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BUSAN METROPOLITAN CITY ENFORCEMENT RULE OF THE ORDINANCE ON PROMOTING ATTRACTION OF ENTERPRISES AND INVESTMENT

By Investment and Trade Division Nov 8, 2023 696  Views
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BUSAN METROPOLITAN CITY ENFORCEMENT RULE OF THE ORDINANCE ON PROMOTING ATTRACTION OF ENTERPRISES AND INVESTMENT

Wholly Amended by Enforcement Rule No. 4121, Apr. 5, 2023

CHAPTER I GENERAL PROVISIONS

  • Article 1 (Purpose)
  • The purpose of this Rule is to prescribe matters necessary for the enforcement of the Busan Metropolitan City Ordinance on Promoting Attraction of Enterprises and Investment.
  • Article 2 (Definitions)
  • The terms used in this Rule are defined as follows:
    • 1. The term "small and medium enterprise" means an enterprise defined in Article 2 (1) of the Framework Act on Small and Medium Enterprises;
    • 2. The term “middle-standing enterprise” means an enterprise defined in subparagraph 1 of Article 2 of the Special Act on the Promotion of Growth and the Strengthening of Competitiveness of Middle-Standing Enterprises;
    • 3. The term "large enterprise" means an enterprise that exceeds the size of enterprises defined in subparagraph 1 or 2;
    • 4. The term "amount of investment" means an amount of money invested by an investment enterprise in items for which an investment subsidy is provided;
    • 5. The term "number of regular employees" means the number of employees who provide labor on a regular basis at an independent place of business for the purpose of wages;
    • 6. The term "number of new regular employees" means the number of people relocating to a place of investment business among the number of regular employees at an existing place of business outside the City area in the case of an investment enterprise relocating to the jurisdiction, and the number of newly employed persons at a place of investment business in the case of a newly constructed or expanded investment enterprise;
    • 7. The term "existing place of business" means all places of business located in the Republic of Korea where an enterprise conducts its operations;
    • 8. The term "place of investment business" means a place in the City area where an enterprise newly establishes a place of business and continuously conducts its operations;
    • 9. The term "main type of business" means a type of business an investment enterprise engages in and the average sales of which account for the largest share of its total sales, as verified by a certificate of employment insurance enrollment.
  • Article 3 (Methods for Calculating Number of Regular Employees)
  • (1) The number of regular employees shall be calculated by the following methods:
    • 1. An existing place of business: The annual average number of employees;
    • 2. A place of investment business: The average number of employees during the business implementation period under Article 25 (1).
  • (2) The number of regular employees shall be authenticated by the following methods:
    • 1. For domestic enterprises: Data on the payment of employment insurance premiums under Article 13 of the Act on the Collection of Insurance Premiums for Employment Insurance and Industrial Accident Compensation Insurance (separate management numbers shall be allocated for a place of investment business and an existing place of business): Provided, That, where necessary, authentication for contact centers may be provided through payroll records;
    • 2. For foreign-invested enterprises: Reports on the status of withholding submitted to the competent tax office pursuant to Article 185 (1) of the Enforcement Decree of the Income Tax Act or data on the payment of employment insurance premiums under subparagraph 1.
  • Article 4 (Types of Investment)
  • The types of investment by enterprises eligible for subsidies under the Busan Metropolitan City Ordinance on Promoting Attraction of Enterprises and Investment (hereinafter referred to as the "Ordinance") shall be as follows:
    • 1. Relocation to the jurisdiction;
    • 2. New construction or expansion;
    • 3. Relocation within the City area;
    • 4. Green industries;
    • 5. Large-scale investment;
    • 6. Repatriating enterprises;
    • 7. Foreign investment.
  • Article 5 (Composition and Operation of Busan Metropolitan City Consultative Council on Attraction of Investment)
  • (1) The Busan Metropolitan City Consultative Council on the Attraction of Investment under Article 4 of the Ordinance (hereinafter referred to as the "Consultative Council") shall be composed of not more than 19 members, including one chairperson and two vice chairpersons, in consideration of gender equality.
  • (2) Members of the Consultative Council under paragraph (1) shall be appointed or commissioned by the Mayor from among the following persons, and the number of the members who are public officials shall not exceed 3/10 of the total number of the members
    • 1. Deputy Mayor, Director-General, or Chief Officer of Busan Metropolitan City (hereinafter referred to as the "City");
    • 2. Persons recommended by the Busan Metropolitan Council;
    • 3. Heads of institutions related to the attraction of enterprises and investment;
    • 4. Persons with extensive knowledge of and experience in the attraction of enterprises and investment.
  • (3) Each commissioned member shall hold office for a term of two years and may be re-appointed for only one consecutive term. The term of office for a substitute member shall be for the remaining term of the predecessor, except in cases where the remaining term is less than one year, in which case a substitute member may not be appointed.
  • (4) The Vice Mayor for Economic Affairs shall serve as the chairperson of the Consultative Council, and the Chief Officer of Digital Economy Innovation Office shall serve as one of the vice chairpersons, and the other vice chairperson shall be elected by and from among commissioned members.
  • (5) If the chairperson is unable to perform his or her duties due to any unavoidable cause, the vice chairpersons shall act on behalf of the chairperson, and if both the chairperson and vice-chairpersons are unable to perform the duties due to any unavoidable cause, a member designated in advance by the chairperson shall act on his or her behalf.
  • (6) The chairperson shall convene meetings of the Consultative Council. In such cases, a majority of the members of the Consultative Council shall constitute a quorum and any resolution thereof shall require the concurring vote of a majority of those present.
  • (7) Articles 34 and 35 of the Ordinance shall apply mutatis mutandis to matters regarding the dismissal and exclusion of, challenge to, and recusal of, members of the Consultative Council.
  • (8) The Consultative Council shall have one executive secretary to perform the business affairs thereof, and the executive secretary shall be the head of the division responsible for the attraction of investment.
  • (9) Allowances, travel expenses, etc. may be paid to commissioned members who attend meetings of the Consultative Council within the budget.

CHAPTER II SUPPORT FOR INVESTMENT BY DOMESTIC ENTERPRISES
SECTION 1 Standards for Provision of Subsidies

  • Article 6 (Standards for Provision of Subsidies to Domestic Enterprises)
  • (1) The Mayor of Busan Metropolitan City (hereinafter referred to as the "Mayor") may provide subsidies to enterprises that satisfy all of the following conditions:
    • 1. A corporation that has continuously maintained its headquarters, factories, research institutes, etc. in the Republic of Korea for at least three consecutive years or a new corporation in which such corporation holds at least 50/100 of the equity;
    • 2. It shall mainly engage in a type of business referred to in Article 3 of the Ordinance;
    • 3. The existing place of business shall have at least 20 regular employees;
    • 4. The place of investment business shall have at least 20 new regular employees;
    • 5. The amount of investment shall be at least two billion won.
  • (2) An enterprise that intends to relocate within the City area pursuant to subparagraph 1 of Article 4 that applies for a subsidy shall satisfy all of the following requirements:
    • 1. Independent places of business, such as headquarters, factories, research institutes, etc. located outside the City area, shall be relocated within the City area;
    • 2. It shall engage in a type of business at a place of investment business which is in the same group in accordance with the Korean Standard Industrial Classification as the type of business it engages in at the existing place of business.
  • (3) An enterprise intending to newly construct or expand operations pursuant to subparagraph 2 of Article 4 shall do so for the purpose of expanding the existing business or for entering into a closely related business associated with the existing business.
  • Article 7 (Criteria for Recognition of Research and Development Personnel)
  • The criteria for the recognition of research and development personnel under Article 9 (3) of the Ordinance shall be as specified in Appendix 4.
  • Article 8 (Terms and Conditions for Enterprise)
  • (1) An enterprise that has received land subsidies under Article 12 of the Ordinance shall close or sell the existing place of business prior to the completion of the investment, and if there is any unavoidable cause, shall close or sell the existing place of business, prior to the end of the business implementation period.
  • (2) A newly constructed or expanded enterprise that receives a capital investment subsidy referred to in Article 11 of the Ordinance shall maintain the existing place of business as indicated in the business investment plan during the business implementation period (closure, sale, lease, reduction, etc. of the existing place of business shall be prohibited): Provided, That this shall not apply to temporary places of business established for a new corporation and existing places of business located within the over-concentration control region under Article 6 (1) 1 of the Seoul Metropolitan Area Readjustment Planning Act.
  • (3) Notwithstanding paragraph (2), where part of the facilities of the existing place of business is to be relocated to a place of investment business, such intention shall be included in the business investment plan in Form 1 submitted when filing an application for a subsidy under Article 19, and the Mayor shall determine whether to permit such relocation, following deliberation by the Busan Metropolitan City Deliberation Committee on the Operation of the Investment Promotion Fund (hereinafter referred to as the "Committee").
  • Article 9 (Standards for Business Expansion of Enterprises within City Area)
  • Cases where an enterprise under Article 13 of the Ordinance expands the scale of operations by more than twice the size mean any of the following:
    • 1. Where the area of the site for a place of business subject to relocation or the total floor area of a building at such place of business expands more than double;
    • 2. Where the enterprise newly hires at least twice the number of regular employees at the place of business subject to relocation;
    • 3. In the case of an enterprise in the knowledge service industry, where sales are expected to increase by more than twice the sales of the previous year.
  • Article 10 (Standards for Subsidization of Enterprises Investing in Knowledge Service Industry)
  • (1) Any enterprise investing in the knowledge service industry under Article 15 of the Ordinance shall satisfy all of the following standards when applying for a subsidy:
    • 1. The conditions under Article 6 (1) 1 shall be satisfied;
    • 2. The number of regular employees at the existing place of business shall consist of at least 10 persons;
    • 3. The number of new regular employees at the place of investment business shall consist of at least 10 persons;
    • 4. The amount of investment shall be at least 500 million won.
  • (2) An enterprise investing in the knowledge service industry shall comply with the following standards:
    • 1. An enterprise relocating to the jurisdiction: Article 6 (2);
    • 2. A newly constructed or expanded enterprise: Article 6 (3);
    • 3. The terms and conditions for enterprises under Article 8.
  • Article 11 (Standards for Subsidization of Contact Centers)
  • (1) A contact center under Article 15 of the Ordinance shall satisfy all of the following standards when applying for a subsidy:
    • 1. The conditions under Article 6 (1) 1 shall be satisfied;
    • 2. The number of regular employees at the existing place of business shall consist of at least 20 persons;
    • 3. The number of new regular employees at the place of investment business shall consist of at least 10 persons;
    • 4. The amount of investment shall be at least 300 million won.
  • (2) A contact center shall satisfy the following standards:
    • 1. An enterprise relocating to the jurisdiction: Article 6 (2);
    • 2. A newly constructed or expanded enterprise: Article 6 (3);
    • 3. The terms and conditions for enterprises under Article 8.
  • (3) The Mayor shall disburse subsidies to the trustor where the management of operations of a contact center is entrusted.
  • (4) Notwithstanding paragraph (3), if the entitlement to subsidies is expressly stipulated in an entrustment contract between a trustor and a trustee or if a separate power of attorney of a trustor exists, a subsidy may be paid to a trustee.

Section 2 Provision of Subsidies

  • Article 12 (Details of Subsidies)
  • (1) The Mayor may provide investment subsidies under Articles 11 and 12 of the Ordinance within the limits specified in Appendix 1 based on the size of the enterprise.
  • (2) The scale and limits of subsidization for enterprises investing in the knowledge service industry and contact centers under Article 15 of the Ordinance shall be as specified in Appendix 2.
  • (3) The scope of the amount recognized as the amount of capital investment under Article 11 of the Ordinance shall be as specified in Appendix 3.
  • (4) If an existing building is purchased, the cost of purchasing such building shall be recognized as capital investment costs only where any change is made to the primary use of the building.
  • Article 13 (Scope of Investment Subsidies)
  • (1) Subsidies may only be provided within the budget, and the total amount of subsidies granted to a single enterprise shall not exceed 10 billion won: Provided, That this shall not apply to subsidization of large-scale investments.
  • (2) Notwithstanding Appendix 2, the scope of subsidization of enterprises investing in the knowledge service industry and of a contact center under Article 12 (2) shall not exceed the total amount of investment made by the relevant enterprises.

CHAPTER III SUPPORT FOR FOREIGN INVESTMENT

  • Article 14 (Foreign-Invested Enterprises Eligible for Subsidies)
  • Foreign-invested enterprises eligible for subsidies shall be as follows:
    • 1. An enterprise that satisfies the requirements prescribed in subparagraph 1 of Article 22 of the Ordinance;
    • 2. A foreign research institute conducting research and development, with at least five full-time researchers;
    • 3. A foreign-invested enterprise which has business entities in at least three countries and establishes a regional headquarters located within the City area managing the operations of at least two countries;
    • 4. An operator of establishments built to improve a foreign-investment environment defined in Article 2 (1) 7 of the Foreign Investment Promotion Act.
  • Article 15 (Standards for Provision of Subsidies to Foreign-Invested Enterprises)
  • (1) The standards for the provision of land subsidies to foreign-invested enterprises under Article 20 (1) 1 of the Ordinance shall be as follows:
    • 1. Land purchase cost: Within 30/100 of the purchase price;
    • 2. Building lease: Within 50/100 of the rent for a period of two years.
  • (2) The Mayor may provide a capital investment subsidy to a foreign-invested enterprise under Article 20 (1) 2 of the Ordinance in an amount not exceeding 50/100 of the total amount of the capital investment cost.(3) The Mayor may impose necessary conditions to the subsidies under paragraphs (1) and (2), such as prohibition of disposal of facilities for 10 years.
  • Article 16 (Standards for Subsidization of Consulting Fees)
  • (1) Enterprises eligible for and the limits to subsidization of consulting fees under Article 20 (1) 3 of the Ordinance shall be as follows:
    • 1. An enterprise falling under subparagraph 2 or 3 of Article 14: Not more than 20 million won;
    • 2. Other enterprises: Not more than 10 million won.
  • (2) Consultation under paragraph (1) shall be limited to consulting firms (referring to accounting firms, law firms, etc.) located in the Republic of Korea.
  • Article 17 (Special Cases concerning Subsidization of Foreign-Invested Enterprises)
  • Notwithstanding Article 46 of the Ordinance, subsidies may be provided to enterprises prescribed in Article 23 of the Ordinance in an amount not exceeding 50/100 of the total amount of investment made by the enterprises.

CHAPTER IV PROCEDURES FOR SUBSIDIES

  • Article 18 (Attraction of Investment Enterprises)
  • (1) An enterprise that intends to apply for a subsidy shall enter into a memorandum of understanding on investment or an agreement equivalent thereto (hereinafter referred to as "investment agreement") with the City before the following dates of investment:
    • 1. If an application filed for includes a land subsidy and a tenancy subsidy: The date of the initial contract;
    • 2. If an application is filed for a capital investment subsidy: The initial date of reporting the commencement of construction;
    • 3. If an application is filed for a facility and equipment subsidy: The date of tenancy of the place of investment business;
    • 4. If an application is filed for a subsidy before the date of reporting the commencement of construction: The date of the application for the subsidy.
  • (2) If an investment enterprise fails to apply for a subsidy within three years from the date of the investment agreement, the investment agreement shall become null and void.
  • Article 19 (Application for Subsidies)
  • (1) Subsidy application due dates for investment enterprises shall be as follows:
    • 1. If an application is filed for a land subsidy or a tenancy subsidy: One year from the date of contract;
    • 2. If an application is filed for a capital investment subsidy: Three months from the date of reporting the commencement of construction;
    • 3. If an application is filed for a facility and equipment subsidy: Three months from the date of tenancy of the place of investment business;
    • 4. If an application for a land subsidy is filed concurrently with an application for a capital investment subsidy: The earlier of the two due dates specified in subparagraphs 1 and 2;
    • 5. In cases of investment in the knowledge service industry and in a contact center: The earlier of the two due dates referred to in subparagraphs 1 and 3;
    • 6. In cases of subsidization of consulting fees for foreign investment: One year from the date the business commences.
  • (2) An investment enterprise shall submit the following documents to the Mayor when filing an application for a subsidy:
    • 1. A business investment plan in Form 1;
    • 2. A subsidy application in Form 9 (in cases of a foreign investment, an application for each subsidy in Forms 2 through 8) and evidentiary documents;
    • 3. Other documents the Mayor deems necessary.
  • (3) The Mayor may, upon receipt of an application for a subsidy under paragraph (2), waive the requirement for the submission of documents that are accessible for inspection through the administrative data matching system by accepting the submission of a written consent to administrative data matching in Form 10.
  • (4) In cases of investment by a domestic enterprise, the Mayor may propose deliberation on investment subsidies by the Committee, only for enterprises whose feasibility assessment score specified in Appendix 5 (in cases of repatriating enterprises, Appendix 6) is at least 60.
  • (5) The assessment of a foreign investment may take into consideration whether the investment requires advanced technology, the effects of technology transfer, the scale of job creation, etc.
  • (6) Notwithstanding paragraphs (4) and (5), a feasibility assessment may be omitted in the following cases:
    • 1. If a subsidy is provided to a contact center;
    • 2. If Article 14 (2) of the Ordinance is satisfied;
    • 3. If a subsidy is provided under Article 17;
    • 4. If a subsidy is provided as part of a national project.
  • Article 20 (Limitations to Subsidy Applications)
  • An investment enterprise may not apply for a subsidy in any of the following cases:
    • 1. If the enterprise is currently making an upfront investment after receiving an investment subsidy, a local investment promotion subsidy, an investment subsidy for repatriation, etc. and has yet to settle the investment;
    • 2. If the enterprise was subjected to a disposition of recovery for violating relevant regulations, such as the Criminal Act and the Local Government Subsidy Management Act, and seven years have not passed since the date the violation occurred;
    • 3. If, as a result of the upfront investment settlement, either the amount of investment achievement rate or the number of employees achievement rate is less than 70/100 or if the average number of employees achievement rate during the business implementation period is less than 50/100, and five years have not passed since the date of occurrence of the relevant reason;
    • 4. If the enterprise whose debt-to-equity ratio based on its statement of financial position for the immediately preceding business year is at least 500 percent;
    • 5. If the enterprise is in a state of complete capital erosion based on its statement of financial position for the immediately preceding business year;
    • 6. If a decision to grant subsidies was cancelled pursuant to Article 22 (3) or 23 (3) and five years have not passed from the date of cancellation notice.
  • Article 21 (Decision to Grant Subsidies)
  • (1) The Mayor may request the submission of the necessary documentation and explanations for subsidy applications from investment enterprises, and the investment enterprises shall comply with such request.
  • (2) The subsidy shall be subject to the deliberation of the Committee, and the Committee may determine the amount of the subsidy, etc. taking into comprehensive consideration of the suitability of business objectives, the adequacy of the contents of an investment business, the financial capability of the investment enterprise, etc.
  • (3) The Mayor shall notify an investment enterprise of the decision made in accordance with paragraph (2) within 10 days from the date of the decision of the Committee.
  • (4) Even when the Mayor decides to provide a subsidy, he or she may change the details of the decision or cancel the decision if he or she deems it necessary, such as when it is verified that the decision to provide a subsidy was made based on a false application or by other improper means.
  • Article 22 (Payment of Subsidies)
  • (1) Upon receipt of notification of the decision to grant a subsidy, an investment enterprise shall file an application for a disbursement of the subsidy with the Mayor, taking into account the decision of the Committee.
  • (2) An investment enterprise shall offer security within three months from the date of notification of a decision to grant a subsidy, and the Mayor shall disburse the subsidy after verifying the security.
  • (3) The Mayor may require the investment enterprise to offer security more than once if such investment enterprise fails to provide security under paragraph (2), and if it fails to provide security for at least one year from the date of notification of the decision to grant a subsidy, the Mayor may cancel his or her decision to grant a subsidy.
  • (4) The security referred to in paragraph (2) shall be mortgage, provisional registration, certificate of guarantee, etc. provided in the subparagraphs of Article 37 (2) of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party (excluding subparagraphs 2, 6, and 7 of that paragraph).
  • (5) When granting a subsidy, the Mayor shall issue a notice of the decision to grant a subsidy in Form 13 to an investment enterprise with an explanation of the obligations, precautions, etc. that shall be observed.
  • (6) An investment enterprise shall review the details under paragraph (5) and submit to the Mayor an investment letter of commitment in Form 14.
  • (7) Subsidies to enterprises falling under subparagraphs 1 through 6 of Article 4 shall be disbursed in an amount equivalent to 70/100 of the amount of subsidies determined after a report on the commencement of construction and actual commencement of such works (in cases of the knowledge service industry and a contact center through purchase or lease, actual tenancy of the place of investment business) are verified and subsidies in an amount equivalent to 30/100 of the amount of subsidies determined after the settlement is made under Article 24: Provided, That in cases of investment in the knowledge service industry and in a contact center, employment subsidies shall be paid in full after the end of the relevant business implementation period.
  • (8) The Mayor may disburse the subsidy in its entirety to enterprises falling under subparagraph 7 of Article 4 in lump sum within one year after verification of the report on the commencement of construction works and actual commencement, or may disburse the subsidy in up to 10 installments over a period of not more than five years.
  • (9) An investment enterprise shall manage subsidies received in separate accounts.
  • Article 23 (Implementation of Investments)
  • (1) An investment enterprise shall file a report on the commencement of construction works within one year from the date of the notice of a decision to grant a subsidy (in cases of investment in the knowledge service industry and in a contact center through purchase or lease, actual tenancy of the relevant place of investment business) unless there is good cause, and shall implement all guaranteed investments according to the approved business plan by the investment completion date.
  • (2) An investment enterprise (including where an investment in the knowledge service industry and in a contact center involves new construction of a building) shall complete the investment within three years from the date of reporting the commencement of construction, and for investment in the knowledge service industry and in a contact center, within two years from the date of tenancy of the relevant place of investment business: Provided, That where the Committee deems that a long-term investment is required, the extension of the specified period may be granted within a period of six months.
  • (3) The Mayor may cancel his or her decision to grant a subsidy if an investment enterprise fails to implement an investment pursuant to paragraph (1) or (2).
  • (4) An investment enterprise shall obtain prior approval from the Mayor for the following:
    • 1. Extension of the investment period;
    • 2. Changes of the details of major capital investments;
    • 3. Relocation, etc. of the place of investment business;
    • 4. Changes to the types of business in which the investment is to be made;
    • 5. Changes to the ownership of the enterprise, such as mergers or acquisitions of enterprises;
    • 6. Provision of important property as security;
    • 7. Construction or expansion of a building not included in the investment business plan on a site for a place of investment business or at a factory;
    • 8. Changes to classification of enterprises;
    • 9. Other important matters that may have an influence on the outcome of the investment.
  • (5) If it is necessary to change the investment business plan under paragraph (4), an investment enterprise shall request approval of the change not later than three months before the investment completion date, and the Mayor shall notify the relevant enterprise of whether approval has been granted prior to the investment completion date.
  • (6) The Mayor may exclude any periods of time not attributable to the investment enterprise when approving matters pursuant to paragraph (4) 1.
  • Article 24 (Settlement of Subsidies)
  • (1) An investment enterprise shall submit an application for the settlement of subsidies to the Mayor within three months from the investment completion date, and if the investment enterprise so wishes, it may submit such application even before the investment completion date.
  • (2) An investment enterprise shall submit the following documents when applying for the settlement of subsidies:
    • 1. An application for the settlement of subsidies in Form 15, and evidentiary documents;
    • 2. Other documents the Mayor deems necessary.
  • (3) The Mayor shall settle the subsidy in accordance with Appendix 7 within six months from the date of submission of the application for the settlement of subsidies.
  • (4) If an investment enterprise fails to submit an application for the settlement of subsidies despite the expiration of the period under paragraph (1), the Mayor shall request the investment enterprise to submit such application in writing at least once, and shall recover the investment subsidy in accordance with Article 44 of the Ordinance if the enterprise fails to submit such application until at least one year has elapsed since the investment completion date.
  • (5) The Mayor shall notify an investment enterprise of the results of the settlement finalized after the verification of settlement and the feasibility assessment.
  • (6) An investment enterprise shall submit to the Mayor a letter of commitment for business implementation in Form 16 after receiving a notice of the results of the settlement.
  • (7) The Mayor may entrust the following business affairs to an outside specialized institution when settling investment subsidies:
    • 1. Examination of documents regarding the settlement of investment subsidies;
    • 2. On-site investigation of the place of business;
    • 3. Other business affairs the Mayor deems necessary.
  • Article 25 (Business Implementation)
  • (1) An investment enterprise shall implement investment business at the relevant place of business for five years (two years in cases of the knowledge service industry and a contact center) starting from the first day of the month that includes the date on which the application for the settlement of subsidies is submitted in accordance with Article 24 (1).
  • (2) An investment enterprise shall obtain the Mayor's approval for the following matters during the business implementation period:
    • 1. Matters regarding change of the composition of the place of business, such as the removal and change of important property;
    • 2. Matters regarding the relocation, etc. of the place of investment business;
    • 3. Matters regarding changes to the types of business in which the investment is to be made;
    • 4. Matters regarding changes to the ownership of the enterprise, such as mergers or acquisitions of enterprises;
    • 5. Matters regarding the offering of important property as security;
    • 6. New construction or expansion on a site for a place of investment business or at a factory;
    • 7. Matters regarding changes to the classification of enterprises;
    • 8. Other important matters that may have an influence on the results of investment.
  • (3) If any change under paragraph (2) is required, an investment enterprise shall request approval for the change not later than three months before the end of the business implementation period, and the Mayor shall notify the relevant investment enterprise of whether such change has been approved within the period from the date of receipt of such request until before the expiration of the business implementation period.
  • Article 26 (Management of Business Implementation)
  • (1) The Mayor may prepare and maintain a management register of investment enterprises and may manage such register through an electronic system.
  • (2) The Mayor shall annually conduct on-site inspections to assess the business implementation status by investment enterprises.
  • Article 27 (Completion of Subsidized Business)
  • (1) An investment enterprise shall submit a subsidized business completion report in Form 17 within three months from the end of the business implementation period.
  • (2) Upon receipt of the completion report from an investment enterprise pursuant to paragraph (1), the Mayor shall assess the results of implementation under Article 34 and make a final determination as to the completion of business implementation.
  • Article 28 (Recovery of Subsidies)
  • (1) When any ground for canceling or recovering a subsidy, etc. arises under Article 44 of the Ordinance, the Mayor shall calculate the amount, etc. to be recovered in accordance with the standards specified in Appendix 8, and shall issue an order for the return of the amount of the subsidy canceled or recovered and interest accrued thereon.
  • (2) The Mayor need not order the return of interest accrued due to any unavoidable cause under the proviso of Article 31 (2) of the Local Government Subsidy Management Act.
  • (3) The interest rates for the calculation of interest under paragraph (1) shall be the prevailing interest rate for ordinary deposits in accordance with the agreement of Treasury-related business affairs of the City.
  • (4) If an investment enterprise fails to return the subsidy by a specified deadline, the Mayor may collect the subsidy in the same manner as delinquent local taxes are collected.

CHAPTER V THE BUSAN METROPOLITAN CITY WORKING-LEVEL COUNCIL ON THE ATTRACTION OF INVESTMENT

  • Article 29 (Composition and Operation of Busan Metropolitan City Working-Level Council on the Attraction of Investment)
  • (1) The Busan Metropolitan City Working-Level Council on the Attraction of Investment under Article 33 (7) of the Ordinance (hereinafter referred to as the "Working-Level Council") may be composed of and operated by at least five but not more than seven members from among the members of the Committee.
  • (2) The Working-Level Council shall deliberate on the following:
    • 1. Matters regarding large-scale investments subject to prior review;
    • 2. Matters regarding eligibility criteria and selection of enterprises subject to relaxed standards under Article 14 (2) of the Ordinance;
    • 3. Other matters the chairperson of the Committee deems necessary in connection with the operation of subsidies.
  • (3) The chairperson of the Working-Level Council shall be elected by and from among the members thereof.
  • (4) The chairperson of the Working-Level Council may, if necessary, solicit the opinions of relevant experts, relevant public officials, or relevant persons working for the relevant enterprises or request them to submit related data.
  • (5) The Working-Level Council may retain consultants to advise on specialized matters.
  • Article 30 (Obligations of Members of Working-Level Council)
  • No member shall disclose information, etc. or use information acquired in relation to the business affairs of the Working-Level Council for personal gain.

CHAPTER VI SUPPLEMENTARY PROVISIONS

  • Article 31 (Large-Scale Investment)
  • (1) A large-scale investment enterprise under Article 39 of the Ordinance which intends to receive a subsidy shall comply with the following standards:
    • 1. A corporation with headquarters, factories, research institutes, etc. continuously established for at least three consecutive years or a new corporation in which such corporation holds at least 50/100 of the equity;
    • 2. An enterprise relocating to the jurisdiction: Article 6 (2) and subparagraph 1 of Article 9;
    • 3. A newly constructed or expanded enterprise: Article 6 (3), and subparagraphs 2 and 3 of Article 9.
  • (2) If the Mayor deems that an enterprise qualifies as a large-scale investment, subsidies may be provided within the scope prescribed in Appendix 2.
  • Article 32 (Criteria for Enterprises Investing in Green Technology or Green Industries)
  • (1) An enterprise that has invested in green technology or green industries under Article 40 of the Ordinance means any of the following enterprises:
    • 1. An enterprise (including an enterprise with no factory facility newly constructed or expanded) that invests an additional amount of five billion won or more in core technology research and development facilities and capital to convert its facilities into ones for green technology or green industries at the existing place of business within the City area;
    • 2. An enterprise whose sales in the fields of green technology or green industries account for at least 50 percent of its total sales.
  • (2) An enterprise referred to in paragraph (1) shall satisfy all of the following requirements when applying for a subsidy:
    • 1. The conditions under Article 6 (1) 1 shall be satisfied;
    • 2. Regular employees at the existing place of business shall be at least 10 persons;
    • 3. New employees (new regular employees in the case of relocation to the jurisdiction) at a place of investment business shall be at least 10 persons;
    • 4. The amount of investment shall be at least one billion won.
  • (3) An enterprise that intends to invest in green technology or green industries shall comply with the following standards:
    • 1. An enterprise relocating to the jurisdiction: Article 6 (2);
    • 2. A newly constructed or expanded enterprise: Article 6 (3);
    • 3. Terms and conditions for enterprises under Article 8.
  • Article 33 (Subsidization of Green Technology or Green Industries)
  • (1) The Mayor may provide an investment subsidy under Articles 11 through 13 of the Ordinance to an enterprise falling under Article 32.
  • (2) The Mayor may provide the following employment subsidies, etc. to enterprises investing in green technology or green industries:
    • 1. Employment subsidy: Up to one million won per new employee a month for up to six months;
    • 2. Employment subsidy for research and development personnel: Up to two million won per new employee a month for up to one year;
    • 3. Education and training subsidy: Up to 500,000 won per new employee a month for up to six months.
  • (3) In cases falling under Article 32 (1) 1, the Mayor may deem the existing place of business where the investment has occurred to be a place of investment business and provide a subsidy in accordance with an expansion.
  • Article 34 (Request for Implementation)
  • If the Mayor deems that an investment enterprise fails to implement an investment business (investment plan), a request for implementation may be provided to the investment enterprise.
  • Article 35 (Filing of Objections)
  • (1) If an investment enterprise has any objection to a disposition made by the Mayor in relation to a decision to grant an investment subsidy, conditions for granting such subsidy, cancellation of the decision, order to return or a reduction of such subsidy, exclusion from the business of providing the subsidy, restrictions on receiving such subsidy, the imposition of additional monetary sanctions, and others, it may file an objection in writing within 20 days from the date of receipt of the notice or disposition.
  • (2) Upon receipt of an objection under paragraph (1), the Mayor shall hear the opinions of relevant persons; take necessary measures; and notify the enterprise that has filed the objection of such fact.
  • Article 36 (Order in Provision of Subsidies)
  • Subsidy support for investment enterprises shall preferentially consider whether such enterprises are eligible for State funding.
  • Article 37 (Standards for Payment of Monetary Awards for Attracting Investment)
  • (1) A person who intends to obtain a monetary award for attracting investment under Article 49 of the Ordinance shall submit an application for the payment of a monetary award in Form 18 supplemented by evidentiary documents to the Mayor within one year from the date of completion of the investment business: Provided, That where the Mayor is capable of verifying the relevant evidentiary documents, supplemental submission may be omitted.
  • (2) If there are at least two contributors, an application for the payment of a monetary award shall be filed in the name of a contributor with a higher contribution rate, expressly stating the contribution rate of each contributor and shall be signed or sealed by the respective contributors.
  • (3) Standards for the payment of monetary awards shall be as specified in Appendix 9.
  • Article 38 (Recovery of Monetary Awards)
  • Where substantiated that a person has obtained a monetary award by fraud or other improper means, the Mayor shall recover the award.
  • Article 39 (Preferential Treatment in Personnel Affairs)
  • The Mayor may give preferential treatment in personnel affairs, such as special promotion, to public officials under his or her jurisdiction who have contributed to revitalization of the regional economy by attracting enterprises.

ADDENDA

  • Article 1 (Enforcement Date)
  • This Rule shall enter into force on the date of its promulgation.
  • Article 2 (General Transitional Measures)
  • The previous provisions shall apply to attraction, the application for an investment subsidy, the provision and reduction thereof, and other acts performed pursuant to the previous provisions before this Rule enters into force.

ADDENDA

  • Article 1 (Enforcement Date)
  • This Rule shall enter into force on the date of its promulgation.
  • Article 2 (General Transitional Measures)
  • The previous provisions shall apply to attraction, the application for an investment subsidy, the provision and reduction thereof, and other acts performed pursuant to the previous provisions before this Rule enters into force.

ADDENDA

  • Article 1 (Enforcement Date)
  • This Rule shall enter into force on the date of its promulgation.
  • Articles 2 (Applicability)
  • This Rule shall begin to apply to memorandums of understanding and agreements equivalent thereto entered into after March 29, 2023.
  • Article 3 (Transitional Measures)
  • The previous provisions shall apply to attraction, the application for an investment subsidy, the provision and reduction thereof, and other acts performed pursuant to the previous provisions before this Rule enters into force, but the standards under this Rule may apply if the application of this Rule is advantageous to enterprises.
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