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Chungcheongnam-do Ordinance on Foreign Investment Promotion

Ordinance no. 2837 (Enacted on March 10, 2000)
Ordinance no. 3005 (Amended on September 23, 2002)
Ordinance no. 3104 (Amended on July 20, 2004)
Ordinance no. 3112 (Amended on November 10, 2004)
Ordinance no. 3237 (Amended on January 2, 2007)
Ordinance no. 3332 (Amended on July 30, 2008)
Ordinance no.3413 (Amended on April 30, 2009)
Ordinance no.3436 (Amended on September 30, 2009)
Ordinance no. 3567 (Amended on January 01, 2011)
(Revision of the Chungcheongnam-do Ordinance on Administrative Agency and Personnel Management)
Ordinance no. 3737 (Amended on December 31, 2012) Amended Chungcheongnam-do Ordinance of Investment Promotion of Domestic Companies
Ordinance no. 3822 (Amended on October 30, 2013)

Chapter 1. General Provisions

Article 1 (Purpose)
The purpose of this Ordinance is to promote foreign investment by setting rules on regulations prescribed in the Foreign Investment Promotion Act and the Enforcement Decree of the Foreign Investment Promotion Act, and various incentives for foreign investors, foreign-invested companies, and domestic enterprises. (Amended on July 30, 2008, December 31, 2012, and October 30, 2013)

Article 2 (Definition)
The terms used in this Ordinance shall be defined as follows: (Amended on July 20, 2004 and July 30, 2008)
1. "Foreign investment" shall refer to the stipulations in article 2.1.4 of the Foreign Investment Promotion Act (hereinafter referred to as the "Act"). (Amended on October 30, 2013)
2. "Foreign invested-company" shall refer to non-profit or for-profit enterprises in which investment has been made by foreign investors as prescribed in article 2.1.6 of the Act.
3. "Infrastructure" shall refer to the stipulations in article 2 of the Act of Private Investment to Infrastructure. (Amended on October 30, 2013)
4."Operator of Industrial Complex Development Project" shall refer to an individual prescribed in article 16.1 of the Industrial Sites and Development Act.
5. "Factory facilities" shall in article 2 of the Enforcement Decree of the Industrial Placement and Factory Construction Act. (Amended on October 30, 2013)
6. "Operator of facilities for better foreign investment environment" shall refer to an individual who operates facilities to improve foreign investment environment including schools and medical institutions, prescribed in article 2.8 of the Enforcement Decree of the Act. (Amended on October 30, 2013)

Chapter 2. Support System for Foreign Investment

Article 3 (Investment Promotion Committee)
① Chungcheongnam-do Investment Promotion Committee (hereinafter referred to as the "Committee") shall be established for more efficient and systematic foreign investment promotion activities. (Amended on July 30, 2008)
② The Committee shall be composed of 11 or fewer members including one Chairman and one Vice Chairman, provided that the Chungcheongnam-do Governor (hereinafter referred to as "Governor") shall take the post of Chairman, and Lieutenant Governor for Administrative Affairs shall double as Vice Chairman of the Committee.
③ Members of the Committee shall be appointed by the Governor among the following candidates. (Amended on July 30, 2008)
1. Lawmakers on Chungcheongnam-do Provincial Council
2. Executives of groups or agencies related to foreign investment promotion (Amended on October 30, 2013)
3. Lawmakers, certified public accountants, university professors in the field of foreign investment promotion (Amended on October 30, 2013)
4. Others with profound expertise and experiences in foreign investment promotion (Amended on October 30, 2013)
④ The term of an ex-officio member of the Committee shall be determined by the term of office the member holds, and the term of a member of the Committee who is a provincial lawmaker shall be two years, provided that it shall be terminated if the member loses his or her position as provincial lawmaker. A member nominated on recommendation shall hold the post for two years and be allowed for re-nomination. (Amended on July 30, 2008)
⑤ The Council may employ a director to govern general affairs and the director shall become the Head of Investment Location Department. (Amended on July 30, 2008 and January 01, 2011)
⑥ The Committee shall deliberate on the following measures. (Amended on July 30, 2008)
1. Significant measures necessary for basic investment promotion plan or investment promotion activities
2. Various support measures for domestic or foreign-invested companies
3. Measures on planning fund management and settlement
4. Other measures proposed for consideration by the Governor
⑦ The Committee may organize a working group for more effective investment promotion activities, if necessary. (Amended on October 30, 2013)
⑧ The Committee shall be convened when the Chairman recognizes the need. A quorum for a meeting of the Council shall be the presence of a majority of all members and all resolutions shall be adopted by the affirmative vote of a majority of the members present. (Amended on July 30, 2008)
⑨ The Governor may provide allowances and traveling expenses within the budget to members of the Committee who are not civil servants, in accordance with the provisions of the "Chungnam Ordinance on Compensation for Actual Expenses.“ (Amended on July 30, 2008 and October 30, 2013)

Article 4 (Foreign Investment Promotion Office)
① The Investment Location Department shall be established with an aim to effectively support investment promotion activities by encouraging smooth resolution of issues related to investment promotion and building a collaborative network among relevant parties. (Amended on July 30, 2008 and January 01, 2011)
② Deleted on July 30, 2008
③ The Investment Location Department shall take responsibility for the following in accordance with the provision of Article 22 of the Enforcement Decree of the Foreign Investment Promotion Act. (Amended on July 30, 2008, January 01, 2011 and October 30, 2013)
1. Review of civil affairs transferred in accordance with the provisions of Article 17. 3 of the Act. (Amended on October 30, 2013)
2. Promotion of foreign investment, publication and support
3. Resolution of grievances filed by foreign investors or foreign-invested enterprises
4. Administrative support or exchange of information with Investment Support Center, Korea Business Centers, Offices of Korea Trade-Investment Promotion Agency or other foreign investment promotion agencies
5. Verification of the adequacy of the causes of disapproval notified under the provisions of the latter part of Article 17. 5 of the Act (Amended on October 30, 2013)
6. Management of the Council of Foreign Investment Promotion pursuant to Article 23 of the Decree (Amended on October 30, 2013)
7. Other administrative support related to foreign investment

Article 5 (Civil Experts)
①The Governor may seek advice as to promotion of foreign investment from foreign investment promotion experts including lawyers, accountants, international investment experts (including foreign nationals), or consulting firms. (Amended on July 30, 2008)
② In case the Governor seeks advice from such experts as provided in subsection ① hereof, he may enter into an agreement with such experts for that purpose and pay to them the necessary expenses including consulting fees in accordance with the terms of such agreement. (Amended on October 30, 2013)

Article 5-2 (Investment Promotion Advisory Panel)
① The Governor may organize and manage the investment promotion advisory panel (hereinafter referred to as "Advisory Panel") composed of investment promotion experts with vast experience and insight or executives of foreign-invested firms in order to promote new investment or reinvestment.
② The Advisory Panel shall give advice or cooperate on the following issues.
1. Improvement of investment environment in Chungcheongnam-do from infrastructure, education, culture, to housing environment
2. Industrial trend and investment information in Korea and other countries
3. FDI promotion or reinvestment activities
③ The Governor may provide the panel with allowances for business activities, advice or cooperation pursuant to Paragraph 2 hereof, within the budget in accordance with the Chungcheongnam-do Ordinance on Expense Allowances for Provincial Government Officials. (Amended on October 30, 2013)

Chapter 3. Management of Investment Promotion Fund

Article 6 (Establishment and Sources of Fund)
① The Governor may establish and operate a fund for promoting investment in the Province (hereinafter referred to as the "Fund") for the purpose of securing sources of fund to support domestic and/or foreign investment enterprises, in accordance with the provisions of Article 142 of the Local Autonomy Act. (Amended on July 30, 2008, December 31, 2012 and October 30, 2013)
② The Fund shall be raised from the following sources: (Amended on July 30, 2008 and October 30, 2013)
1. Donation by the Province
2. Proceeds from the fund
3. Other donation, subsidies and loans (Amended on October 30, 2013)

Article 6-2 (Deliberation Committee on Investment Promotion Fund Management)
① Chungcheongnam-do Deliberation Committee on Investment Promotion Fund Management (hereinafter referred to as the "Deliberation Committee" shall be established for deliberation of the following:
1. Analyses on fund management performances
2. Drawing up fund management plans and annual reports pursuant to Article 9 of this Ordinance (Amended on October 30, 2013)
3. Matters proposed by the Governor for consideration with regard to management of the fund
② More than a third of members of the Deliberation Committee shall consist of experts from the private sector.
③ Expenses and allowances may be paid to members nominated on recommendation or related experts attending the Committee meeting instead of provincial government officials in accordance with the provisions of the "Chungnam Ordinance on Compensation for Actual Expenses." (Amended on October 30, 2013)
④ The Deliberation Committee shall be organized and governed by the Chungcheongnam-do Investment Promotion Committee.
[Newly established on July 30, 2008]

Article 6-3 (Lasting period of the Fund)
Chungcheongnam-do Investment Promotion Fund shall last five years pursuant to Article 4 of the Basic Act on Fund Management by Local Autonomous Government.
[Newly established on July 30, 2008]

Article 7 (Use of the Fund)
The Fund shall be used for the following purposes: (Amended on October 30, 2013)
1. Purchasing cost of lands to be leased to foreign-invested enterprises
2. A variety of subsidies for enterprises having made investment in the Province
3. Cost of establishing foreign investment zone, purchasing land, building education facilities, and buying houses, etc.

Article 8 (Management of the Fund)
The Governor shall deposit and manage the Fund in a separate account to ensure that the revenue and expenditure be accurately and transparently controlled and managed.

Article 8-2 (Accounting)
Issues on accounting of the Fund shall be subject to Article 3.1.1 of the Chungcheongnam-do Regulations on Financial Accounting and Article 3.1. of the Chungcheongnam-do Enforcement Regulations on Comprehensive Fund Establishment and Management. (Amended on October 30, 2013)
[Newly established on July 30, 2008]

Article 9 (Management Plan of the Fund and Settlement of Account)
① The Governor shall work out the management plan of the Fund in each fiscal year and, prepare a statement of accounts of the Fund within 80 days after closing accounts. (Amended on October 30, 2013)
② The Governor shall submit to the Provincial Assembly the management plan of the Fund and a statement of accounts thereof prepared in accordance with the foregoing provision of Article 9 in each fiscal year. (Amended on October 30, 2013)

Chapter 4. Support for Foreign Investment(Amended on July 20, 2004)

Article 10 (Financial Support)
he Governor may provide financial support for foreign-invested enterprises in the same manner and to the same extent as for domestic enterprises, in accordance with the provisions of "Chungnam Ordinance on Establishment and Utilization of Medium & Small Business Development Fund." (Amended on July 30, 2008 and October 30, 2013)

Article 10-2 (Cash grant on foreign investment)
① The Governor may offer cash grant to foreign-invested enterprises within the budget as prescribed in the Article 14.2.1 of the Act, by taking their contribution to local economic development into account, in particular with regard to job creation and technology development. (Amended on July 30, 2008 and October 30, 2013)
② The proportion and payment method of cash grant, evaluation of applications and aftercare service shall be determined through reviews by the Committee, based on the guidelines for cash grant. (Amended on July 30, 2008 and October 30, 2013)
[Newly established on July 20, 2004]

Article 11 (Subsides for industrial sites)
① In order to promote investment by foreign enterprises, the Governor may purchase part or whole of a specific industrial complex within the budget and put the land for lease. In that case, lease may be reduced in accordance with the provisions of "Chungnam Ordinance on Management of the Public Assets." (Amended on July 30, 2008 and October 30, 2013)
② In case foreign-invested enterprises wish to lease the land owned by the Operator of National Industrial Complex Development Project at a rent lower than the normal rate, the Governor may support the said enterprises by bearing the difference between the original rate and discounted rate, within the budget. (Amended on January 02, 2007 and October 30, 2013)
③ In case foreign-invested enterprises wish to purchase the land owned by the Operator of National Industrial Complex Development Project at a price lower that the normal sales price, the Governor may support the said enterprises by bearing the difference in prices, within the budget. (Amended on January 02, 2007 and October 30, 2013)

Article 12 (Employment Subsidy)
In order to encourage foreign-invested enterprises to create more jobs, the Governor may provide employment subsidies within the budget, in accordance with the provisions of Article 14. 4 of the Act. (Amended on October 30, 2013)

Article 13 (Education and Training Subsidy)
The Governor may provide education and training subsidies within the budget to foreign-invested enterprises that hire and train Korean nationals, in accordance with the provisions of Article 14. 1 of the Act. (Amended on October 30, 2013)

Article 14 (Subsidies for Factory Facilities)
In order to promote foreign direct investment, the Governor may offer subsidies for facilities within the budget to foreign-invested companies that build or expand factory facilities. (Amended on October 30, 2013)

Article 15 (Support to improve living conditions for foreign nationals)
① In order to improve living conditions for foreign nationals, the Governor may purchase and lease the whole or part of the site and/or facilities falling in one of the following categories, or support part of the project cost or operating expenses of the said facilities within the budget. (Amended on July 30, 2008 and October 30, 2013)
1. Establishment or expansion of international schools (including residences for foreign teachers)
2. Operating expenses of international schools established less than three years before
3. Establishment of residential complex for the employees of foreign-invested enterprises
4. Other projects deemed necessary to improve living conditions of foreign nationals
② Based on the provisions of Article 13.1 of the Act, the Province may lease or sell the ownership of lands, factories, or properties, in particular facilities in any of the following categories held, by the Province to foreign-invested companies or operators of projects to improve living conditions for foreign nationals through a discretionary contract. In this case, the lease may be reduced in accordance with the Chungcheongnam-do Public Property Management Ordinance. (Amended on July 30, 2008 and October 30, 2013)
1. International schools pursuant to the Article 60 of the Elementary and Secondary Education Act (Amended on October 30, 2013)
2. Hospitals, clinics, dental clinics, oriental clinics, oriental hospitals, sanatoriums and midwife clinics pursuant to the Article 3.2 of the Medical Service Act (Amended on October 30, 2013)
3. Pharmacy prescribed in the Article 2.3 of the Pharmaceutical Affairs Act (Amended on October 30, 2013)
4. Residences pursuant to the regulations of Article 2.1 of the Housing Act (Amended on October 30, 2013)
5. Other facilities designated and notified by the Minister of Knowledge Economy after deliberation by the Foreign Investment Committee in accordance with the provisions of Article 27 of the Act (Amended on October 30, 2013)
[Amended on July 20, 2004]

Article 16 (Support for infrastructure)
① Subsidies may be offered to lay roads, and build water supply facilities and wastewater treatment plants in Foreign Investment Zone as designated based on the Article 18 of the Act. (Amended on October 30, 2013)
② Only subsidies for land lease shall be granted to the following businesses; (a) A tourist hotel keeping business and a floating tourist hotel keeping business as prescribed in subparagraph 2 (a) and (b) of Article 2 of the Enforcement Decree of the Tourism Promotion Act; (b) A combined recreation business as prescribed in subparagraph 3 (b) of Article 2 of the Enforcement Decree of the Tourism Promotion Act, and a combined amusement facility business as prescribed in subparagraph 5 (a) of the same Article; and (c) International conference facilities as prescribed in subparagraph 3 of Article 2 of the International Conference Industry Promotion Act. In this case, matters concerning support for basic infrastructure in the Foreign Investment Zone involved in the tourism industry shall be determined by the Committee with individual needs taken into account. (Amended on July 30, 2008 and October 30, 2013)
[Amended on July 20, 2004]

Article 17 (Foreign investors eligible for support)
<Name changed on October 30, 2013>
① Foreign investment in any of the following categories shall be eligible for such support under Articles 11 through 15 hereof shall be as follows: (Amended on July 30, 2008 and October 30, 2013)
1. Foreign investment of over a certain amount as stipulated in the Article 25.2 and Article 25.3 of the Decree
2. Foreign investment in industry support businesses or industries accompanied by highly advanced technologies as prescribed in the Article 116.2.1. of the Enforcement Decree of the Restriction of Special Taxation Act (Amended on October 30, 2013)
3. Other foreign investments deemed necessary to foster the specialized local industries by the Governor
② In order for any foreign investment to be eligible for support under subsection ① hereof, the equity interest held by the foreign investor in the enterprise concerned shall be 30/100 or more, or the foreign investor shall be the largest shareholder of the enterprise concerned. (Amended on July 20, 2004 and October 30, 2013)
③ In case Korean nationals or corporations directly or indirectly hold voting stock of a foreign corporation or an enterprise making foreign investment, the portion equivalent to the shares shall not be counted as the equity interest (referred to in subsection ② hereof) held by the foreign investors.
④ The total sum of financial assistance to a foreign-invested enterprise shall not exceed 50% of the investment or 25% of the combined amount of the investment and the reinvestment of retained earnings. (Amended on July 20, 2004 and October 30, 2013)
⑤ Financial assistance including various subsidies to foreign-invested enterprises shall be provided only where the proposed foreign investment has been realized by signing by the said enterprise of a contract for lease or purchase of land. (Amended on October 30, 2013)

Article 17-2 (Special treatment for civil petitions filed by foreign investors)
Any civil petition related to foreign investment shall be first taken care of over others like those to be treated in bulk in accordance with Article 17 of the Act.
[Newly established on July 20, 2004]

Chapter 5. Promotion of Foreign Investment in SOC

Article 18 (Administrative and Financial Support)
When foreign investment has been made in the infrastructure project of the Province in accordance with the Act on Private Participation in Infrastructure, the Governor may provide administrative and financial support or take other measures necessary for guaranteeing profitability to the extent not in violation of the ordinance. (Amended on July 30, 2008 and October 30, 2013)

Article 19 (Preferential Treatment)
The Governor may offer such preferential treatment as necessary, in accordance with the Act on Private Participation in Infrastructure, to any individual who makes proposals for foreign investment projects on infrastructure in the Province. (Amended on July 30, 2008 and October 30, 2013)

Chapter 6. Support for Domestic Enterprises

Article 20 (Relocation subsidies for domestic companies)
Deleted on December 31, 2012

Article 20-2 (Relocation subsidies for companies moving into multi-functional administrative city)
Deleted on December 31, 2012
[Newly established on January 02, 2007]

Article 21 (Special support to large investors)
Deleted on December 31, 2012

Article 21-2 (Support for new corporate investors)
Deleted on December 31, 2012
[Amended on November 10, 2004]

Article 21-3 (Support for municipalities)
① Deleted on December 31, 2012
1. Deleted on December 31, 2012
a. Deleted on December 31, 2012
b. Deleted on December 31, 2012
c. Deleted on April 30, 2009
2. Deleted on December 31, 2012
a. Deleted on December 31, 2012
b. Deleted on December 31, 2012
② Deleted on December 31, 2012
[Newly established on November 10, 2004] [Name Amended on April 30, 2009]

Article 21-4
Deleted on April 30, 2009

Chapter 7. Supplementary Provisions

Article 22 (Request for external experts)
① The Governor may request private enterprises or other institutions and/or organizations related to the inducement of investment to dispatch their experts to the Province, for effective investment promotion activities.
② The Governor may allow the experts dispatched from the private organizations under subsection ① hereof to use the Provincial properties including accommodations and also provide them with expense necessary for investment promotion activities within the budget. (Amended on October 30, 2013)

Article 23 (Aftercare)
The governor may order subsidized companies and parties concerned to submit documents on cases deemed necessary for investment promotion. The governor may have related public officials conduct on-site inspections, if necessary. (Amended on October 30, 2013)

Article 24 (Revocation of support)
① The governor shall cancel, or demand full or partial refund of subsidies from the recipients under the following circumstances: (Amended on October 30, 2013)
1. Closing or idling factories within three years of the initial date of operation without a just reason (Amended on October 30, 2013)
2. Receiving subsidies via a false means and methods (Amended on October 30, 2013)
3. Giving up or canceling businesses selected to be companies eligible for subsidies (Amended on October 30, 2013)
4. Failing to launch factory construction within two years after the lease contract was signed (Amended on October 30, 2013)
5. Construction of factories lagging far behind the plan or completion seemingly almost impossible (Amended on October 30, 2013)
6. Dismissal of employees, for whom subsidies were provided, without a just reason within three years after receiving education and training subsidies
7. Dismissal of employees, for whom subsidies were provided, without a just reason within three years after receiving employment subsidies
8. Any other cases considered unable to achieve the goal of subsidy provision
② The Governor may force the recipient to return subsidies, which shall be refunded pursuant to subsection ① hereof, in accordance with local tax regulations. (Amended on October 30, 2013)

Article 25 (Rewards)
① The Governor many offer bonuses within the budget to anyone (including organizations or institutions) deemed to have made a significant contribution to investment promotion. (Amended on December 31, 2012 and October 30, 2013)
② Public officials who have made contribution to investment promotion may receive benefits such as promotion or incentives to the extent defined by relevant laws. (Amended on October 30, 2013)
[Amended on July 20, 2004]

Article 26 (Enforcement Regulation)
Any issue deemed necessary for execution of this Ordinance shall be stipulated in the Enforcement Regulations.

Addendum (Ordinance no. 2837)

①(Date of Enforcement) This Ordinance shall be effective from the date of its promulgation.
②(Abolished Regulations) Concurrently with enforcement of this Ordinance, Chungnam Regulations on the Office of Foreign Investment Promoters and the Foreign Investment Deliberation Committee (Regulation No. 2720) shall be abolished.

Addendum (Ordinance no. 3005)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3104)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3112)

①(Date of Enforcement) This Ordinance shall be effective from the date of its promulgation.
②(Interim Measure) Recipients of relocation subsidies stated in Article 20 shall be confined to companies that have signed the contract after April 1, 2004.

Addendum (Ordinance no. 3237)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3332)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3413)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3436)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3567 January 01, 2011)
(Revision of the Chungcheongnam-do Ordinance on Administrative Agency and Personnel Management)

Article 1 (Date of Enforcement)
This Ordinance shall be effective from the date of its promulgation.

Article 2 (Amendment of another Ordinance)
① -⑧ (Omitted)
⑨ The Chungcheongnam-do Ordinance on foreign investment promotion shall be amended as the following:
“The investment promotion advisor” of Article 3.5 shall be changed to “the Head of Investment Location Department” and “the Office of Investment Promotion Advisor”of Article 4.1 and 4.3 shall be changed to “the Investment Location Department.”
⑩ - (52) (Omitted)

Article 3 (Relationship with other Ordinances in accordance with the organizational restructuring)
Other Ordinances shall state “education and cooperation law officer” for “education law officer”, “Green Agriculture Division” for “Agriculture Division”, “Provincial Government Relocation Policy Division” for “Residents Support Division”, “Development Support Division” for “Development Division”, “Seoul Office” for “Seoul investment and Trade Support Office” and “Baekje Cultural Complex Management Office” for “Baekje Cultural Complex Management Office”.

Addendum (Ordinance no. 3737)
(Amended Chungcheongnam-do Ordinance of Investment Promotion of Domestic Companies)

This Ordinance shall be effective from the date of its promulgation.

Addendum (Ordinance no. 3822)

This Ordinance shall be effective from the date of its promulgation.
 
 

 

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