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
Notice No. 2016257, Dec. 30, 2016
Notice No. 2019119, Aug. 6, 2019
Notice No. 2019213, Dec. 31, 2019
CHAPTER I GENERAL PROVISIONS
The purpose of these Guidelines is to prescribe matters necessary to implement 'national subsidy programs to attract foreign educational or research institutions (hereinafter referred to as "subsidy program")' to facilitate the activities of local governments to attract foreign educational institutions, schools for foreigners, and foreign research institutions (hereinafter referred to as "foreign educational or research institution, etc.") in 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").
The definitions of terms used in these Guidelines shall be as follows:
| 1. | The term "foreign educational institution" means any educational institution established and operated in a free economic zone pursuant to the Special Act on Establishment and Management of Foreign Educational Institutions in Free Economic Zones and Jeju Free International City (hereinafter referred to as the "Special Act on Foreign Educational Institutions") and the Enforcement Decree of that Act; |
| 3. | The term "foreign research institution" means any of the following institutions: |
| (a) | "University-affiliated research institution": A research institution annexed to a foreign educational foundation or its affiliated research institution referred to in subparagraph 1 of Article 2 of the Special Act on Foreign Educational Institutions, which is newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone after being registered under the Civil Act or other related statutes or regulations; |
| (b) | "Nonprofit research institution": A nonprofit research institution established and operated in a foreign country, which is newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone after being registered under the Civil Act or other related statutes or regulations; |
| (c) | "Foreigner-established research institution": A collaborative research institution 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 institution established and operated in a foreign country referred to in item (a) or (b), which is newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone after being registered under related statutes or regulations; |
| (d) | "Research institution affiliated with an enterprise": A research institution annexed to an enterprise or its affiliated research institution established and operated in a foreign country, which is newly established or expanded in a free economic zone or relocated from a foreign country to a free economic zone after being registered under the Commercial Act or other related statutes or regulations; |
| 4. | The term "main campus/headquarters" means any foreign educational foundation, foreign research institution, enterprise or its affiliated institution, etc., established and operated in a foreign country under the foreign country's statutes, which intends to establish a foreign educational or research institution in the Republic of Korea; |
| 5. | The term "subsidy program" means any affair or program to provide subsidies to attract a foreign educational or research institution; |
| 6. | The term "subsidy program implementer" means the head of a local government who engages in activities to attract foreign educational or research institutions, etc. or who provides subsidies necessary to establish and operate foreign educational or research institutions, etc., or the head of an institution to whom the relevant affairs are delegated; |
| 7. | The term "subsidy" means any expense borne by the State or a local government to implement a subsidy program, which consists of the following: |
| (a) | A national subsidy: An expense borne by the State; |
| (b) | A local government subsidy: An expense borne by a local government; |
| 8. | The term "private contribution" means any of the following expenses borne by an institution, other than the State and local governments: Provided, That for an institution established and operated jointly with a domestic institution, an expense borne by the domestic institution shall be excluded herefrom: |
| (b) | Contribution in kind [in cases falling under Article 2 (1) 8 (b) or (d) of the Foreign Investment Promotion Act, calculable in monetary terms verified under Article 30 of that Act, Article 39 of the Enforcement Decree of that Act, and Article 24 of the Enforcement Rule of that Act, or in cases of labor costs provided by a foreign research institution's main school or headquarters (affiliated research institution), and the like]. |
| Article 3 (Responsibilities of Foreign Educational or Research Institutions) |
The head of a foreign educational or research institution, etc. shall use subsidies provided by the State and a local government only for the purposes provided for in an agreement with a subsidy program implementer, a contract under Article 13 (2), etc.
| Article 4 (Responsibilities of Subsidy Program Implementers) |
| (1) | A subsidy program implementer shall implement a subsidy program conscientiously as a manager in good faith in accordance with the relevant statutes or regulations, a determination to grant national subsidies, or the disposition made by the Minister of Trade, Industry and Energy (hereinafter referred to as the "Minister") under the relevant statutes or regulations, and he or she shall not use national subsidies for any other purpose. |
| (2) | A 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 circumstances. |
| (3) | A subsidy program implementer shall appropriate the amount of a local government's share in the subsidy program in the budget of the pertinent year in preference to other programs. |
| (4) | A subsidy program implementer may determine matters necessary to operate and manage the subsidy program to the extent not inconsistent with these Guidelines. |
| Article 5 (Relationship to Other Statutes) |
CHAPTER II THOSE ELIGIBLE FOR AND AMOUNTS OF SUBSIDIES
| Article 6 (Those Eligible for Subsidies) |
| (1) | A subsidy program implementer shall request the Minister to conduct an examination and review (in attached Forms 7 and 8) of whether a new foreign educational or research institution, etc. are eligible for subsidies, before entering into an agreement with the head of an institution that intends to establish such foreign educational or research institution, etc. |
| (2) | The Minister shall organize an expert advisory board, comprised of at least five experts in the relevant fields, to conduct an examination in accordance with the following criteria: |
| 1. | For a foreign educational institution, as to whether it is appropriate to attract such institution, in consideration of its reputation, the excellence in the curriculum of its departments, and other matters specified in attached Tables 1 and 5, etc.; |
| 2. | For a foreign research institution, as to whether it is appropriate to attract such institution, in consideration of the criteria specified in attached Tables 2 and 7, etc. |
| (3) | The Minister shall determine whether an institution is eligible for subsidies based on the findings of examination by the expert advisory board and notify the subsidy program implementer of his or her determination. |
| (4) | Depending on the determination notified under paragraph (3), a subsidy program implementer shall enter into an agreement with the head of an institution that intends to establish a foreign educational or research institution, by referring to the details determined in attached Table 9, and submit a copy of the agreement to the Minister: Provided, That for important matters such as a plan to use intellectual property rights, he or she shall hold a consultation with the Minister before entering into an agreement. |
| (5) | Where a foreign educational or research institution to be established is recognized by the expert advisory board as being exceptional in reputation, program plans, down-stream effects, etc., it may be accorded preferential treatment after deliberation and resolution by the Committee. |
| Article 7 (Subsidy Items) |
| (1) | The items of national subsidies provided in these Guidelines shall be as follows: |
| 1. | Establishment-related expenses: Expenses incurred in preparing for establishment, such as a feasibility study of foreign higher educational institutions, legal advice, and business trips; |
| 2. | Initial operating expenses: Expenses incurred in operating foreign educational or research institutions, such as expenses for the relocation and settlement of school employees and researchers, labor costs, and facility costs; |
| 3. | Construction costs: Costs incurred in constructing a single foreign educational institution or school for foreigners; |
| 4. | Expenses to establish and operate joint educational facilities: Expenses incurred in establishing and operating cluster facilities for plural foreign educational institutions; |
| 5. | Others: Expenses deemed necessary by the Minister. |
| (2) | No subsidy referred to in paragraph (1) 1 and 2 shall be used to purchase land or purchase or construct buildings. |
| Article 8 (Amounts of Subsidies) |
| (1) | The amount of a national subsidy for each item referred to in Article 7 (1) shall be as follows: |
| 1. | Establishment-related expenses: No national subsidy referred to in Article 7 (1) 1 shall exceed a local government subsidy and 600 million won per institution; |
| 2. | Initial operating expenses: No national subsidy referred to in Article 7 (1) 2 and 4 shall exceed a local government subsidy, and such subsidy shall be provided as follows: |
| (a) | No national subsidy for a foreign pre-school or primary or secondary educational institution shall exceed 300 million won per institution per year; |
| (b) | A national subsidy for a foreign higher educational institution shall be provided at a rate based on the criteria for subsidization specified in attached Table 3; |
| (c) | No national subsidy for a foreign research institution referred to in subparagraph 3 of Article 2 shall exceed 700 million won per institution per year; no national subsidy granted to a foreign research institution referred to in subparagraph 3 (b) and (c) of Article 2 shall exceed 1/2 of private contributions; and no national subsidy granted to a foreign research institution referred to in subparagraph 3 (d) of Article 2 shall exceed 1/4 of private contributions each year; |
| (d) | No national subsidy referred to in subparagraph 3 (a) of Article 2 shall exceed 700 million won per institution per year, and at least 10 percent of an annual subsidy shall be secured each year as a private contribution from a university that intends to establish the relevant research institution; |
| 3. | Construction costs: No subsidy referred to in Article 7 (1) 3 shall exceed private contributions, and no national subsidy shall exceed local government subsidies; |
| 4. | Expenses to establish and operate joint educational facilities: National subsidies under Article 7 (1) 4 shall be provided as follows: |
| (a) | No national subsidy to establish joint educational facilities shall exceed 1/4 of the total program expenses, and no national subsidy shall exceed local government subsidies; |
| (b) | No national subsidy to operate joint educational facilities shall exceed local government subsidies, and an amount for each facility shall not exceed one billion won each year, in consideration of the number of universities that a facility has and other matters. |
| (2) | Where the head of a local government grants a subsidy referred to in Article 7 (1) 2 to a foreign educational or research institution, he or she shall annually adjust subsidies for the following year, reflecting the findings of evaluation by the deliberative organ of the local government and the findings under paragraph (4). |
| (3) | Notwithstanding paragraphs (1) and (2), the Minister may provide subsidies to a foreign educational or research institution determined eligible for preferential treatment under Article 6 (5), within budgetary limits, by up to five times the subsidies determined under paragraph (1). |
| (4) | Where the Minister grants a subsidy referred to in Article 7 (1) 2 to a foreign educational or research institution, he or she may evaluate the program performance in the preceding year, according to the criteria specified in attached Tables 5 and 7, and reflect the findings of such evaluation in determining the subsidies for the following year in accordance with the criteria specified in attached Tables 3 and 4. |
CHAPTER III FILING APPLICATIONS FOR SUBSIDIES AND DETERMINATION ON SUBSIDIZATION
| Article 9 (Eligibility for Subsidies) |
To be eligible for national subsidies referred to in Article 7 (1), a foreign educational or research institution shall satisfy the following requirements: | 1. | Establishment-related expenses: A foreign higher educational institution granted the national subsidy referred to in Article 7 (1) 1 (b) through (d) shall file an application for approval for establishment with the Minister of Education within one year from the date of the initial receipt: Provided, That it may apply for approval for establishment within two years from the date of the initial receipt, with approval from the Minister, only where any unavoidable reason exists; |
| 2. | Initial operating expenses: |
| (a) | A foreign higher educational institution or foreign research institution granted the national subsidy under Article 7 (1) 2 shall open within one year from the date of the initial payment; |
| (b) | A foreign research institution granted the national subsidy under Article 7 (1) 2 shall employ at least 10 research personnel with a master's degree or higher in the relevant fields within one year from the date of the initial payment, and thereafter have at least 10 regular research personnel (120 months×person): Provided, That where a foreign educational institution opens in the Republic of Korea, its affiliated research institution shall employ at least five research personnel with a master's degree or higher in the relevant fields within one year, and thereafter have at least five regular research personnel (60 months×person); |
| (c) | A foreign research institution granted the national subsidy under Article 7 (1) 2 shall include in its title, the full name of the overseas educational or research institution, enterprise, etc. established and operated in the relevant foreign country under Article 2 (1) 3 (hereinafter referred to as "headquarters"): Provided, That where a foreign research institution referred to in Article 2 (1) 3 (c) cannot use the full name of the foreign research institution, etc. due to any unavoidable reason, such as restrictions imposed by the statutes or regulations of the relevant country, it may omit the full name thereof, after deliberation and resolution by the Committee. |
| Article 10 (Timing and Period for Subsidization) |
| (1) | The timing for providing subsidies under Article 7 (1) shall be as follows: |
| 1. | Establishment-related expenses: A subsidy referred to in Article 7 (1) 1 shall be provided by the head of a local government in three installments after undergoing deliberation by the deliberative organ of the local government and concluding a final agreement; |
| 2. | Initial operating expenses: |
| (a) | A subsidy for a foreign educational institution referred to in Article 7 (1) 2 may be provided to the 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 or primary or secondary educational institution may be subsidized only when it accrues an operating loss one year after its opening and operation, retroactively for up to three years from the year the initial payment is made; |
| (b) | A subsidy for a foreign research institution referred to in Article 7 (1) 2 may be provided to the foreign research institution after undergoing deliberation by the deliberative organ of the relevant local government and concluding a final agreement, for up to seven years from the year the initial payment is made; |
| (a) | A subsidy to construct a foreign educational institution under Article 7 (1) 3 may be provided after undergoing deliberation by the deliberative organ of the relevant local government and concluding a final agreement; |
| (b) | A subsidy to construct a school for foreigners under Article 7 (1) 3 may be provided after it 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; |
| 4. | Subsidies to establish and operate joint educational facilities: |
| (a) | Subsidies to establish joint educational facilities: Subsidies to establish joint educational facilities under Article 7 (1) 4 may be provided after deliberation by the deliberative organ of a local government; |
| (b) | Subsidies to operate joint educational facilities: Subsidies to operate joint educational facilities under Article 7 (1) 4 may be provided for up to five years from the year the initial payment is made. |
| (2) | Notwithstanding paragraph (1) 2, where an application is filed within one year after the expiration of the period for subsidizing foreign educational or research institutions, the Minister may extend the subsidization period by up to three years within budgetary limits after deliberation and resolution by the Committee based on the findings of performance evaluation specified in attached Tables 6 and 8: Provided, That the Minister may determine whether to continue the subsidization period through a mid-term evaluation. |
| Article 11 (Filing Applications for Subsidies) |
| (1) | A subsidy program implementer that intends to receive a national subsidy referred to in the subparagraphs of Article 7 (1) shall submit the following documents: Provided, That for an on-going program, the documents referred to in subparagraphs 6, 7, 9, and 9-2 need not be submitted: |
| 1. | An application for national subsidies in attached Form 1 or 2; |
| 2. | An application for subsidies, a program plan (for a foreign educational institution and a foreign research institution, referring to the criteria for performance evaluation in attached Tables 5 and 7, respectively), and the detailed statement of the program expenses (including a budget plan under attached Table 10) by a foreign educational or research institution, etc. to be subsidized; |
| 4. | A statement of examination by a local government and a statement of deliberation by the deliberative organ under paragraph (4); |
| 5. | A copy of an agreement entered into between the subsidy program implementer and the head of the institution that intends to establish a foreign educational or research institution, etc. within the free economic zone (for an application for the second or subsequent national subsidies, a copy of a contract under Article 13 (2)); |
| 6. | Documents evidencing that a foreign educational or research institution satisfies the eligibility criteria for attraction specified 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/headquarters; |
| 8. | A document evidencing that the local government subsidy and contributions (if any) are secured; |
| 9. | An agreement on the cooperative relations, contributions, etc. between a foreign research institution and its headquarters (for a foreign research institution defined in subparagraph 3 (c) of Article 2, it is subject to the designation of the overseas research institution); |
| 9-2. | A statement of examination by the expert advisory board of the Ministry of Trade, Industry and Energy; |
| 10. | Other matters deemed necessary by the Minister. |
| (2) | A subsidy program implementer that intends to file the first application for national subsidies referred to in the subparagraphs of Article 7 (1) for a foreign educational institution shall include the following matters and the opinion of the Minister of Education in a statement of examination by a 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 an extended campus in the Republic of Korea: |
| (a) | A plan for establishment and operation; |
| (b) | Estimated effects of attracting the relevant institution, such as the level of contribution to regional and national development; |
| (c) | Consistency with the development direction 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) | A subsidy program implementer that intends to file the first application for national subsidies referred to in Article 7 (1) 2 for a foreign research institution shall include the following matters in a statement of examination by a local government and a statement of deliberation by the deliberative organ under paragraph (1) 4: |
| 1. | Excellence of the headquarters: |
| (a) | The operating status of the headquarters; |
| (b) | The reputation of the headquarters and the level of holding source technology; |
| (c) | The status of networking and cooperation between the headquarters and other institutions; |
| 2. | A plan for establishing and operating a foreign research institution: |
| (a) | A plan for establishment and operation; |
| (b) | A plan to use the title for a domestic branch or collaborative research institution; |
| (c) | Estimated effects of attracting the relevant institution, such as the level of contribution to regional and national development; |
| (d) | Consistency with the development direction of the relevant free economic zone; |
| (e) | A plan for self-reliance and mid- to long-term development; |
| (f) | A plan for securing research personnel; |
| (g) | A plan for attracting and exchanging research personnel, from and with the headquarters; |
| (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) | A subsidy program implementer shall organize and operate a deliberative organ he or she chairs to prepare a statement of examination under paragraph (1) 4 and to deliberate on and coordinate major matters concerning the subsidy program, and shall include in such deliberative organ outside experts in the fields of education and research, financial affairs and accounting, and other relevant subject matters, where necessary. |
| Article 12 (Determination on Subsidization) |
| (1) | Upon receipt of an application for national subsidies under Article 11 (1), the Minister shall determine the amount of subsidies in consideration of Articles 6 through 10. |
| (2) | If deemed especially necessary for determining whether to grant national subsidies under paragraph (1), the Minister may directly require the head of the relevant local government or the head of a foreign educational or research institution, etc. to submit necessary materials or provide explanations, and may impose conditions necessary for achieving the objectives of subsidization. |
| (3) | The Minister may fully or partially revoke a determination to grant subsidies, where a subsidy program implementer falls under any of the following: |
| 1. | Where he or she uses subsidies in violation of the relevant statutes or regulations; |
| 2. | Where he or she receives subsidies by a false application or other improper means; |
CHAPTER IV IMPLEMENTATION AND FOLLOW-UP MANAGEMENT OF SUBSIDY PROGRAMS
| Article 12-2 <Moved to Article 3> |
| Article 12-3 <Moved to Article 4> |
| Article 13 (Implementation of Programs) |
| (1) | The Minister may provide a national subsidy in lump sum or in installments depending on the program commencement date, budget, etc. |
| (2) | A subsidy program implementer shall enter into a contract with the head of a foreign educational or research institution, etc. on the amount, period of use, etc. of subsidies in the pertinent year to provide such subsidies under Article 7 (1). |
| (3) | The head of each foreign educational or research institution, etc. may use a subsidy only when a matter incurring expenditure arises within the period of use specified in the contract under paragraph (2). |
| (4) | The head of each foreign educational or research institution, etc. shall have a book of account containing the details of use of subsidies and evidential documents and submit them to the Minister at his or her request without delay. |
| Article 14 (Follow-Up Management) |
| (1) | A subsidy program implementer shall prepare and keep a register of foreign educational or research institutions, etc. granted subsidies. |
| (2) | A subsidy program implementer shall inspect and ascertain whether a foreign educational or research institution, etc. subsidized under Article 7 (1) implements its establishment plan originally submitted, within six months from the date of the initial subsidization, and then report the outcomes to the Minister. |
| (3) | Neither a subsidy program implementer nor the head of a foreign educational or research institution, etc. shall use, transfer, exchange, lease, or offer as security, any building, facility, tools and materials, etc. constructed or purchased with the subsidy, for any purpose inconsistent with the purpose for subsidization, without approval from the Minister. |
| (4) | Where the head of a foreign educational or research institution, etc. subsidized under Article 7 (1) fails to fulfill any of the duties stipulated in the agreement or contract on establishment and subsidization, a subsidy program implementer may take measures, such as demanding implementation, issuing a corrective order, and recovering the subsidy. |
| (5) | To take any of the measures under paragraph (4), a 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 15 (Performance Report) |
| (1) | A subsidy program implementer shall submit to the Minister the details of subsidies used, modifications thereof, etc. by a foreign educational or research institution, etc. as prepared in attached Form 5 within three months from the expiry date of the period for use of subsidies under Article 13 (2): Provided, That additional relevant materials shall be submitted to the Minister without delay, if requested. |
| (2) | A 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 13 (2), and report the result prepared in attached Form 6 to the Minister. |
| (3) | A subsidy program implementer shall receive an annual performance report prepared in accordance with the criteria specified in attached Tables 5 and 7 from each foreign research institution to examine it, and submit the report to the Minister within three months from the expiry date of the period for use of subsidies, along with a statement of examination. |
| Article 16 (Period of Re-Examination) |
The Minister shall examine changes, etc. in the relevant statutes or regulations or the current conditions after this Public Notice is issued, every three years, counting from January 1, 2020, and take measures, such as making improvements, pursuant to the Rules on the Issuance and Management of Directives and Established Rules.
ADDENDUM
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are published in the Official Gazette.
ADDENDUM <Public Notice of the Ministry of Trade, Industry and Energy No. 2015-121, Jun. 24, 2015>
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are published in the Official Gazette.
ADDENDUM <Public Notice of the Ministry of Trade, Industry and Energy No. 2016-257, Dec. 30, 2016>
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are publicly notified.
ADDENDUM <Public Notice of the Ministry of Trade, Industry and Energy No. 2019-119, Aug. 6, 2019>
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are published in the Official Gazette.
ADDENDUM <Public Notice of the Ministry of Trade, Industry and Energy No. 2019-213, Dec. 31, 2019>
Article 1 (Enforcement Date)
These Guidelines shall enter into force on the date they are publicly notified.