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Chungcheongbuk-do Ordinance on Enterprises and Investment Promotion

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Chungcheongbuk-do Ordinance on Company Support and Investment Promotion
Ordinance No. 02831 Enacted on November 26, 2004
Ordinance No. 2967 Entirely Revised on December 22, 2006
Ordinance No. 3030 Amended on October 5, 2007
Ordinance No. 3053 Amended on January 1, 2008 (Ordinance on the Establishment of an Administrative Agency)
Ordinance No.3095 Amended on July 1, 2008 (Ordinance on the Establishment of an Administrative Agency)
Ordinance No. 3189 Amended on July 10, 2009

Chapter 1. General Provisions

Article 1 (Purpose)
The purpose of this Ordinance is to efficiently improve industrial structure of the region and revitalize the economy by providing support to domestic and foreign companies that wish to invest in Chungcheongbuk-do.
Article 2 (Definition)
The terms used in this Ordinance shall be defined as follows:
  1. 1. "Foreign Investment" shall refer to such investment as stipulated in Article 2.1.4 of the
    "Foreign Investment Promotion Act" (hereinafter referred to as the "Act")
  2. 2. "Foreign Invested Enterprise" shall denote an enterprise as stipulated in Article 2.1.5 of the Act.
  3. 3. "Operator of facilities to improve foreign investment environment" shall refer to a facility operator described in Article 2.1.6-2 of the Act.
  4. 4. "Foreign Investment Zone" shall refer to such zones as stipulated in Article 18 of the Act.
  5. 5. "Relocated Enterprise" shall refer to an enterprise which has maintained its business for more than 3 years in the metropolitan area (Seoul, Incheon and Gyyeonggi areas) or other areas (hereinafter referred to as "other cities and provinces") and relocates its main office, research center or factory into Chungcheongbuk-do (hereinafter referred to as the "Province").
  6. 6. "Factory" shall indicate such factories as stipulated in Article 2 of the Enforcement Decree of the Industrial Cluster Development and Factory Establishment Act, provided that a worksite is also counted as a factory in the case of services industry.
  7. 7. "Research Center" shall refer to a corporate research institute pursuant to Article 15 of the Technology Development Promotion Act or a research center established in accordance with the Act on Establishment, Management and Development of the Government-Funded Research Institution and the Act on Establishment, Management, and Development of the Government -Funded Research Institution in the Field of Science and Technology."
  8. 8. "Industrial Complex" shall refer to an industrial complex prescribed in Article 2.5 of the Act on Industrial Site Location and Development.
  9. 9. "Individual Industrial Site" shall refer to a site other than industrial complexes or agricultural complexes.
  10. 10. "Headquarters" shall refer to a main office specified in the register of company establishment or a work site situated in the location of the main office.
  11. 11. "Services Industry" shall refer to industries excluding agricultural industry, forestry and fisheries, mining, and manufacturing from the Korea Standard Industrial Classification.
  12. 12. "Investor Companies and Service Businesses" shall refer to companies and service businesses that move their operations into the Province, or expand or newly build operations in the Province
  13. 13. "Collective Relocation" shall refer to relocation of more than two companies in identical or similar sectors into the province in order to create synergies and gain benefits from one another.
  14. 14. "Number of Full-time Workers" shall refer to an average number of employees who provide labor for wages or salaries and fall into any of the following category. The number includes workers who can be identified with objective documentary evidence in accordance with Article 20 of the Dispatched Worker Protection Act.
    1. a. Average number of workers for the latest three months specified in the income tax withholding status notification submitted to the district tax office in accordance with Article 185.1 of the Enforcement Decree of the Income Tax Act
    2. b. Average number of workers for the latest three months who are proved to have paid dues and contribution in accordance with Article 3 of the National Pensions Act
    3. c. Average number of workers for the latest three months who are proved to have paid insurance premiums in accordance with Article 62 of the National Health Insurance Act (except for local insurance policy holders pursuant to Article 6 of the National Health Insurance Act).
  15. 15. "Employment Subsidies" shall refer to the subsidies paid to an enterprise which brings its operations into the Province from the Seoul metropolitan area, or other cities or provinces and newly employs full-time workers.
  16. 16. "Education and Training Subsidies" shall refer to the subsidies paid to an enterprise which relocated into the Province from the Seoul metropolitan area or other cities or provinces, when it educates and trains the full-time workers for business activities.
  17. 17. "Subsidy Support Project" shall refer to a project to provide subsidies for site location, investment, employment and education and training, in order to facilitate relocation of companies from the Seoul metropolitan area, or other cities and provinces into Chungcheongbuk-do.
  18. 18. "Underdeveloped District" shall refer to a district stipulated in the Standards on Government Financial Support to Provinces on Promoting Company Relocation proclaimed by the Ministry of Knowledge Economy <Newly established on July 10, 2009>

Chapter 2. Support for Investment Promotion

Article 3 (Establishment of Investment Committee)
The Chungcheongbuk-do Investment Promotion Committee (hereinafter referred to as the "Committee") shall be established to promote investment by domestic and foreign companies and service businesses in an efficient and systematic manner. <Amended on July 10, 2009>
Article 4 (Organization of the Committee)
  1. ① The Committee shall be composed of about 20 members including a chairman and a vice chairman. The lieutenant governor for economic affairs in the Province shall serve as the chairman, while the vice chairman shall be appointed among the members of the Committee.
  2. ② Other members of the Committee shall be appointed by the Governor of Chungcheongbuk- do (hereinafter referred to as the "Governor") among the following candidates.
    <Amended on October 5, 2007, on January 1, 2008, on July 1, 2008>
    1. 1. Director of planning and management, head of administrative bureau, head of the bureau of economy and commerce, head of the bureau of tourism and culture, and head of the bureau of construction and disaster prevention
    2. 2. Councilor recommended by the Chungcheongbuk-do Provincial Council.
    3. 3. Executives of an investment promotion agency or organization
    4. 4. Lawyer, certified public accountant, and professor with expertise in investment promotion
    5. 5. Others with professional experience and expertise in investment promotion
  3. ③ The term in office of an appointed commissioner shall be two years, but it may be extended. A member nominated to fill a vacancy shall hold the post for the remaining time of the predecessor.
Article5 (Function)
The Committee shall deliberate the following issues <Amended on July 10, 2009>
  1. 1. Basic plan or major policies on investment promotion activities
  2. 2. Issues on various support measures for companies that made investment in the Province
  3. 3. Issues on the designation of investment promotion districts for foreign and domestic companies
  4. 4. Issues on the management of investment promotion fund
  5. 5. Matters relating to payment of rewards for inducing investment
  6. 6. Any other matters the Governor deems necessary for investment promotion
Article 6 (Meeting)
  1. ① Meetings of the Committee shall be convened at the request of the chairman or more than a third of Committee members, and the chairman shall chair the meeting.
  2. ② A quorum for a meeting of the Committee shall be the presence of the majority of all members then in office and all resolutions shall be adopted by the affirmative vote of the majority of the members present.
  3. ③ The Committee shall have an executive secretary to handle general affairs of the Committee, and the secretary shall serve as a director of investment promotion team.
Article 7 (Request for Cooperation)
The chairman may request cooperation from public officials or experts in investment promotion by asking them to speak before the Committee in order to solicit opinions, or asking them to submit a report or provide references related to investment promotion activities.
Article 8 (Allowance, etc.)
The Governor may provide allowances and expenses within the budget to members of the Committee and experts present in the meeting in accordance with the provisions of the Chungcheongbuk-do Ordinance on Compensation for Actual Expenses.
Article 9 (Foreign Investment Promotion Advisor)
  1. ① The Office of Chungcheongbuk-do Foreign Investment Promotion Advisor shall be established for efficient foreign investment promotion activities to speed up administrative procedures and build partnership with relevant agencies.
  2. ② The Foreign Investment Promotion Advisor shall serve as the manager of the foreign investment promotion team and carry out tasks prescribed in Article 22 of the Enforcement Decree of the Foreign Investment Promotion Act (hereinafter referred to as the "Decree") <Amended on July 10, 2009>
Article 10 (Advisory Council)
  1. ① The Governor may forge a contract and operate businesses with an association, consulting firm, or any other company or expert (hereinafter referred to as an "Expert") that has expertise in investment promotion in order to facilitate corporate investment, and the contract shall hold good for two years, but may be extended, if necessary.
  2. ② The Governor may organize the Chungcheongbuk-do Investment Promotion Advisory Council (hereinafter referred to as the "Advisory Council") composed of Korean or foreign nationals with vast experience and expertise in investment promotion, in order to seek advice on devising investment policies or improving investment environment.
  3. ③ The Advisory Council shall be organized with 30 or fewer consultants. The consultants shall take the position for two years, but the term in office can be extended.
  4. ④ <Eliminated on October 5, 2007>
Article 11 (Support for Advisory Council)
The consultants on the Advisory Council shall serve as honorary advisors in principle, however they may receive financial support for expenses on investment promotion activities, including travelling expenses and meetings allowances.
Article 12 (Support for Investment Promotion)
The Governor shall provide a full suite of support for investment promotion with respect to balanced development of cities and counties within the Province. <Amended on July 10, 2009>

Chapter 3. Establishment and Management of Investment Promotion Fund

Article 13 (Establishment of Investment Promotion Fund)
  1. ① The Governor may establish and manage the Chungcheongbuk-do Investment Promotion Fund (hereinafter referred to as the "Fund") in order to secure financial resources to support investment promotion activities.
  2. ② The Fund shall be raised from the following sources. <Amended on October 5, 2007>
    1. 1. Donation by the Province, cities, or counties
    2. 2. Fund established by issuing municipal bonds
    3. 3. Proceeds from fund management.
    4. 4. Other donation, subsidies and loans
  3. ③ The Governor, mayor, or head of a county may appropriate the donation pursuant to Paragraph 2-1 hereof as expenditure budget every fiscal year.
  4. ④ The fund shall be managed until December 31, 2011, however, the management period may be extended, if necessary.
Article 14 (Usage of the Fund)
  1. The fund shall be spent for following purposes. <Amended on July 10, 2009>
    1. 1. Land purchasing cost for sales or lease by domestic or foreign companies
    2. 2. Loans to purchase industrial sites for factories by domestic or foreign companies
    3. 3. Other issues deemed necessary for investment promotion by the Governor
  2. Detailed information on issues such as management of the fund under the provision of Paragraph 1-2 hereof shall be stipulated in the Regulations.
Article 15 (Management and Utilization of Fund)
  1. ① The fund shall be deposited and managed in the provincial account, and allowances shall be deposited in the integrated account under the provision of the Article 7 of the Chungcheongbuk-do Ordinance on Establishment and Management of the Integrated Fund.
  2. ② The Governor shall entrust part or all of the affairs related to the fund management to the Chungcheongbuk-do provincial coffer.
  3. ③ The trust stated in Paragragh 2 hereof shall be subject to agreements, and issues necessary for the trust shall be stipulated in the Regulations.
Article 16 (Reports on Fund Management Plan and Settlement of Account)
  1. ① The Governor shall devise the fund management plan every fiscal year and draw up a statement of accounts within 80 days after closing accounts.
  2. ② The Governor shall submit the fund management plan and statement of accounts under the provision of Paragraph 1 hereof to the Provincial Council every fiscal year
Article 17 (Fund Management Officer)
  1. ① For efficient fund management, a fund treasurer and manager shall be appointed. The head of the economy and trade bureau shall serve as the fund management officer and the manager of the investment promotion team shall serve the fund treasurer. <Amended on October 5, 2007 and on July 10, 2009>
  2. ② Execution and allocation of the fund shall be subject to the Chungcheongbuk-do Regulation on Finance and Accounting.

Chapter 4. Support for Foreign-Invested Enterprises

Article 18 (Administrative Support for Foreign Investment)
Civil affairs related to foreign investment promotion shall take precedence over other civil affairs.
Article 19 (Local Tax Exemption)
Foreign investment as described in Article 9 of the Act shall be entitled to deduction of or exemption from acquisition tax and registration tax, in accordance with the Chungcheongbuk-do Ordinance on Tax Reduction and Exemption.
Article 20 (Support for Industrial Site Location)
The Governor may purchase or lease lands to a foreign invested enterprise, or support the difference between the actual purchasing price and discounted price, in order to attract foreign-invested companies.
Article 21 (Education and Training Subsidy)
  1. ① The Governor may offer subsidies for employee education and training pursuant to Article 14 of the Act within the budget to a foreign invested enterprise which educates and/or trains Chungcheongbuk-do residents to ultimately employ them.
  2. ② Any company that hires and trains 20 or more Chungcheongbuk-do residents shall be eligible for a monthly education and training subsidy of up to KRW 500,000 per capita for up to six months.
Article 22 (Employment Subsidy)
  1. ① The Governor may offer employment subsidies pursuant to Article 14 of the Act within the budget in order to motivate foreign invested companies to create jobs.
  2. ② Any company that hires and trains 20 or more Chungcheongbuk-do residents shall be eligible for a monthly employment subsidy of up to KRW 500,000 per capita for up to six months.
Article 23 (Cash Grant for Foreign Investment)
The Governor shall not provide subsidies pursuant to Articles 20 or 22 of the Ordinance and cash grant for foreign investment pursuant to Article 14.2 of the Act at the same time.
Article 24 (Support for Foreign Investment Zone)
The Governor may support establishment and development of foreign investment zone designated in accordance with Article 18.1 of the Act and Article 25.1 of the Ordinance.
Article 25 (Support for Foreign Investment Environment Improvement)
  1. ① The Governor may provide financial assistance to subsidize part of the management and operating cost of foreign investment environment improvement facilities stated in Article 2.5 of the Ordinance within the budget.
  2. ② Annual rent or usage rate of public properties pursuant to Paragraph 1 shall be subject to the provisions of Articles 28 and 32 of the Chungcheongbuk-do Ordinance on Public Asset Management.
Article 26 (Special Support for Lease or Sale of Public Properties)
The payment in installments of the land purchasing cost, or rent exemption or reduction rate for foreign invested companies pursuant to Article 13.1 of the Act shall be subject to the provisions of the Enforcement Decree of the Public Asset and Properties Management Act and the Chungcheongbuk-do Ordinance on Public Asset Management

Chapter 5. Support for Domestic and Foreign Enterprises

Article 27 (Support for Relocation from the Seoul Metropolitan Area)
  1. ① The Governor may provide subsidies within the budget limitation to a company which moves from the Seoul metropolitan area stated in the annexed Table 1 under the provision of the Standards on Government Financial Support for Companies Relocated to Provincial Areas (hereinafter referred to as the "Standards for Support"). <Amended on October 5, 2007 and on July 10, 2009>
  2. ② Subsidies shall be provided for up to 5 percent of the invested amount over KRW 1 billion to subsidize cost of construction, equipment purchase, and infrastructure establishment pursuant to Paragraph 1 hereof (hereinafter referred to as "Investment"). <Newly established on October 5, 2007>
  3. ③ The Governor may provide subsidies to a company that relocates operations within the Province from the venue for which subsidies have been allocated originally, under the provision of Article 28 of the Ordinance, provided that the subsidy provision shall not overlap with financial support by the Ministry of Knowledge Economy. <Amended on October 5, 2007 and on July 10, 2009>
Article 28 (Support for Relocation from Other Cities or Provinces)
  1. ① The Governor may provide relocation subsidies within the budget limitation to a company that relocates all or part of the head office, research center, factories into the Province in accordance with the standards on financial support stipulated in the annexed Table 2. <Amended on July 10, 2009>
  2. ② The Governor may provide subsidies for main office relocation up to 5 percent of the invested amount in the case of a head office construction as prescribed in Subparagraphs 1 and 2, and up to 50 percent of the invested amount and up to KRW 200 million for three years in the case of a head office construction as prescribed in Subparagraph 3.
    1. 1. In the case of construction of a new building: land purchasing cost and construction cost
    2. 2. In the case of acquisition of an existing building: building acquisition cost
    3. 3. In the case of building lease: rent
  3. ③ The Governor may provide factory relocation subsidies of up to KRW 5 billion to purchase or lease land to build factories and facilities for up to 5 percent of investment over KRW 1 billion.
  4. ④ The Governor may provide subsidies for research center relocation including equipment purchasing cost and relocation cost pursuant to the Subparagraphs of Paragraph 2 hereof, up to KRW 5 billion for up to 5 percent of investment over KRW 1 billion.
Article 29 (Support for Facility Investment)
The Governor may provide an enterprise that builds new factories or expand existing ones with subsidies up to KRW 5 billion for up to 5 percent of investment exceeding KRW 1 billion in accordance with the standards on financial support as prescribed in the annexed Table 2 in any of the following cases.
  1. 1. In the case of new factory establishment: including land purchasing cost (lease), construction cost, and equipment installation cost
  2. 2. In the case of factory expansion: including construction cost, and equipment installation cost
Article 29-2 (Support for Services Industry)
  1. ① The Governor may grant subsidies within the budget limitation to service providers that fulfill the qualifications of the subsidy grant stipulated in the annexed Table 2, provided that support for service companies relocated from the Seoul metropolitan area shall be subject to Article 27 of the Ordinance.
  2. ② The Governor may provide subsidies for land purchase, construction, acquisition of buildings, establishment of infrastructure, or facilities and equipment up to KRW 1 billion for up to 2 percent of investment over KRW 1 billion.
  3. ③ The Governor may provide subsidies on building lease up to KRW 200 million for three years for up to 50 percent of rent. <Newly established on July 10, 2009>
Article 30 (Designation and Support for Investment Promotion Zone)
  1. ① The Governor may designate areas of the following categories as an investment promotion zone in order to promote corporate investment and business establishment in the Province after consultations with related mayors and heads of counties and deliberation by the Committee. <Amended on July 10, 2009>
    1. 1. Local industrial complex and agricultural complex established in accordance with the Act on Industrial Complex and Development
    2. 2. Area that the Governor deems necessary for balanced regional development
  2. ② An enterprise that moves into an investment promotion zone may receive additional loans for up to 20 percent of land purchasing cost and facility construction cost.
Article 31 (Support for Enterprises Relocated from Other Cities or Provinces)
The Governor may apply Articles 21 or 22 of the Ordinance to subsidy provision for an enterprise which relocates operations from other cities or provinces or an enterprise which expands factory facilities in the Province, provided that the financial support shall not exceed KRW 200 million respectively. <Amended on October 5, 2007>
Article 32 (Subsidy Ceiling and Provision Procedures)
  1. ① Subsidies for relocated enterprises as stipulated in Articles 28 and 31 shall not exceed KRW 5 billion in total and KRW 1 billion per company.
    <Amended on October 5, 2007, on April 4, 2008, on July 10, 2009>
  2. ② Subsidies prescribed in Articles 27 through 31 and Article 33 shall be provided only to the companies that sign investment agreements after consultations with the Provincial Government. <Newly established on July 10, 2009>
Article 33 (Special Support for Invested Enterprises)
  1. ① The Governor may provide special support over the ceiling set forth in this Ordinance to an enterprise in any of the following categories.
    <Amended on October 5, 2007, on April 4, 2008, and on July 10, 2009>
    1. 1. An enterprise which hires over 200 regular employees on a daily average or invests over KRW 100 billion
    2. 2. Other cases in which the Governor deems special support is necessary for balanced regional development in the Province.
  2. ② The Governor may provide monthly subsidies of up to KRW 100,000 per capita for up to three years in a bid to support the settlement of employees of invested companies as prescribed in Paragraph 1 hereof. <Newly established on April 4, 2008>
  3. ③ Subsidy provision in accordance with Paragraphs 1 and 2 hereof shall be determined after deliberation by the Committee. <Newly established on April 4, 2008>

Chapter 6. Complementary Provisions

Article 34 (Subsidies for Relocated Enterprise)
  1. ① The Governor may grant subsidies to an enterprise that relocates operations or expands factories in the Province at the request of a mayor or head of a county, in accordance with the accomplishment in investment promotion activities or financial conditions of the city or county. In this case, the Governor shall determine the procedures and ratio of subsidy provision through deliberation by the Committee after consultations with the mayor or head of a county. <Amended on October 5, 2007 and on July 10, 2009>
  2. ② Mayors and heads of counties shall appropriate estimated size of subsidies as expenses in the budget in accordance with Paragraph 1 hereof.
Article 35 (Dispatch of Private Experts)
  1. ① For more effective investment promotion activities, the Governor may request the dispatch of experts from private organizations or agencies related to investment promotion.
  2. ② The Governor may subsidize expenses for investment promotion activities to the experts in accordance with Paragraph 1 hereof, within the budget limitation.
Article 36 (Performance of Invested Enterprises and Follow-up Management)
  1. ① 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.
  2. ② The Governor shall request the invested enterprises to submit a pledge to perform its duty, and review and confirm the execution of investment plans that have been submitted in the first place.
  3. ③ Any invested enterprise shall seek approval from the Governor, if it is to change its choice of business after the launch of the business.
Article 37 (Cancellation or Refund of Subsidies)
  1. ① The Governor shall order the recipients of the subsidies to take correctional measures within a set time frame, if they have failed to carry on the duty assigned with the subsidies, and may cancel, or demand full or partial refund of subsidies from the recipients under the following circumstances:
    1. 1. Receiving subsidies via a false means and methods
    2. 2. Idling factories or closing businesses without a just reason within ten years after the first business day
    3. 3. Scaling back or giving up on the project for which companies were eligible for subsidies
    4. 4. Failing to launch factory construction within three years after the contract on lease or land purchase was signed, or within a year after the company took out loans
    5. 5. Idling factories within two years after completion of the factory construction without a just reason
    6. 6. It is recognized that it is impossible to fulfill the obligation imposed upon it for the purpose of provided subsidies
    7. 7. Reselling a site within 10 years after purchasing the land with subsidies
    8. 8. Failing to maintain the required number of employees within three years after receiving employment subsidies or vocational training subsidies without a just reason
  2. ② The Governor may force the recipient to return subsidies, which shall be refunded pursuant to Paragraph 1 hereof, in accordance with local tax regulations.
Article 38 (Bonuses for Investment Promotion)
  1. ① The Governor may offer bonuses within the budget to any individual, public official, or organization deemed to have made a significant contribution to investment promotion and public officials may receive preferential treatment in promotional opportunities.
  2. ② Detailed information on the bonuses pursuant to Paragraph 1 shall be stipulated in the Regulations.
Article 39 (Enforcement Regulations)
Any issues deemed necessary for the execution of this Ordinance shall be stipulated in the Enforcement Regulations.

Supplementary Provisions

Article 1 (Date of enforcement)
This Ordinance shall be effective from the date of its promulgation.
Article 2 (Abolition of Ordinance)
The Chungcheongbuk-do Ordinance on Foreign Investment Promotion (Ordinance No. 2449 enacted on April 2, 1999) shall be abolished from the date when this Ordinance comes into effect.

Supplementary Provisions (Ordinance No. 2967 Amended on December 22, 2006)

Article 1 (Date of Enforcement)
This Ordinance shall be effective from the date of its promulgation.
Article 2 (Interim Measure)
Subsidy provision for enterprises relocated from the Seoul metropolitan area under Article 27 of the Ordinance shall be subject to previous regulations.

Supplementary Provisions (Ordinance No. 3030 Amended on October 5, 2007)

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

Supplementary Provisions (Ordinance No. 3053 Amended on January 1, 2008, Chungcheongbuk-do Ordinance on the Establishment of an Administrative Agency)

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

Supplementary Provisions (Ordinance No. 3075 Amended on April 4, 2008)

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

Supplementary Provisions (Ordinance No. 3095 Amended on July 1, 3008, Chungcheongbuk-do Ordinance on the Establishment of an Administrative Agency)

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

Supplementary Provisions (Ordinance No. 3189 Amended on July 10, 2009)

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