ENFORCEMENT RULE OF SEOUL METROPOLITAN GOVERNMENT ORDINANCE ON SUPPORT FOR FOREIGN INVESTMENT

Enforcement Rule No. 3458, Nov. 17, 2005

Amended by Enforcement Rule No. 3516, Nov. 16, 2006

Enforcement Rule No. 3549, May 31, 2007

Enforcement Rule No. 3575, Sep. 13, 2007

Enforcement Rule No. 3598, Jan. 31, 2008

Enforcement Rule No. 3756, Jul. 1, 2010

Enforcement Rule No. 3831, Dec. 29, 2011

Enforcement Rule No. 3867, Aug. 9, 2012

Article 1 (Purpose)

The purpose of this Rule is to provide for matters necessary for the enforcement of Seoul Metropolitan Government Ordinance on Support for Foreign Investment.

Article 2 (Definitions)

The terms used in this Rule shall be defined as follows: 

1. The term "foreign-investment-induced business" means the business managed and operated with induced investment in accordance with the foreign investment inducement plan formulated and established by the Seoul Metropolitan City Mayor (hereinafter referred to as the "Mayor");

2. The term "number of full-time employees" means the average number of persons who have provided labor to an enterprise in return for wages, stated as persons with earned income on the report of the current status of the withholding and collection of income tax, which has been submitted to the head of the competent tax office pursuant to Article 185 (1) of the Enforcement Decree of the Income Tax for the preceding three months;

3. The term "new growth engine industries" means the following eight major new growth engine industries fostered by the Seoul Metropolitan Government:

(a) IT convergence industry;

(b) Digital content industry;

(c) Green industry;

(d) Business services industry;

(e) Fashion and design industry;

(f) Financial industry;

(g) Tourism and convention industry; and

(h) Bio-medical industry.

Article 3 (Scope of Medium and Small Enterprises)

"Medium and small enterprise" in Article 7 of the Seoul Metropolitan Government Ordinance on Support for Foreign Investment (hereinafter referred to as the "Ordinance") means a medium and small enterprise defined in Article 2 of the Framework Act on Small and Medium Enterprises.

[This Article Wholly Amended by Rule No. 3756, Jul. 1, 2010]

Article 4 (Guidelines for Payment of Monetary Rewards)

(1) The outcomes of inducing foreign investment under Article 8 of the Ordinance shall be classified by business, and the amount of a monetary reward payable shall be calculated in accordance with the guidelines in Annex 1. 

(2) The amount of a monetary reward under paragraph (1) may be adjusted from 50 to 200 percent within 100 million won, based on the degree of contribution to economic revitalization.

(3) A monetary reward for a declared amount may be paid within the maximum of 20 percent of the monetary reward for an amount which has arrived under paragraph (1) or (2).

(4) If a monetary reward shall be paid for a foreign-invested amount that has arrived after a monetary reward under paragraph (3) was paid, such monetary reward shall be paid after deducting the amount of the monetary reward already paid pursuant to paragraph (3).

(5) No monetary reward shall be paid in addition to a monetary reward under the main sentence of Article 14-3 (2) of the Foreign Investment Promotion Act.

(6) If a person obtains a monetary reward by fraud or other wrongful means, the Mayor shall recover the monetary reward fully or partially, as determined by the Mayor.  

Article 5 (Procedures for Payment of Monetary Rewards)

(1) In order to pay a monetary reward, the division taking full charge of foreign-investment-induced business shall prepare a report on the payment of the reward in Form 1 attached hereto. In such cases, the degree of contribution to the inducement of the investment at each stage, such as negotiations for the inducement of the foreign investment and the execution of a memorandum of understanding, shall be taken into consideration.

(2) When a report on the payment of a monetary reward is prepared in accordance with paragraph (1), the Mayor shall determine the eligibility for the payment of the monetary reward, the amount of the monetary reward, the contribution ratio, etc. through the deliberation by the Committee for Deliberation on Support for Inducement of Foreign Investment under Article 10 (hereinafter referred to as the "committee").  

(3) Monetary rewards shall be paid at least once each year, but a monetary reward not paid during the same year, if any, shall be paid in the following year.

Article 6 (Guidelines for Granting Subsidies)

Employment subsidies under Article 15 and education and training subsidies under Article 16 of the Ordinance shall be granted in accordance with the following guidelines within 200 million won per foreign-invested enterprise. In such cases, new employment or education and training following foreign investment shall be realized within five years from the date the relevant investment is made (where an additional investment is made, within five years from the date such additional investment is made).  

1. Enterprises eligible for subsidies: Foreign-invested enterprises that invest in foreign investment-attracted business or new growth engine business;

2. Requirements  for granting subsidies: Where the following are satisfied;

(a) An increase in the number of regular employees as a result of the foreign investment in the year before an application is filed shall be at least ten persons;

(b) The percentage of foreign investment in the relevant foreign-invested enterprise shall be at least 30 percent. Where a national or a corporation of the Republic of Korea directly or indirectly holds voting shares of stock (including equity shares) of a foreign corporation or enterprise pursuant to Article 121-2 (11) of the Restrictions on Special Taxation Act and Article 116-2 (12) of the Enforcement Decree of the same Act, the portion equivalent to the holding percentage of such shares of stock shall not be deemed foreign investment;

(c) In cases of an education and training subsidy, an enterprise that intends to obtain an education and training subsidy shall have its employees undergo education and training in a vocational education and training institution under the Vocational Education and Training Promotion Act.

3. The amount to be granted: Up to one million won per month shall be granted within the limits of six months for each employee exceeding ten persons in the portion of an increase in the number of regular employees  following foreign investment.

Article 7 (Procedures for Granting Subsidies)

(1) A foreign-invested enterprise that intends to obtain an employment subsidy or education and training subsidy shall submit an application for subsidy to the Mayor in Form 2 attached hereto by referring to Annex 2.

(2) When the Mayor receives an application under paragraph (1), he/she shall determine whether to grant a subsidy and the amount of a subsidy to be granted through deliberation by the Committee for Deliberation on Support for Inducement of Foreign Investment under Article 10.

(3) The Mayor shall grant a subsidy that he/she has determined to grant pursuant to paragraph (2) in a lump, and where he/she fails to grant the subsidy in the relevant year, he/she shall grant it in the following year.

Article 8 (Post Management on Granting Subsidies, etc.)

(1) A foreign-invested enterprise shall maintain, for three years following the year after it receives a subsidy, the number of regular employees and at least 30 percent of the percentage of foreign investment in the year preceding the year an application is filed.  

(2) Where a foreign-invested enterprise obtains a subsidy by deceit or other unlawful means, or violates the conditions of granting the subsidy referred to in paragraph (1), the Mayor shall withdraw the relevant subsidy in proportion to the period of violation.

(3) Where a foreign-invested enterprise that has obtained a subsidy moves to other City/Do, the Mayor may withdraw the relevant subsidy from such foreign-invested enterprise.

Article 9 (Eligibility for Relaxation of Restrictions on Construction Works, etc.)

"Foreign-invested enterprises recognized to have a great impact on the regional economy" in Article 19 of the Ordinance mean any of the following enterprises:

1. A foreign-invested enterprise that builds or expands a factory or place of business to engage in the business of industrial support service business or the business accompanying high technology under Article 121-2 (1) 1 of the Restriction of Special Taxation Act or a strategic industry, if the foreign investment in such business amounts to ten million U.S. dollars or more;

2. A foreign-invested enterprise that builds or expands a factory or place of business to conduct  research and development activities of the business of industrial support service business or the business accompanying high technology under Article 121-2 (1) 1 of the Restriction of Special Taxation Act, if the foreign investment in such business amounts to five million U.S. dollars or more;

3. A foreign-invested enterprise that builds or expands a factory or place of business, if the foreign investment amounts to 100 million U.S. dollars or more.

Article 10 (Committee for Deliberation on Support for Inducement of Foreign Investment)

(1) In order to deliberate on matters concerning the grant of monetary rewards, employment subsidies, and education or training subsidies under Articles 4, 6, and 7, the Mayor shall have a committee for deliberation on support for inducement of foreign investment under his/her jurisdiction.

(2) The committee under paragraph (1) shall be comprised as follows:

1. Chairperson: The Director General in charge of foreign investment;

2. Committee members: The manager of Foreign Investment Inducement Department, the manager of Economic Policy Department, the manager of Employment Policy Department, and persons commissioned by the Mayor from among those who have abundant knowledge and experience relating to foreign investment inducement programs.

(3) The committee under paragraph (1) shall have one secretary, who is the officer in charge of foreign investment, for its efficient operation.  

(4) Other matters necessary for  the operation of the committee shall be determined by the committee chairperson through resolution by the committee.

Article 11 (Abstention and Withdrawal of Committee Members)

(1) If a committee member or the chairperson has a direct interest in a case brought before the committee for deliberation, such committee member or the chairperson shall not participate in the deliberation and resolution on the case.

(2) If a committee member or the chairperson has an excuse under paragraph (1), he/she may withdraw himself/herself from participating in the deliberation and resolution on the case.

(3) If the chairperson is absent from a meeting of the committee due to abstention, withdrawal, etc., an acting chairperson shall be elected by and from among committee members.

[This Article Newly Inserted by Rule No. 3575, Sep. 13, 2007]

ADDENDA

(1) (Enforcement Date)

This Rule shall enter into force on the date of its promulgation.

(2) (Applicability to Eligibility for Payment of Monetary Rewards)

Article 4 shall apply to foreign investments successfully induced on or after June 21, 2004.

(3) (Applicability to Grant of Employment Subsidies, etc.)

Articles 6 and 7 shall apply to new employment realized or the education or training conducted on or after June 21, 2004.

ADDENDUM

This Rule shall enter into force on the date of its promulgation.

ADDENDA

Article 1 (Enforcement Date)

This Rule shall enter into force on the date of its promulgation.

Article 2 Omitted.

ADDENDA

(1) (Enforcement Date)

This Rule shall enter into force on the date of its promulgation.

(2) (Applicability to Guidelines for Grant of Subsidies)

The amended provisions of Article 6 (1) 2 (a) and (1) 3 and Article 7 (1) 2 (a) shall apply to subsidies applied for after this Rule enters into force.

ADDENDA

Article 1 (Enforcement Date)

This Rule shall enter into force on the date of its promulgation.

Article 2 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Rule shall enter into force on the date of its promulgation.

Article 2 (Applicability)

This Rule shall apply to the results of foreign investments that are declared or arrive on or after January 1, 2010.

ADDENDA

Article 1 (Enforcement Date)

This Rule shall enter into force on January 1, 2012.

Article 2 Omitted.

ADDENDUM

This Rule shall enter into force on the date of their promulgation.