OPERATION GUIDELINES FOR THE CASH GRANT SYSTEM
Public Announcement No. 200839, Feb. 13, 2008
Amended by Public Announcement No. 2008182, Jul. 22, 2008
Public Announcement No. 2009327, Aug. 21, 2009
Public Announcement No. 2010299, May 3, 2010
Public Announcement No. 201225, Jan. 17, 2012
Public Announcement No. 2012163, Mar. 26, 2012
Public Announcement No. 2014304, jun. 27, 2014
Public Announcement No. 2017519, Oct. 30, 2017
Public Announcement No. 2018360, jun. 26, 2018
Public Announcement No. 2019676, Nov. 29, 2019
Public Announcement No. 2020542, Sep. 10, 2020
CHAPTER I GENERAL PROVISIONS
| Article 2 (Scope of Application) |
| (1) | Cash grants to foreign-invested companies shall be governed by these Guidelines, except as otherwise provided in the Act, the Decree, or the Enforcement Rule (hereinafter referred to as the “Rule”; and hereinafter collectively referred to as "statutes and regulations"). |
| (2) | Matters necessary for cash grants to foreign-invested companies except as provided in the statutes and regulations and these Guidelines shall be determined by the Minister of Trade, Industry and Energy, following deliberation by the Foreign Investment Committee (hereinafter referred to as the “Investment Committee”). |
| Article 3 (Definitions of Terms) |
| (1) | The terms used in these Guidelines are defined as follows: |
| 1. | The term "applicant" means a foreigner who intends to receive a cash grant (including a foreign-invested company under Article 2 (1) 4 (d) of the Act); |
| 2. | The term "new investment" means cases where a foreigner establishes a factory facility or a place of business in cases of any business other than the manufacturing business (hereinafter referred to as "factory facility, etc.") or where the existing foreign investor invests in a different type of business in the second unit of the Korean Standard Industrial Classification (Provided, That this shall be disapproved within the financial or insurance business (65-67)); and the replacement of all existing factory facilities, etc. to perform new business through the merger of factory facilities, etc. shall be deemed a new investment: Provided, That this shall not apply to the new establishment of factory facilities, etc. by means of separation, merger, etc. of the existing factory facilities, etc.; |
| 3. | The term "investment for expansion" means the domestic expansion of a factory facility, etc. that shall be physically separated from the domestic factory facilities, etc. and an essential increase in the area of the factory facility, employment, etc.; but this shall not apply to the new establishment of a factory facility, etc. by means of separation, merger, etc. of the existing factory facilities, etc.; |
| 4. | The term "contract period for cash grants (hereinafter referred to as "contract period")" means the sum of the investment period and the period of business operation; |
| 5. | The term "investment period" means the period from the date the contract is concluded to the last day of the year in which the implementation or execution of investment is completed according to an investment expenditure plan; |
| 6. | The term "period of business operation" means the period for the execution or implementation of an investment plan, employment plan, etc., which shall be five years after the investment period. Where the investment plan, employment plan, etc. set in the beginning are not fulfilled, the business shall not be deemed to be in operation; |
| 7. | The term "first-time employment" means employment for which the period of purchasing employment insurance is up to 12 months; |
| (2) | Except as provided in paragraph (1), the terms used in these Guidelines shall be prescribed by the Act. |
| Article 4 (Ratio of Financial Support) |
The financial support for cash grants shall be borne by the State and local governments in the following ratio:
| 1. | Purchase costs of or rents for land: 40:60 for the Seoul Metropolitan Area and 70:30 for the Non-Seoul Metropolitan Area; |
| 2. | Employment subsidies and education and training subsidies: 50:50 (Provided, That the employment subsidies for interns in the field of technology shall be fully provided by the State); |
| 3. | Building costs, purchase costs of capital goods and research equipment and materials, installation costs of infrastructure, and research and development costs: 30:70 for the Seoul Metropolitan Area and 60:40 for the Non-Seoul Metropolitan Area; |
| 4. | Purchase costs of or rents for buildings for research and development facilities: 30:70 for the Seoul Metropolitan Area and 60:40 for the Non-Seoul Metropolitan Area; |
| 5. | In cases of business in the high-tech industry or the research and development field, the ratio of financial support borne by the State under subparagraphs 1 through 4 may be increased by 10 percentage points. |
CHAPTER II APPLICATION FOR CASH GRANTS
| Article 5 (Requirements for and Foreign Investment Subject to Cash Grants) |
| Article 6 (Application for Cash Grants) |
| (1) | An applicant shall submit to the Minister of Trade, Industry and Energy an application for cash grants and the attached documents (hereinafter referred to as “application”) pursuant to Article 20-3 (1) of the Decree. |
| (2) | A project manager shall submit a written opinion regarding cash grants to the applicant. |
| (3) | "Other matters determined by the Minister of Trade, Industry and Energy" in Article 20-3 (1) 5 of the Decree means the following: |
| 1. | Major business performance and the financial standing of the applicant (current status of the parent company and overseas subsidiaries, a business report, etc.); |
| 2. | The total amount of investment and the amount of foreign investment; |
| 3. | A location plan (including the area, size, acquisition method, costs, etc.); |
| 4. | An annual investment plan for the next five years (by fixed asset item, such as land, buildings, and facilities); |
| 5. | An annual plan for raising investment funds and working funds for the next five years (classifying them into insourcing, outsourcing, cash grants, etc.); |
| 6. | A detailed business plan (including the details of the business, products, the details and level of technology, production process, front and back industries, and detailed business relationships with the parent company and subsidiaries); |
| 7. | The current status and prospects of supply and demand in the domestic and overseas markets (including the expected competing companies in the domestic and overseas markets and prospects thereof); |
| 8. | Estimated financial statements for the next five years (including a detailed estimate of the cost elements constituting sales cost and sales, and evidentiary materials); |
| 9. | An annual new employment plan and an all-inclusive table for the next five years (including the number of persons in the field of natural sciences and engineering by academic background, the number of persons by wage level, the average wage level compared to the same type of industry, etc., and classifying into regular and temporary employment, and local residents and foreigners); |
| 10. | Reasons for selecting the Republic of Korea as a country for investment (including merits and demerits compared to alternative target countries); |
| 11. | Effects of contribution to the regional and national economy for the next five years (including production, export and domestic sales, size of direct and indirect employment, tax payment, front and back integrative effects in regard to procurement sources for raw and subsidiary materials and sales contacts, whether to function as the Asian regional headquarters, etc.); |
| 12. | Where the applicant files an application to establish or expand a research facility or has a research and development plan, a research and development plan for the next five years (including education and training expenses, whether to establish an affiliated research institute, the size of research and development personnel by academic background, the size of research and development investment, joint research with domestic companies or research institutes, etc.); |
| 13. | Other necessary matters. |
| (4) | An investment plan shall be prepared according to attached Form 1 and may be submitted based on the fiscal year of the relevant foreign-invested company. |
| (5) | An application filed by an applicant shall be protected as a business secret and shall not be disclosed without his or her consent except as necessary for examination for cash grants. |
| (6) | Where an applicant fails to meet the requirements prescribed in Article 6, the Minister of Trade, Industry and Energy may require the applicant to supplement his or her application or reject such application: Provided, That the expenses incurred in preparing the application shall be borne by the applicant. |
| (1) | An applicant may enter into negotiations on cash grants after submitting an application. However, he or she may have consultation on cash grants even before submitting the application. In such cases, the applicant shall make a written or verbal request for consultation to the Minister of Trade, Industry and Energy. |
| (2) | Upon receiving an application or a request for consultation, the Minister of Trade, Industry and Energy shall immediately designate a public official to be in charge of the consultation or negotiation (hereinafter referred to as “negotiation”) (hereinafter referred to as “person in charge of negotiations") and notify the applicant thereof and shall request the President of the Korea Trade-Investment Promotion Agency to designate a project manager under Article 21-2 (1) of the Decree. |
| (3) | Upon receipt of an application, the Minister of Trade, Industry and Energy shall immediately notify the head of the relevant local government thereof and request the designation of a person in charge of negotiations. |
| (4) | A person in charge of negotiations may inquire in advance opinions of the relevant departments, agencies, etc. to identify the effects, etc. of an applicant's business subject to cash grants on the domestic industry. |
| Article 8 (Evaluation of Application) |
| (1) | The Minister of Trade, Industry and Energy shall evaluate an application according to the evaluation table provided in attached Table 1, as to whether the foreign investment accompanies high technology, the effects of technology transfer, the size of job creation, whether the foreign investment overlaps with any domestic investment, the effects on the regional and national economy, the viability of investment, etc. |
| (2) | The Minister of Trade, Industry and Energy may organize and operate an Evaluation Committee to conduct technical, financial, and industrial evaluations pursuant to paragraph (1). |
| (3) | The Minister of Trade, Industry and Energy may organize and operate a Prior Evaluation Committee based on the evaluation table for re-investment of unappropriated earned surplus as the amount to be recognized as an investment provided in attached Table 1 before a meeting of the Evaluation Committee is held, in order to check the financial standing of an applicant regarding an application for cash grants for foreign investment under Article 2 (1) 4 (d) of the Act. |
| (4) | The Minister of Trade, Industry and Energy shall not disclose to the public the details of the decisions on applications by the Prior Evaluation committee and the Evaluation Committee and any negotiation agenda for cash grants. |
| Article 9 (Organization and Operation of Evaluation Committee) |
| (1) | The Evaluation Committee shall be comprised of at least five but up to 12 members, and the chairperson shall be elected by the Committee. |
| (2) | The Minister of Trade, Industry and Energy shall commission members of the Evaluation Committee from among the following persons: |
| 1. | A person with extensive expertise of and experience in foreign investment; |
| 2. | A person with extensive expertise of and experience in any relevant field, which are required to conduct technical, financial and industrial evaluations for applicant companies. |
| (3) | A person in charge of negotiations of the Ministry of Trade, Industry and Energy shall serve as the secretary of the Evaluation Committee. |
| (4) | Meetings of the Evaluation Committee shall commence with the opening by the chairperson of the Evaluation Committee; and whether to provide cash grants for an applicant company shall be determined by an affirmative vote of 2/3 of the members of the Evaluation Committee, after the chairperson gathers consensus from the evaluation members who conduct technical, financial, and industrial evaluations for such applicant company. |
| (5) | Where necessary, the chairperson of the Evaluation Committee may give the applicant an opportunity to explain to evaluation members about the relevant business eligible for cash grants. |
| (6) | Evaluation members shall not leak to the outside any information learned in the course of conducting evaluations and shall submit an assurance of confidentiality to the Minister of Trade, Industry and Energy. |
| (7) | The Minister of Trade, Industry and Energy may pay allowances and travel expenses within the budget, to evaluation members who participate in the Committee meetings, on-site fact-finding surveys, etc. |
| (8) | The Minister of Trade, Industry and Energy may determine other details regarding the operation of the Evaluation Committee and the limit calculation committee upon approval from the Foreign Investment Committee under Article 27 of the Act. |
| (9) | The Minister of Trade, Industry and Energy shall organize the Prior Evaluation Committee referred to in Article 8 (3) with at least two members who have extensive expertise of and experience in the relevant field for the financial evaluation of an applicant company, and paragraphs (1) through (8) shall apply mutatis mutandis to other matters regarding the Prior Evaluation Committee. |
| Article 10 (Calculation of Limit on Cash Grants) |
| (1) | The limit on cash grants shall be calculated according to the method specified in attached Table 2. |
| (2) | The Minister of Trade, Industry and Energy may organize and operate a cash grant limit calculation committee (hereinafter referred to as "limit calculation committee") in order to calculate the limit on cash grants under paragraph (1), and the chairperson of the committee shall be determined through election among and by members. |
| (3) | The limit calculation committee under paragraph (2) shall be comprised of at least five members who are persons in charge of negotiations of the central ministries and the relevant local governments, the relevant experts, etc. |
| (4) | The Minister of Trade, Industry and Energy shall commission persons with expertise of and experience in foreign direct investment and subsidies, as the relevant experts prescribed in paragraph (3). |
| (5) | Any member who has participated in the calculation of the limit on cash grants shall not leak to the outside any information learned in the course of the calculation and shall submit an assurance of confidentiality to the Minister of Trade, Industry and Energy. |
| (6) | The limit on cash grants shall be calculated by totaling the cash grants provided by the State and local governments (hereinafter referred to as the "Government”). Where the Government provides any rented land to an applicant, the rent reduced or exempted until the expiration of a contract period for cash grants shall be counted in the limit on cash grants pursuant to Article 19 (4) of the Decree. |
| (7) | Where the Government provides any rented land to an applicant, a financial support referred to in Article 14 of the State Financial Support Standards shall not be provided to compensate for the difference between the sale price and the land preparation cost. |
| (8) | Grants according to the standards for providing state financial support to local governments for attracting foreign investment (hereinafter referred to as the “State Financial Support Standards”), subsidies for promoting regional investment, and cash grants shall not be provided in duplicate to an applicant for the same item, and the total amount of support shall not exceed the limit on cash grants prescribed in attached Table 2 regarding the amount of foreign investment to be attracted through the relevant support. |
| Article 11 (Determination of Cash Grants) |
| (1) | The Minister of Trade, Industry and Energy shall prepare a written recommendation for cash grants which includes the following, based on the details of decisions by the Evaluation Committee and the limit calculation committee pursuant to Articles 8 and 10: |
| 1. | Opinions on the necessity for cash grants; |
| 2. | The amount of payment; |
| (2) | The Minister of Trade, Industry and Energy shall present a written recommendation for cash grants to the Investment Committee through consultation with the Minister of Economy and Finance and the head of the relevant local government. |
| (3) | Cash grants shall be determined through deliberation and decision by the Investment Committee and shall be executed after a contract for cash grants is concluded: Provided, That where the amount of cash grants excluding the amount of relocation support is less than one billion won, a contract for cash grants may be concluded through deliberation and decision by a Foreign Investment Working Committee under Article 27 (3) of the Act (hereinafter referred to as “Working Committee”). |
| (4) | An applicant shall assume responsibility for all actions taken by himself or herself before a contract for cash grants is concluded. |
| Article 12 (Conclusion of Contracts) |
| (1) | Where it is determined to provide cash grants under Article 11 or 15, the Minister of Trade, Industry and Energy shall conclude a contract for cash grants with the head of the relevant local government and the applicant, by reflecting the Operational Guidelines for the Cash Grant System and the statutes and regulations related to foreign investment promotion. |
| (2) | The contract shall be interpreted in accordance with the statutes and regulations of the Republic of Korea, and the relevant parties thereto shall be subject to the courts and trial jurisdiction of the Republic of Korea. |
| (3) | Where an investment plan is submitted based on the fiscal year of an applicant pursuant to Article 6 (4), a contract for cash grants may be concluded based thereon, and the period specified in Article 3 (1) 4 or 18 (1) may be adjusted based on the fiscal year. |
| Article 13 (Payment Method for Cash Grants) |
| (1) | The Government may pay cash grants in a lump sum within one year or in up to 10 installments within five years from the date the contract is concluded, and an applicant shall open a separate account and perform accounting for the cash grants received, clearly distinguishing it from his or her own revenue and expenditure. |
| (2) | For installment payments, a contract for cash grants shall specify an investment expenditure plan that includes the details of cash-granted assets, an expenditure schedule of cash grants, and the deadline for the acquisition of fixed assets necessary for the business, such as land, buildings, and machinery and equipment (hereinafter referred to as “investment expenditure plan”), and the time limit for the commencement of business (or production). |
| (3) | Where an applicant is paid cash grants in installments, the applicant shall submit an application which includes the size, purpose, details, etc. of the cash grants for the relevant year; the Government shall pay the grants, within the scope of cash grants agreed upon by the contract for cash grants, in accordance with the following methods, after evaluating the implementation results of the investment expenditure plan, execution results of the cash grants, etc. but may adjust the amount of and timing for payment; and the State may pay its share of the grants in installments via a local government: |
| 1. | Purchase costs of land under Article 20-2 (1) 1 of the Decree (hereinafter referred to as “land purchase costs”) shall be paid after concluding a contract for purchase of the land, by dividing them into intermediate payment or final payment, and the rents under the same subparagraph (hereinafter referred to as “rents”) shall be paid in accordance with the rental contract concluded between the applicant and the proprietor of the rented land or its entrusted manager; |
| 2. | Education and training subsidies and employment subsidies under Article 20-2 (1) 5 of the Decree (hereinafter referred to as “education and training subsidy” and “employment subsidy,” respectively) shall be paid based on the evaluation of implementation results of the employment plan during the investment period; |
| 3. | Building costs, purchase costs of capital goods and research equipment and materials, and installation costs of infrastructure, such as electricity and communications facilities, under Article 20-2 (1) 2 through 4 of the Decree (hereinafter referred to as “building costs,” “purchase costs of facilities and equipment,” and “installation costs of infrastructure,” respectively) shall be paid based on the evaluation of the implementation results of the investment expenditure plan. |
CHAPTER III PRIOR EXAMINATION OF CASH GRANTS
| Article 14 (Negotiation Agenda for Prior Examination of Cash Grants) |
| (1) | Where necessary to proactively attract specific foreign investment expected to have a significant effect on the national economy, the President of the Korea Trade-Investment Promotion Agency may recommend the Minister of Trade, Industry and Energy to first prepare a negotiation agenda for cash grants through prior examination before applying for cash grants (hereinafter referred to as “negotiation agenda”) and to present it to the Investment Committee. |
| (2) | The negotiation agenda under paragraph (1) shall include the following: |
| 1. | Matters concerning the relevant foreign investor (major business performance, financial standing, current status of the parent company and overseas subsidiaries, level of technology, etc.); |
| 2. | Matters concerning the relevant investment business (details of the business, production items, estimated amount of the total investment and estimated amount of foreign investment, expected location of the foreign investment, mid and long-term business prospects including prospects of supply and demand and profitability, current status and prospects of the expected competing companies in the domestic and overseas markets, expected procurement sources for raw and subsidiary materials and sales contacts, etc.); |
| 3. | Matters concerning the economic effects of the relevant investment business (details and level of the relevant technology, expected ripple effects on front and back industries, expected direct and indirect employment effects, expected production, export and domestic sales, etc.); |
| 4. | Grounds for requiring cash grants (including comparison with an alternative target country); |
| 5. | The minimum requirements for providing cash grants (technology to be introduced, the minimum amount of foreign investment, the minimum number of persons employed, etc.) and the minimum amount of cash grants (or the minimum ratio compared to the amount of foreign investment within a fixed scope); |
| 6. | Items that are negotiable in the course of negotiations with a foreign investor (the amount of foreign investment, the number of persons employed, expected location of foreign investment, etc.) and a variable amount of cash grants by item; |
| 7. | The upper limit of the total amount of cash grants (or the maximum ratio compared to the amount of foreign investment within a fixed scope); |
| 8. | The expected use of cash grants and the expected method of payment thereof; |
| 9. | Other matters necessary to deliberate on matters related to cash grants, such as the development of and plans for the attraction of investment, the opinions on evaluation, and the evaluation results by the limit calculation committee. |
| (3) | In preparing a negotiation agenda for cash grants, the President of the Korea Trade-Investment Promotion Agency shall consider the opinions of the relevant experts in evaluating the technological, industrial, and economic effects, etc. and, if necessary, may consult with the relevant government agencies, local governments, etc. |
| (4) | The Minister of Trade, Industry and Energy may have the President of the Korea Trade-Investment Promotion Agency supplement the negotiation agenda for cash grants, if necessary. |
| (5) | The negotiation agenda shall not be disclosed to the public, and persons who participate in the preparation of the negotiation agenda shall not leak to the outside any information learned in the course of the preparation and shall submit an assurance of confidentiality to the Minister of Trade, Industry and Energy. |
| Article 15 (Consultation on Negotiation Agenda and Determination of Cash Grants) |
| (1) | The Investment Committee shall deliberate and decide on the following matters regarding a negotiation agenda: |
| 1. | Whether it approves cash grants to the relevant foreign investor; |
| 2. | The minimum requirements for cash grants and the minimum amount of cash grants (or the minimum ratio compared to the amount of foreign investment within a fixed scope); |
| 3. | Items that are negotiable in the course of negotiations with a foreign investor and a variable amount of cash grants by item; |
| 4. | The limit on the total amount of cash grants (or the maximum ratio compared to the amount of foreign investment within a fixed scope); |
| 5. | Other matters important in the negotiations. |
| (2) | Where the amount of cash grants excluding the amount of relocation support is less than one billion won, the Working Committee may deliberate and decide on a negotiation agenda for cash grants. |
| Article 16 (Procedures for and Time Limit of Negotiations) |
| (1) | Where a negotiation agenda is approved, a person in charge of negotiations under Article 7 shall proceed with negotiations with an applicant within the limit on cash grants. |
| (2) | A person in charge of negotiations shall complete negotiations and ensure that an application for cash grants under Article 6 shall be filed within one year from the date of approval of the negotiation agenda, and shall request the Minister of Trade, Industry and Energy to extend the time limit, if the application is not filed within such period. |
| (3) | Upon receipt of a request made under paragraph (2), the Minister of Trade, Industry and Energy may extend the time limit by up to one year, if the main facts, such as the current status of domestic development and introduction of the relevant technologies and the necessity for attracting investment, are deemed to remain the same. |
| (4) | Where it is difficult to proceed with negotiations for investment attraction within the scope of the negotiation agenda, a person in charge of negotiations shall immediately report the details thereof to the Working Committee. |
| Article 17 (Measures Following Negotiation Results) |
| (1) | Where negotiations have been concluded, a foreign investor shall file an application for cash grants in accordance with the negotiated details. |
| (2) | Article 6 shall apply mutatis mutandis to the application under paragraph (1), but the documents referred to in Article 6 (2) and (3) 7 and 9 among the attached documents shall be excluded. |
| (3) | Where the details of an application for cash grants conform to the negotiation agenda, the Minister of Trade, Industry and Energy shall conclude a contract through consultation with the Minister of Economy and Finance and the head of the relevant local government and shall report the details thereof to the Working Committee. |
CHAPTER IV FOLLOW-UP MANAGEMENT
| Article 18 (Follow-Up Management of Cash Grants) |
| (1) | An applicant shall annually submit to the President of the Korea Trade-Investment Promotion Agency a report on the implementation of the contract for cash grants in attached Form 2 and a performance report on cash grants in attached Form 3, and shall submit to the President of the Korea Trade-Investment Promotion Agency a performance report on cash grants in attached Form 3 within two months after using the cash grants. In addition, where the provision of cash grants is completed, the applicant shall return the remaining balance of the cash grants from the relevant year and the interest accruing thereon to the relevant local government and the Ministry of Trade, Industry and Energy. |
| (2) | The President of the Korea Trade-Investment Promotion Agency shall annually inspect whether an applicant fulfills the obligations specified in the contract for cash grants for foreign investment, such as an investment and expenditure plan, an employment plan, and research and development, during the contract period under Article 3 and shall submit the results thereof to the head of the relevant local government and the Minister of Trade, Industry and Energy. |
| (3) | Cash grants to cover land purchase costs, rents, education and training subsidies, and employment subsidies shall be subject to follow-up management under Article 19 of the State Financial Support Standards: Provided, That paragraph (4) of the same Article shall not apply to interns in the field of natural sciences and engineering. |
| (4) | Where the actual amount of foreign investment is less than the amount of foreign investment (based on US dollars) specified in a contract for cash grants, cash grants to cover building costs, purchase costs of facilities and equipment, and installation costs of infrastructure shall be adjusted by reducing the amount of cash grants in a corresponding ratio. |
| (5) | Where an applicant fails to fulfill the obligation of minimum employment agreed upon by the contract within the investment period and requests the extension of the period of employment implementation instead of returning the cash grants, such period may be extended by up to two years. |
| (6) | Notwithstanding paragraphs (1) through (4), the Government may provide additional cash grants to an applicant who has employed more than the number of persons originally contracted during the contract period for cash grants, following deliberation by the Foreign Investment Committee. |
| (7) | An applicant shall keep and manage the books stating the details of using subsidies and evidentiary documents until the expiration of the contract period and, if requested by the Government, he or she shall submit the books and evidentiary documents without delay. |
| (8) | An applicant who files an application for cash grants pursuant to Article 2 (1) 4 (d) of the Act shall establish a separate account for the amount to be recognized as a foreign investment by re-investing the unappropriated earned surplus, immediately after concluding a contract for cash grants. The Minister of Trade, Industry and Energy and the head of the relevant local government shall consider only the amount deposited in the said account as the amount of foreign investment and shall evaluate whether the applicant has implemented his or her investment and expenditure plan. |
| Article 19 (Responsibilities of Applicant) |
| (1) | An applicant shall directly or indirectly manage the relevant foreign-invested company and faithfully perform the obligations prescribed in the contract for cash grants and the investment and expenditure plan. |
| (2) | In order to ensure the recovery and replacement of all assets (including assets under construction), such as buildings, facilities, and equipment, to a satisfactory level, a damage insurance contract shall be concluded or measures corresponding thereto shall be taken. |
| (3) | Contracts for acquiring cash-granted assets shall be concluded by the means ensuring the efficient use of cash grants, such as open bidding, certified appraisal, or demand of at least two estimates. |
| (4) | In order to use a cash-granted asset for any purpose other than the relevant business or to transfer, exchange, lease, or offer it as security, an applicant shall obtain prior written approval from the Government. |
| (5) | No cash grant shall be misappropriated as dividends, royalty, etc., and the relevant foreign-invested company shall not provide debt guarantee for any purpose other than the relevant business. |
| (6) | An applicant shall provide sufficient information to ensure the review of the implementation of a contract during the contract period and shall submit to the Government an annual report on the settlement of accounts audited by an external auditor: Provided, That such report may be replaced by a report on the settlement of accounts prepared by the company and evidential materials for accounting, where the amount of cash grants may be less than one billion won. With respect to the research and development field, a report on the current status and outcomes of research and development activities shall be submitted each year, in addition to the report on the settlement of accounts. |
| Article 20 (Cancellation or Withdrawal of Contracts, or Reduction or Recovery of Cash Grants) |
| (1) | Where a contract for cash grants is canceled or withdrawn or the amount of cash grants is reduced or recovered, the amount to be returned by an applicant shall be as follows: |
| 1. | The amount shall be the largest among the total amount of cash grants paid where the applicant is no longer able to operate the relevant business within the investment period; an amount calculated by multiplying the amount of cash grants paid by the non-operation rate for the investment period where the applicant fails to operate the relevant business within the investment period; an amount calculated by multiplying the amount of cash grants by the non-execution rate of investment where the applicant fails to fulfill the investment obligations agreed upon by the contract within the investment period; and an amount calculated by multiplying the amount of cash grants by the non-employment rate where the applicant fails to fulfill the obligations of minimum employment agreed upon by the contract within the investment period; |
| 2. | Subparagraph 1 shall apply mutatis mutandis even where the applicant fails to fulfill his or her obligations agreed upon by the contract within the period of business operation; |
| 3. | Where the cash grants have to be fully or partially recovered, interest and incidental expenses subject to additional collection under the contract for cash grants shall be paid. |
| (2) | Where the Minister of Trade, Industry and Energy cancels or withdraws a contract for cash grants, reduces the amount of cash grants, or recovers the paid cash grants, he or she shall undergo the procedures for urging the fulfillment of the contract or vindication procedures for a specified period: Provided, That this shall not apply where the applicant requests the cancellation or withdrawal of the contract for cash grants. |
| Article 21 (Deadline for Re-Examination) |
The deadline for taking measures, such as repealing or amending these Guidelines, by reviewing the changes, etc. in the statutes and regulations or the actual conditions after the issuance of these Guidelines shall be September 10, 2023, in accordance with the Rules on the Issuance and Management of Directives and Established Rules (Presidential Directive No. 248).
ADDENDA <Public Announcement of the Ministry of Knowledge Economy No. 2008-39, Feb. 13, 2008>
o Attached Tables 1 and 2 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDA <Public Announcement of the Ministry of Knowledge Economy No. 2008-182, Jul. 22, 2008>
o Attached Tables 1 and 2 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDUM <Public Announcement of the Ministry of Knowledge Economy No. 2009-327, Aug. 21, 2009>
This Public Announcement shall enter into force on August 24, 2009.
ADDENDUM <Public Announcement of the Ministry of Knowledge Economy No. 2010-299, May 3, 2010>
This Public Announcement shall enter into force on May 3, 2010.
ADDENDA <Public Announcement of the Ministry of Knowledge Economy No. 2012-25, Jan. 17, 2012>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDUM <Public Announcement of the Ministry of Knowledge Economy No. 2012-163, Mar. 26, 2012>
This Public Announcement shall enter into force on April 1, 2012.
ADDENDA <Public Announcement of the Ministry of Trade, Industry and Energy No. 2014-304, Jun. 27, 2014>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDA <Public Announcement of the Ministry of Trade, Industry and Energy No. 2017-519, Oct. 30, 2017>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDA <Public Announcement of the Ministry of Trade, Industry and Energy No. 2018-360, Jun. 26, 2018>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDA <Public Announcement of the Ministry of Trade, Industry and Energy No. 2019-676, Nov. 29, 2019>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date the Investment Committee passes a resolution to adopt the same.
ADDENDA <Public Announcement of the Ministry of Trade, Industry and Energy No. 2020-542, Sep. 10, 2020>
o Attached Tables 1, 2, and 3 shall not be disclosed.
o These Guidelines shall enter into force on the date of their public announcement.