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Untitled Document
REGULATION ON THE RESIDENT REPRESENTATIVE OFFICES OF FOREIGN ENTERPRISES IN THE RASON ECONMIC AND TRADE ZONE

Adopted by Decision No. 61 of the Cabinet on October 27, 2000

Article 1. These regulations are formulated to govern the establishment of resident representative offices of foreign enterprises and a proper order in their practice in the Rason economic and trade zone.
Article 2. The opening and operation of a resident representative office of a foreign enterprise (hereinafter called the resident representative office) shall be subject to these regulations.
Article 3. Foreign enterprise (hereinafter called the parent enterprise) can open and operate resident representative offices in the Rason economic and trade zone (hereinafter called the Zone).
Article 4. The term of residence of the representative office shall be up to 3 years and the number of officers shall not exceed 5.
The resident representative office shall consist of a senior representative and other officers.
Administrative and technical staff such as interpreters, typists, bookkeepers and welfare men, and service personnel such as drivers and watchmen cannot be officers that represent the resident representative office.
Citizens of the DPRK can be employed as senior representatives and officers (including service personnel).
Article 5. The resident representative office shall carry out such activities as communication service, consultation and dissemination of economic and technical information that are related to the business of the parent enterprise.
If necessary, it may engage in agent activities by entering into contracts with clients or by making payments and deliveries of goods on behalf of and at the expenses of the parent enterprise within the limit authorized by the parent enterprise.
In such a case the representative office shall submit a letter of authorization signed by the parent enterprise to the Rason City People’s Committee (hereinafter called the Zone Administration) and have it approved.
Article 6. The resident representative office shall not engage in such business activities as importing goods from foreign countries for the purpose of selling in the territory of the DPRK and exporting goods obtained in the territory of the DPRK.
In case any agreement is entered into on resident representative offices between the Government of the DPRK and the government of other country, the representative offices concerned may orient their activities thereby.
Article 7. The resident representative office shall respect and abide by the laws and regulations of the DPRK.
Article 8. The legitimate rights and interests of the resident representative office shall be protected by the law of the DPRK.
Article 9. When a foreign enterprise opens a resident representative office, it shall submit the application related to the establishment of a resident representative office to a central foreign trade guidance organ (or to the Central Bank in case of a foreign financial institution) through the Zone Administration.
The application shall contain the names of both the parent enterprise concerned and its representative office, the name of the senior representative, the number and names of officers, the place of location, the range of their activities and the term of residence, and shall be accompanied by a copy of the certificate of business registration issued by the relevant authorities of the area or country in which the parent enterprise is headquartered, a letter of credit-worthiness issued by the bank in dealership (this being needed only in case the office engages in agent activities related to transaction) and the letters of accreditation and curriculum vitae of the proposed senior representative and officers.
In addition to above-mentioned particulars, the application for the opening of a representative office by a foreign financial institution shall include the financial statement of the recent period, the profit-and-loss account, the memorandum, and the list of the board of directors of the parent enterprise.
Article 10. The central trade guidance organ and the Central Bank (hereinafter called the screening body) shall, in consultation with other bodies concerned, screen and approve or disapprove the application for the establishment of a resident representative office within 30 days from the date of its receipt.
Article 11. The screening body shall deliver the letter of approval to the Zone Administration within 10 days from the date of the approval given.
Article 12. The resident representative offices shall apply to the Zone Administration for registration within 20 days from the date of the receipt of the letter of approval.
The application for registration shall specify the content of the application for establishment and shall be accompanied by the letter of approval.
Article 13. The Zone Administration shall register the representative office and issue a registration certificate of the resident representative office.
In this case, the resident representative office shall pay registration fees to the Zone Administration.
The day when the resident representative office is registered shall be considered as the day of its establishment.
Article 14. Foreign officers and their family members of the resident representative office shall register for residence in accordance with the laws and regulations on residence of foreigners, get relevant identification certificates and strictly abide by the laws and regulations on immigration and residence of foreigners in the Zone.
Article 15. The certificate of registration of the resident representative office shall be valid for 1 year.
Every year the resident representative office shall have its certificate of registration reissued by the Zone Administration 15 days before the expiry of the term.
Article 16. When it wishes to change its name, the place of its location, its activities or the number of representatives, the resident representative office shall submit the application for change to the screening body through the Zone Administration for approval.
In case of replacing senior representative or officers, the letter of accreditation and the curriculum vitae of the persons concerned shall be attached to the application for change.
The resident representative office shall register the contents of change with the Zone Administration within 7 days from the date of approval received for replacing senior representative or officers.
Article 17. Where the post of the senior representative is vacant, one of the officers shall act for him.
In this case, the resident representative office shall send a written notice to the bodies concerned.
Article 18. The resident representative office shall open an account with a foreign exchange bank of the DPRK.
Article 19. Subject to the laws and regulations of the DPRK on tax levied on foreign-invested enterprises and foreigners, the resident representative office and its officers shall make tax registration with the financial institute in the place where it is located and pay tax due.
Article 20. The resident representative office shall submit the annual report on its activities to the screening body through the Zone Administration in January every year.
The annual report shall be prepared in Korean.
Article 21. Where the resident representative office hopes to renew the term of residence, it shall submit the application for renewal to the screening body through the Zone Administration 3 months before the expiry of the term of residence for approval.
The application for renewal shall specify the name of the applicant, desired period of renewal, the reason for it and the like.
Article 22. In case of importing transport means, office materials and daily necessities to be used for the office, the resident representative office shall have them cleared by the customs.
Transport means shall not be used until they are registered with the organs concerned to obtain the driving licence and the plate number and are insured against the third party liabilities.
The transport means, office materials and daily necessities brought in from other countries shall not be sold or used for other purposes.
If owing to unavoidable circumstances, it wishes to sell its transport means, office materials and daily necessities, the resident representative office shall do so only through the designated body after they have been declared to the customs and duties paid.
Article 23. In case of renting a building or employing labour needed for the office, the resident representative office shall enter into a contract with the institution that manages the building or labour exchange agency. Management of the buildings leased and the employees of the resident representative office shall be subject to the laws and regulations on the lease of buildings and labour applicable to foreign-invested enterprises.
Article 24. All communications, internal and external, required for business of the resident representative office shall be provided by the relevant telecommunications body of the DPRK.
If necessary, international telecommunications facilities may be installed with the consent of the body concerned.
Article 25. Where the resident representative office withdraws at the expiry of, or before, the term, it shall send written notices to both the screening body and the Zone Administration and settle all matters related to tax, claims and liabilities 30 days in advance of its withdrawal.
Upon the completion of liquidation, it shall have the registration cancelled by returning the certificate of registration to the Zone Administration within 7 days from the date of liquidation and undergo procedures for cancelling registration.
In such a case, the document issued by the financial institution certifying the payment of tax by the representative office concerned shall also be presented to the Zone Administration.
Article 26. Fees shall be paid to the body concerned when the resident representative office has any certificate issued or reissued or has them altered or cancelled.
Article 27. The screening body and the Zone Administration are authorized to inspect and examine activities of the resident representative office.
In this case, the resident representative office shall comply with the requirements of the inspector and allow him to have access to necessary documents and information.
The parent enterprise shall be responsible for the consequences of the activities conducted by its resident representative office.
Article 28. In case these regulations are contravened, such punishment as fine, confiscation of property or deportation shall be inflicted and if the violation is grave enough, the person concerned shall bear penal responsibility.
Article 29. Any disagreement related to activities of the resident representative office shall be settled through negotiations.
In case negotiations fail, the dispute shall be heard and settled by the court or arbitration body of the DPRK.


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