zone for international tour in the North, along with a special zone at Mt. Kumgang, a scenic resort on the North’s east coast.
Experts said that the latest move is aimed at luring the dollar from foreign tourists by boosting tourism at Mt. Baekdu at a time when inter-Korean exchanges have been suspended since 2010 following a deadly warship sinking.
Near Mubong, the North Koreans built a border crossing sometime between 2009-6-19 and 2014-7-27, but it is unclear if this is to support the Mubong zone or tourism to Samjiyon more generally:
Read the full story here:
N. Korea creates special tour zone near Mt. Baekdu