GUIDELINES FOR IMPLEMENTATION OF THE NATIONAL SUBSIDY PROGRAM TO ATTRACT FOREIGN EDUCATIONAL OR RESEARCH INSTITUTIONS
Notice No. 201098, May 11, 2010
Amended by Notice No. 201195, jun. 7, 2011
Notice No. 2012315, Dec. 18, 2012
Notice No. 2013109, Sep. 27, 2013
Notice No. 201492, jun. 12, 2014
Notice No. 2015121, jun. 24, 2015
CHAPTER I GENERAL PROVISIONS
The purpose of these Guidelines is to prescribe matters necessary to implement the ‘national program to subsidize attracting foreign educational or research institutes’ (hereinafter referred to as “subsidy program”)’ to facilitate the activities of local governments to attract foreign educational institutions, schools for foreigners and foreign research institutes (hereinafter referred to as “foreign educational institution or foreign research institute”) to free economic zones pursuant to Articles 16 and 22 of the Special Act on Designation and Management of Free Economic Zones (hereinafter referred to as the “Free Economic Zone Act”).
| (1) | The definitions of terms used in these Guidelines are as follows: |
| 3. | The term “foreign research institute” means any of the following institutes: |
| (a) | “University-affiliated research institute”: A research institute annexed to a foreign educational foundation or its affiliated research institute referred to in subparagraph 1 of Article 2 of the Special Act on Foreign Educational Institutions, newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone and registered under the Civil Act or other related law; |
| (b) | “Nonprofit research institute”: A nonprofit research institute established and operated in a foreign country, newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone and registered under the Civil Act or other related law; |
| (c) | “Foreigner-established research institute”: A collaborative research institute employing a foreigner defined in Article 2 (1) 1 of the Foreign Investment Promotion Act as the chief of a collaborative research team in the capacity of a researcher of a research institute established and operated in a foreign country referred to in (a) or (b) above, newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone and registered under related law; |
| (d) | “Corporate-affiliated research institute”: A research institute annexed to a corporation or its affiliated research institute established and operated in a foreign country, newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone and registered under the Commercial Act or other related law; |
| 3-1. | The term “main campus” of a foreign educational or research institute referred to in subparagraph 1 or 3: A foreign educational foundation, foreign research institute, corporation or its affiliated institute, etc., established and operated in a foreign country under the relevant law, which seeks to establish a foreign educational or research institute in the Republic of Korea; |
| 4. | The term “subsidy program implementer” means the head of a local government who engages in activities to attract foreign educational or research institutes, or who provides subsidies necessary to establish and operate foreign educational or research institutes; |
| 5. | The term “subsidy” means a sum of money granted by the State or a local government to implement a subsidy program, consisting of: |
| (a) | A national subsidy: a sun of money granted by the State; |
| (b) | A local subsidy: a sum of money granted by a local government; |
| 6. | The term “private contribution” means a sum of money contributed by an entity, other than the State and local governments, to implement a subsidy program: Provided, That for an entity established and operated jointly with a domestic institution, a sum of money contributed by the domestic institution shall be excluded from such private contribution; |
| (2) | The requirements for foreign educational or research institutes eligible for subsidies under these Guidelines are as set forth in attached Table 1 or 2. |
| Article 3 (Relationship with Other Acts, etc.) |
| (2) | Except as otherwise expressly provided for in related Acts and subordinate statutes and these Guidelines, matters necessary for implementing subsidy programs may be determined by the Minister of Trade, Industry and Energy (hereinafter referred to as the “Minister”) or upon a resolution by the Free Economic Zone Committee (hereinafter referred to as the “Committee”) established under Article 25 of the Free Economic Zone Act. |
| Article 5 (Eligibility for Subsidies) |
| (1) | Every subsidy program implementer shall request the Minister to evaluate whether a foreign educational or research institute is eligible for subsidies, before entering into an agreement with the head of the entity who seeks to establish a new foreign educational or research institute. |
| (2) | The Minister shall organize an expert advisory committee, comprised of at least three experts in pertinent fields to evaluate the relevant entity’s eligibility for subsidies according to each of the following subparagraphs: |
| 1. | For a foreign educational institution, as to whether it is appropriate to attract such institution in light of the considerations prescribed in attached Table 1, reputation and the excellence of the curriculum thereof, etc.; |
| 2. | For a foreign research institute, as to whether it is appropriate to attract such institute in light of the considerations prescribed in attached Tables 2 and 4, etc. |
| (3) | The Minister shall determine whether the entity requested for evaluation is eligible for subsidies based on the findings of evaluation by the expert advisory committee and notify the subsidy program implementer of his/her determination. |
| (4) | Based on the determination notified under paragraph (3), each subsidy program implementer shall enter into an agreement with the head of the entity who seeks to establish a new foreign educational or research institute, and submit a copy thereof to the Minister. |
| (5) | Where a foreign educational or research institute to be established is recognized by the expert advisory committee as having an exceptional reputation and project plan, down-stream effects, etc., it may be accorded preferential treatment subject to deliberation and resolution by the Committee. |
CHAPTER II ELIGIBILITY FOR, AND AMOUNTS OF, SUBSIDIES
| Article 6 (Subsidy Items) |
| (1) | The items of national subsidies provided for in these Guidelines are as follows: |
| 1. | Establishment-related expenses: Expenses incurred in preparing for establishment, such as feasibility study of attracting higher foreign educational institutions, legal advice and business trips; |
| 2. | Initial operating expenses: Expenses incurred in operating foreign educational or research institutes, such as expenses for the relocation and settlement of the teaching staff and researchers, labor costs and facility expenses; |
| 3. | Construction costs: Costs incurred in building foreign educational institutions and schools for foreigners; |
| 4. | Expenses for supporting the establishment and operation of common educational facilities: Expenses incurred in establishing and operating common educational facilities for foreign educational institutions; |
| 5. | Others: Expenses deemed necessary by the Minister. |
| (2) | No subsidies referred to in paragraph (1) 1 and 2 shall be used to purchase land or purchase or construct buildings. |
| Article 7 (Amounts of Subsidies) |
| (1) | The amount of a national subsidy for each item referred to in Article 6 (1) is as follows: |
| 1. | Establishment-related expenses: No national subsidy referred to in Article 6 (1) 1 shall exceed a local subsidy and six hundred million won per institution; |
| 2. | Initial operating expenses: No national subsidy referred to in Article 6 (1) 2 and 4 shall exceed a local subsidy and such subsidy shall be provided as follows: |
| (a) | No national subsidy for a foreign pre-school, primary or secondary educational institution shall exceed three hundred million won per institution per year; |
| (b) | A national subsidy for a higher foreign educational institution shall be provided at a rate based upon the criteria for subsidization provided for in attached Table 3; |
| (c) | No national subsidy referred to in Article 2 (1) 3 shall exceed one billion won per institution per year; no national subsidy granted to a foreign research institute referred to in Article 2 (1) 3 (b) or (c) shall exceed 1/2 of private contributions; no national subsidy granted to a foreign research institute referred to in Article 2 (1) 3 (d) shall exceed 1/4 of private contributions; |
| (d) | No national subsidy referred to in Article 2 (1) 3 (a) shall exceed one billion won per institution per year, and at least 10% of an annual subsidy shall be secured each year as a private contribution from the university that seeks to establish the relevant research institute; |
| (e) | A national subsidy for common educational facilities shall be determined in consideration of the number, etc. of universities relocated, within one billion won per facility per year; |
| 3. | Construction costs: No subsidies referred to in Article 6 (1) 3 and 4 shall exceed private contributions;, and no national subsidies shall exceed local subsidies. |
| (2) | Where the head of a local government grants a subsidy referred to in Article 6 (1) 2 to a foreign research institute, he/she shall annually adjust subsidies for the next year, reflecting the findings of evaluation by the deliberative organ of the local government and the findings result under paragraph (5) of this Article. |
| (3) | Notwithstanding paragraphs (1) and (2), the Minister may provide subsidies for a foreign educational or research institute determined eligible for preferential treatment under Article 5 (5), within budgetary limits, by up to five times the subsidies determined under Article 7 (1). |
| (4) | Notwithstanding subparagraph 2 of Article 9, the Minister may extend the period for which subsidies are granted to a foreign educational or research institute by up to three years, within budgetary limits, subject to deliberation and resolution by the Committee, based on the findings of performance evaluation conducted under attached Table 4 after expiration of the period of initial subsidization. |
| (5) | Where the Minister grants a subsidy referred to in Article 6 (1) 2 to a foreign research institute, he/she may evaluate the business performance in the preceding year, according to the criteria provided for in attached Table 4, and reflect the findings of such evaluation in determining the subsidies for the following year. |
CHAPTER III FILING APPLICATIONS FOR SUBSIDIES, AND DETERMINATION ON SUBSIDIZATION
| Article 8 (Eligibility for Subsidies) |
To be eligible for national subsidies referred to in Article 6 (1), a foreign educational or research institute shall satisfy all of the following requirements: | 1. | Establishment-related expenses: A foreign higher education institution granted the national subsidy referred to in Article 6 (1) 1 shall apply for approval for establishment with the Minister of Education within one year from the date of the initial payment: Provided, That it may apply for approval for establishment within two years from the date of the initial payment, subject to approval from the Minister, in extenuating circumstances; |
| 2. | Initial operating expenses: |
| (a) | A higher foreign educational institution or foreign research institute granted the national subsidy referred to in Article 6 (1) 2 shall open within one year from the date of the initial payment; |
| (b) | A foreign research institute granted the national subsidy referred to in Article 6 (1) 2 shall employ at least ten research personnel with at least a master’s degree in the relevant fields within one year from the date of the initial payment, and thereafter have at least ten regular research personnel (120 months/person): Provided, That when a foreign educational institute opens in the Republic of Korea, its affiliated research institute shall employ at least five research personnel with at least a master’s degree in the relevant fields within one year, and thereafter have at least five regular research personnel (60 months/person); |
| (c) | A foreign research institute granted the national subsidy referred to in Article 6 (1) 2 shall include in its title, the full name of the foreign educational or research institute, enterprise, etc. (hereinafter referred to as “main campus”) established and operated in the relevant foreign country under Article 2 (1) 3: Provided, That when a foreign research institute referred to in Article 2 (1) 3 (c) cannot use the full name of the foreign research institute, etc. due to extenuating circumstances, such as restrictions imposed by the law of the relevant country, it may omit the full name thereof, subject to deliberation and resolution by the Free Economic Zone Committee. |
| Article 9 (Period of Subsidization) |
Subsidies referred to in Article 6 (1) shall be provided as follows: | 1. | Establishment-related expenses: A subsidy referred to in Article 6 (1) 1 shall be provided by the head of a local government in three installments after a final agreement is entered into, subject to deliberation by the deliberative organ of the local government; |
| 2. | Initial operating expenses: |
| (a) | A subsidy referred to in Article 6 (1) 2 may be provided to a foreign educational institution after it obtains approval for establishment from the Minister of Education, for up to four years from the year the initial payment is made: Provided, That a foreign pre-school, primary or secondary educational institution may be subsidized only when it accrues an operating loss one year after its opening, retroactively for up to three years from the year the initial payment is made; |
| (b) | A subsidy for a foreign research institute referred to in Article 6 (1) 2 may be provided after a final agreement is entered into with the foreign research institute subject to deliberation by the deliberative organ of the relevant local government, for up to five years from the year in which the initial payment is made; |
| (c) | A subsidy referred to in Article 6 (1) 4 may be provided to common educational facilities for up to five years from the year the initial payment is made; |
| (a) | A subsidy referred to in Article 6 (1) 3 may be provided to a foreign educational institution after the foreign educational institution enters into a final agreement with the relevant local government, subject to deliberation by the deliberative organ of the local government; |
| (b) | A subsidy for building a school for foreigners under Article 6 (1) 3 may be provided after the school for foreigners enters into a final agreement with the relevant local government, and the establishment plan is approved by the superintendent of education of the local government. |
| Article 10 (Filing Applications for Subsidies) |
| (1) | Every subsidy program implementer that intends to receive a national subsidy referred to in any of the subparagraphs of Article 6 (1), shall submit the following documents (for an on-going project, the documents referred to in subparagraphs 6, 7, 9 and 9-1 are not required): |
| 1. | An application for national subsidies (Form 1 or 2); |
| 2. | An application for subsidies, a project plan (for a foreign research institute, refer to the criteria for performance evaluation in attached Table 4), and the details of working expenses (including the budget plan in attached Table 6) on the part of a foreign educational or research institute to be subsidized; |
| 4. | A statement of review by the local government and a statement of deliberation by the deliberative organ under paragraph (4); |
| 5. | A copy of an agreement (for an application for a second or subsequent national subsidies, a copy of a agreement entered into under Article 12 (2)) entered into between the subsidy program implementer and the head of the entity who seeks to establish a foreign educational or research institute within the free economic zone; |
| 6. | Documents evidencing that a foreign educational or research institute satisfies the eligibility criteria for attraction provided for in attached Table 1 or 2; |
| 7. | Documents issued by a public institution of the relevant country to prove the existence of the main campus; |
| 8. | A document evidencing that the local subsidy and contributions (if any) are secured; |
| 9. | An agreement on the cooperative relations, contributions, etc. between a foreign research institute and its main campus (for a foreign research institute defined in Article 2 (1) 3 (c), it is subject to the designation of the overseas research institute); |
| 9-1. | A statement of review by the expert advisory committee of the Ministry of Trade, Industry and Energy; |
| 10. | Other matters deemed necessary by the Minister. |
| (2) | Each subsidy program implementer that intends to file the first application for national subsidies referred to in the subparagraphs of Article 6 (1) for a foreign educational institution, shall include the following matters and the opinion of the Minister of Education in a statement of review by the local government and a statement of deliberation by the deliberative organ under paragraph (1) 4: |
| 1. | Excellence of the main campus: |
| (a) | The operating status of the main campus; |
| (b) | The reputation, etc. of the main campus; |
| 2. | A plan for establishing and operating a branch school in the Republic of Korea: |
| (a) | A plan for establishment and operation; |
| (b) | Estimated effects of attracting the relevant institute, such as the level of contribution to regional and national development; |
| (c) | Consistency with the direction-setting for development of the relevant free economic zone; |
| (d) | A plan for securing the school building and site; |
| 3. | Other matters deemed necessary by the Minister or the subsidy program implementer. |
| (3) | Each subsidy program implementer that intends to file the first application for national subsidies referred to in Article 6 (1) 2 for a foreign research institute, shall include the following matters in a statement of review by the local government and a statement of deliberation by the deliberative organ under paragraph (1) 4: |
| 1. | Excellence of the main campus: |
| (a) | The operating status of the main campus; |
| (b) | The reputation of the main campus and level of generic technology held; |
| (c) | The status of networking and cooperation between the main campus and other institutions; |
| 2. | A plan for establishing and operating a foreign research institute: |
| (a) | A plan for establishment and operation; |
| (b) | A plan to use the title for a domestic branch or collaborative research institute |
| (c) | Estimated effects of attracting the relevant institute, such as the level of contribution to regional and national development; |
| (d) | Consistency with the direction-setting for development of the relevant free economic zone; |
| (e) | A mid- to long-term plan for self-sustained growth and development; |
| (f) | A plan for securing research personnel; |
| (g) | A plan for attracting and exchanging research personnel, from and with the main campus; |
| (h) | A plan for networking and cooperation with domestic institutions; |
| (i) | A plan for sharing and disseminating intellectual property rights and other research outcomes; |
| 3. | Other matters deemed necessary by the Minister or the subsidy program implementer. |
| (4) | Every subsidy program implementer shall organize and operate a deliberative organ chaired by the head of the institution to prepare a statement of review under paragraph (1) 4 and to deliberate on and coordinate major matters concerning the subsidy program, including outside experts in the fields of education and research, financial affairs and accounting and other relevant subject matter, where necessary. |
| Article 11 (Determination on Subsidies) |
| (1) | Upon receipt of an application for national subsidies under Article 10 (1), the Minister shall determine the amount of subsidies in consideration of Articles 5 through 9. |
| (2) | If deemed especially necessary for determining national subsidies under paragraph (1), the Minister may directly require the head of the relevant local government or foreign educational or research institute to submit relevant materials or provide explanations, and impose conditions necessary for achieving the objectives of providing such subsidies. |
| (3) | The Minister may fully or partially revoke a determination on subsidies, if a subsidy program implementer uses a subsidy in violation of any of the provisions of related law, is subsidized by making any false statement in an application for subsidies or by other wrongful means, or fails to use the expenditure budget carried over to the following fiscal year under Article 43 of the Special Act on Balanced National Development by the third fiscal year thereafter. |
CHAPTER IV IMPLEMENTATION AND MANAGEMENT OF SUBSIDY PROGRAMS
| Article 11-1 (Responsibilities of Foreign Educational or Research Institutes) |
The head of each foreign educational or research institute shall use subsidies provided by the State and a local government only for the purposes provided for in an agreement with the subsidy program implementer, an agreement entered into under Article 12 (2), etc.
| Article 11-2 (Responsibilities of Subsidy Program Implementers) |
| (1) | Every subsidy program implementer shall conscientiously implement the subsidy program with the due care of a good manager pursuant to Acts and subordinate statutes, a determination to grant national subsidies or the disposition taken by the Minister under Acts and subordinate statutes, and he/she shall not use the national subsidy for any other purpose. |
| (2) | Every subsidy program implementer shall obtain approval from the Minister to change any of the details of the subsidy program or the allocation of expenses to be incurred in the subsidy program due to any change in the circumstance. |
| (3) | Every subsidy program implementer shall appropriate the amount of a local government’s share in the subsidy program to the budget of the pertinent year in preference to other programs. |
| (4) | Every subsidy program implementer may determine matters necessary to operate and manage the subsidy program to the extent not inconsistent with these Guidelines. |
| Article 12 (Implementation of Program) |
| (1) | The Minister may provide a national subsidy in lump sum or in installments depending on the program commencement date, budget, etc. |
| (2) | Every subsidy program implementer shall enter into an agreement with the head of a foreign educational or research institute on the amount, period of use, etc. of subsidies for the pertinent year to provide such subsidies under Article 6 (1). |
| (3) | The head of each foreign educational or research institute may use a subsidy only when a matter incurring expenditure arises within the period of use specified in the agreement entered into under paragraph (2). |
| (4) | The head of each foreign educational or research institute shall keep a book of account, containing the details of use of subsidies, and supporting documents and promptly submit them to the Minister at his/her request. |
| Article 13 (Follow-Up Management) |
| (1) | Every subsidy program implementer shall prepare and keep a ledger of foreign educational or research institutes he/she has subsidized. |
| (2) | Every subsidy program implementer shall inspect and ascertain whether a foreign educational or research institute subsidized under Article 6 (1) implements its establishment plan as originally formulated, within six months from the date of the initial payment, and then report the outcomes to the Minister. |
| (3) | Neither a subsidy program implementer nor the head of a foreign educational or research institute shall use, transfer, exchange, lease, or offer as security, any building, facility, equipment, etc. constructed or purchased with the subsidy, for any purpose inconsistent with the purpose for which such subsidy is provided, without prior-approval of the Minister. |
| (4) | If the head of a foreign educational or research institute subsidized under Article 6 (1) fails to fulfill any of his/her duties stipulated in the agreement on establishment and subsidization, the subsidy program implementer may take measures, such as demanding implementation, a corrective order and recovering the subsidy. |
| (5) | To take any of the measures under paragraph (4), the subsidy program implementer shall report the details of the measures, the recovery plan, etc. to the Minister. |
| (6) | The Minister may require a subsidy program implementer to take measures under paragraph (4), where necessary. |
| Article 14 (Reporting Performance) |
| (1) | Each subsidy program implementer shall submit to the Minister details on subsidies (Form 3) used or modified by a foreign educational or research institute within three months from the expiry date of the period for use of subsidies under Article 12 (2): Provided, That relevant additional materials shall be promptly submitted to the Minister, if requested. |
| (2) | Each subsidy program implementer shall settle accounts based on materials submitted under paragraph (1), within three months from the expiry date of the period for use of subsidies under Article 12 (2) and report the result (Form 4) to the Minister. |
| (3) | Each subsidy program implementer shall review an annual performance report prepared and submitted by each foreign research institute, referring the criteria set forth in attached Table 4 and submit it to the Minister within three months from the expiry date of the period for use of subsidy, along with a statement of review. |
ADDENDUM
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are published in the Official Gazette.
Article 2 (Transitional Provisions)
The previous Guidelines shall apply to national subsidies for foreign educational institutions or foreign research institutes with which an agreement concluded before this Guidelines enter into force.