GANGWON-DO RULE ON SUPPORT FOR FOREIGN INVESTMENT PROMOTION

Rule No. 2616, Nov. 16, 2002

Article 1 (Purpose)  The purpose of this Rule is to provide for matters delegated by the Gangwon-do Ordinance on Support for Foreign Investment Promotion (hereinafter referred to as the "Ordinance") and those necessary for the enforcement thereof.

Article 2 (Definitions)  The definitions of terms used in this Rule shall be as follows:

  1. The term "location subsidy" means any subsidy granted for the purpose of providing either part of the selling price for the supply of a site for a facility at a low price or the difference between normal rent and reduced rent in case of constructing or extending, in a foreign investment area or any other area deemed necessary for the investment of foreign capital in Gangwon-do by the Governor, a factory facility through which the manufacturing industry, high-tech industry or industrial support service industry is carried on or an establishment through which the tourist industry is carried on;

  2. The term "employment subsidy" means any subsidy granted in case of hiring new full-time employees after constructing or extending a factory facility (meaning an establishment in case of tourist industry);

  3. The term "education and training subsidy" means any subsidy granted for the purpose of providing part of the expenses incurred in respect of education and training of full-time employees newly hired after the construction or extension of a factory facility (meaning an establishment in case of tourist industry) to enable those employees to be proper for enterprise activities, if such education and training are conducted;

  4. The term "facility subsidy" means any subsidy granted for the purpose of providing part of the expenses incurred in the construction or extension of a factory facility (meaning an establishment in case of tourist industry), if any;

  5. The term "factory facility" means any building (including attached facilities), structure, machinery, etc. necessary to manufacture, process or repair goods in a factory site;

  6. The term "consulting expenses" means expenses directly invested in the consultation including analysis of propriety, etc. for the purpose of promoting foreign investment; and

  7. The term "number of full-time employees" means the average number of persons with earned income for the most recent three-month period for which they work in the factory or establishment in question for the purpose of earning wages and are entered in a report on the status of income tax withholding submitted to a competent tax office under Article 185 (1) of the Enforcement Decree of the Income Tax Act.

Article 3 (Investment Promotion Advisors)  (1) The investment promotion advisors of Gangwon-do referred to in Article 5 of the Ordinance (hereinafter referred to as the "advisors") shall be commissioned by the Governor from among those persons who have much experience and knowledge on relevant affairs and who fall under any of the following subparagraphs:

  1. Experts belonging to domestic or foreign institutions specializing in investment;

  2. Officers of institutions or organizations and professors relevant to the promotion of foreign investment;

  3. Other persons deemed necessary by the Governor.

  (2) The advisors shall present advisory opinions to the Governor of Gangwon-do on the promotion of foreign investment, implement publicity activities necessary for ensuring that foreign-invested enterprises are located in Gangwon-do and for such promotion, and collect and provide information necessary therefor.

  (3) The scope of those allowances which may be paid to provide support for activities of the advisors under Article 5 (2) of the Ordinance shall be as follows:

  1. Fundamental expenses for the presentation of advisory opinions and for data collection activities; and

  2. Other expenses including expenses incurred in the participation in events for foreign investment promotion activities.

  (4) The advisors shall hold office for a term of one year and may be commissioned consecutively for further terms.

  (5) If advisors desire to resign their office or are deemed inadequate due to the impairment of dignity or any other reason or if it is difficult for them to perform their duties due to diseases, the Governor of Gangwon-do may dismiss them from their office.

Article 4 (Location Subsidy)  (1) The difference between normal rent and reduced rent which is provided under Article 8 (2) of the Ordinance shall not be paid in excess of ten years from the date of the first payment thereof.

  (2) The difference between the normal selling price and the reduced selling price which is provided under Article 8 (3) of the Ordinance shall not be paid in excess of the area of a factory site according to the standard factory area rate by industry announced by the Minister of Commerce, Industry and Energy under Article 8 of the Industrial Cluster Development and Factory Establishment Act.

  (3) A subsidy under paragraph (2) shall not exceed thirty percent of the normal selling price, and a person who is granted the subsidy shall, for not less than ten years, carry on any business referred to in a business plan submitted at the time when he/she makes an application for the subsidy, unless there is any justifiable reason to the contrary.

  (4) A person who intends to receive a subsidy shall submit an application prepared in accordance with the attached Form 1 to the Governor of Gangwon-do within one year after the date of an agreement on rental or sale.

Article 5 (Employment Subsidy)  (1) An employment subsidy referred to in Article 9 of the Ordinance may, in case of hiring twenty persons or more residing in Gangwon-do for six months or more as full-time employees, be granted to the extent of five hundred thousand won per month for each employee exceeding twenty within the limits of six months: Provided, That the employment subsidy shall, when part thereof is granted from the National Treasury, be granted as aforesaid, regardless of areas of such residence.

  (2) A subsidy under paragraph (1) shall not exceed one hundred million won per enterprise, and the employment of those persons with respect to whom the subsidy is granted shall be maintained for a minimum period of three years from the date of such granting.

  (3) A person who intends to receive a subsidy shall submit an application prepared in accordance with the attached Form 2 to the Governor of Gangwon-do.

Article 6 (Education and Training Subsidy)  (1) An education and training subsidy referred to in Article 10 of the Ordinance may, in case of conducting any education and training to newly employ twenty Koreans or more, be granted to the extent of five hundred thousand won per month for each such Korean within the limits of six months.

  (2) A subsidy under paragraph (1) shall not exceed one hundred million won per enterprise, and the employment of those persons with respect to whom the subsidy is granted shall be maintained for a minimum period of three years from the date of such granting.

  (3) The term "education and training" used in paragraph (1) means any education and training conducted in public vocational education and training facilities (including polytechnic colleges established under the Polytechnic College Act) established and operated by the State, local governments or public organizations under Article 3 of the Enforcement Decree of the Vocational Training Promotion Act, vocational education and training facilities provided for by the Ordinance of the Ministry of Labor, junior colleges or higher educational institutions, parent companies, or other institutions recognized by the Governor of Gangwon-do.

  (4) The scope, etc. of the granting of a subsidy under paragraph (1) shall be deliberated on and decided by the Foreign Investment Promotion Council of Gangwon-do.

  (5) A person who intends to receive a subsidy shall submit an application prepared in accordance with the attached Form 3 to the Governor of Gangwon-do.

Article 7 (Facility Subsidy)  (1) A facility subsidy referred to in Article 11 of the Ordinance may, in case of the construction or extension of a factory facility costing thirty hundred million won or more, be granted to the extent of two hundred million won per enterprise within the limits of two percent of an amount exceeding thirty hundred million won.

  (2) The scope, etc. of the granting of a subsidy under paragraph (1) shall be deliberated on and decided by the Foreign Investment Promotion Council of Gangwon-do.

  (3) A person who intends to receive a subsidy shall submit an application prepared in accordance with the attached Form 4 to the Governor of Gangwon-do within one year after the date of the commencement of business by the registration of a factory in case of the construction thereof and within one year after the date of the construction completion of a facility of a factory in case of the extension thereof.

Article 8 (Provision of Consulting Expenses)  (1) Consulting expenses referred to in Article 12 of the Ordinance may be provided to the extent of one hundred million won within the limits of one percent of the settled amount of foreign investment: Provided, That such consulting expenses shall not exceed fifty percent of the expenses incurred in respect of a consultation for investment held by a foreign investor or foreign-invested enterprise.

  (2) A person who intends to receive consulting expenses shall submit an application prepared in accordance with the attached Form 5 to the Governor of Gangwon-do within one year after the date of the commencement of business.

Article 9 (Special Support for Large Foreign-invested Enterprise)  A large foreign-invested enterprise to which special support may be lent under Article 17 of the Ordinance shall be as follows:

  1. A large foreign-invested enterprise in which foreigners invest one hundred million dollars or more; or

  2. A large foreign-invested enterprise the number of full-time employees of which are not less than three hundred a day.

Article 10 (Ex Post Facto Management of Foreign-invested Enterprises)  (1) The Governor of Gangwon-do may examine the following matters for the ex post facto management of those foreign-invested enterprises which are granted subsidies:

  1. Status of the implementation of business plans;

  2. Whether or not to use the provided funds appropriately;

  3. Whether there is any reason for the revocation and return of support, etc.; and

  4. Other matters deemed necessary for the accomplishment of the purpose of the granting of subsidies.

  (2) If it is deemed that a granted subsidy is used for any other purpose or that it is difficult to accomplish the purpose of such granting as a result of examination under paragraph (1), the Governor of Gangwon-do may give orders to modify business plans, to make corrections and to fulfill obligations within six months: Provided, That in any case in which there is any unavoidable reason, he/she may, only once, extend the compliance with such orders for a period initially requested by the foreign-invested enterprise in question upon application made thereby.

Article 11 (Revocation, Return, etc. of Support)  (1) If a site for a facility purchased after being granted a location subsidy under Article 4 is disposed of within ten years after the date of the commencement of business without any justifiable reason, the Governor of Gangwon-do shall recover the location subsidy in proportion to the operation or business period.

  (2) If those persons with respect to whom subsidies are granted under Articles 5 and 6 are dismissed within three years without any justifiable reason, the Governor of Gangwon-do shall recover the subsidies in proportion to the employment period.

  (3) If those persons who are given orders to make corrections, etc. under Article 10 (2) fail to comply therewith, the Governor of Gangwon-do shall have them return subsidies proportionate to part thereof used for other purposes or unjustifiably and shall suspend the provision of additional support.

Article 12 (Standards for Payment of Incentives)  (1) Those persons who may be paid incentives under Article 22 of the Ordinance shall be public officials belonging to Gangwon-do or civilians making agreements on service therewith who actively endeavor to promote foreign investment as well as to ensure that foreign-invested enterprises are located in Gangwon-do for the purpose of promoting local economy and who produce any performance as a result of such endeavors.

  (2) The Foreign Investment Promotion Council of Gangwon-do shall deliberate on and decide the scale of foreign investment with respect to which incentives may be paid under paragraph (1) and whether or not to pay incentives, taking into account annual performance, only if such foreign investment is made, including the payment completion of the amount thereof stated in a report thereon.

  (3) The standards for the payment of incentives with respect to the scale of foreign investment under paragraphs (1) and (2) shall be as shown in the attached Table:

Article 13 (Application Mutatis Mutandis)  Except as provided for in this Rule, the Gangwon-do Ordinance on the Management of Subsidies and the Gangwon-do Rule on the Management of Subsidies shall apply mutatis mutandis to the payment of subsidies.

ADDENDA

  (1) (Enforcement Date)  This Rule shall enter into force on the date of its promulgation.

  (2) (Repeal of Rule)  The Gangwon-do Rule on the Operation of the Foreign Investment Promotion Office and the Foreign Investment Promotion Council shall be repealed.