The respected Comrade
"We should foster external economic relations in a multilateral way and accelerate the projects for economic development zones including the Wonsan-Mt. Kumgang international tourist zone."
As part of the work to develop the external economic relations in a diversified way, the DPRK has ensured that provinces establish economic development zones suited to their own characteristics and revitalize their operations.
In order to conduct the development of the zone satisfactorily, the development enterprise should be organized properly.
It is due to the fact that land realignment and infrastructure construction are the very core projects in the development of special economic zones such as economic development zone and the enterprise responsible for these core projects is just the development enterprise.
The development enterprise is the one that takes over the development rights related to the development of the relevant economic development zone from the state and that takes full responsibility for land realignment and infrastructure construction in the area.
In DPRK, the development enterprise can be organized in the form of a stand-alone development enterprise and a joint development enterprise.
First, it can be organized in the form of a stand-alone development enterprise.
A stand-alone development enterprise may be either a domestic stand-alone development enterprise or a foreign one.
The domestic stand-alone development enterprise is an enterprise organized only as an institution and enterprise of the DPRK without the participation of foreign investors.
The DPRK attaches importance to selecting domestic institutions and enterprises as development enterprises in the economic development zone.
It is because it is advantageous in several aspects to organize a domestic stand-alone development enterprise.
With the establishment of a domestic stand-alone enterprise, the development enterprise can make the best use of the favorable natural and geographical conditions in the area and actively conduct the development in the economic development zone in line with the state's long-term development policy while reducing the investment amount for land realignment and infrastructure construction.
And not only can the friction between the development enterprise and the management body of the development zone be reduced, but also a lot of foreign currency can be created through the sale of land use rights or the operation of infrastructure construction projects.
In addition, domestic enterprises can make effective use of infrastructure projects in the zone.
For this reason, the DPRK regulates in Article 11, paragraph 3, of the "Regulation for the Development of the Economic Development Zone of the Democratic People's Republic of Korea" that the institutions and enterprises of the DPRK can also be selected as development enterprises if a certain proportion of the development funds can be covered by its own funds or the deposit set in the bank of the DPRK has been credited.
If a certain portion of development funds can be covered by self-funding, it means that the institution and enterprise can fully provide funds for the development of all or some areas of the relevant economic development zone in their own name. Self-funding includes the registration and borrowed funds of the institution and enterprise as a development enterprise.
Registration funds are those created by institutions and enterprises in their name and registered with relevant institutions; borrowed funds are those borrowed from banks and other third parties to secure funds needed for development by institutions and enterprises.
If a deposit is credited to a bank of Korea, it means that a foreign investor has entered into a contract with an institution or an enterprise of the DPRK with the aim of entrusting the development of the relevant economic development zone to an institution or an enterprise of the DPRK and has credited the deposit promised in the contract to the bank.
In this case, since the legal relations between the parties are the relations between the consignor and the trustee, the development of the economic development zone will take place in the name of institutions or enterprises of the DPRK, not in that of foreign investors.
A foreign stand-alone development enterprise is a development enterprise organized only with foreign investors without the participation of the investor on the DPRK side.
Such development zones include Chongjin Economic Development Zone in North Hamgyong Province, Hyesan Economic Development Zone in Ryanggang Province and Amnokgang Economic Development Zone in North Phyongan Province.
It can also be organized in the form of joint development enterprises.
A joint development enterprise is a joint venture or a joint development enterprise consisting of an investor of the DPRK side and an investor of the foreign side.
A co-development enterprise can be organized when developing economic development zones with relatively large development size or costing high development funds.
These development zones include the Manpho Economic Development Zone in Jagang Province and Sinuiju International Economic Zone in North Phyongan Province, where the development enterprises can be organized in the form of joint venture development enterprise between the investor of the DPRK side and the investor of the foreign side. And the Wiwon industrial development zone of Jagang Province can be organized in the form of joint venture or joint development enterprise by the business of the DPRK side and foreign investors.
The DPRK has made it possible to organize the development enterprise in one of the economic development regions, except some development regions, so that it can take either of two forms without restricting the organization of the development enterprise in one form only. For example, the Chongjin Economic Development Zone of North Hamgyong Province, Hyesan Economic Development Zone of Ryanggang Province, Hyondong Industrial Development Zone of Kangwon Province and most of other development zones have the option of organizing the development enterprise in the form of joint venture development business between the DPRK's business and foreign investors or in the form of foreign independent development business.
The organizational forms of the development enterprise in the economic development zone of the DPRK serve as a rational organizational form for successfully developing the economic development zones and further developing the foreign economic relations.
