North Korea adds new laws targeted at foreign investors

[KimJongUn]

North Korea adds new laws targeted at foreign investors

Real estate and insurance laws likely aimed at assuring nervous investors, could make living in the DPRK easier - expert

July 23rd, 2015
Leo Byrne

North Korea yesterday announced new real estate and insurance laws targeted at foreign investors, according to an article from the Korean Central News Agency (KCNA).

Although low on detail, the laws will apply to North Korea’s Special Economic Zones (SEZs).

“The rule of real estate consists of seven chapters and 59 articles and the rule of insurance four chapters and 52 articles. The rules deal with possession, registration and employment of real estates, their rent and rate, conclusion of insurance contract, formalities of insurance offices,” the KCNA article reads.

New provisions on real estate could allow for investors to stay in country more easily, according to Jung Eun-lee, professor at the Institute for Social Sciences at Kyungsang University.

“Investors were allowed a space of up to 3.3 square meters for living quarters in DPRK. These real estate dealings were not illegal but rather under the table dealings,” Jung said.

“These real estate regulations the DPRK has put in place now allow these under the table dealings to be official dealings.”

In an effort to attract further investment the DPRK has also placed tax and lease benefits in its SEZs, though many of the zones remain in the planning stages.

Political instability and unclear legislation are just two hurdles standing in the way of investing in North Korea, and are enough to keep many Western investors away. The vast majority of investors likely come from China and, to a much lesser extent, Russia.

“I think these new regulations are targeting the Russians and Chinese businesses as there are not that many countries that are interested in investing in DPRK,” Jung said.

According to a Global Times article published in May, recent reforms enacted by the DPRK aren’t enough to guarantee smooth passage through the DPRK’s tricky investment climate.

“The basic features of North Korean ‘reform’ measures are improving the policy flexibility, introducing new management styles and bringing the function of the market into full play, without changing its fundamental system,” said Cao Shigong, a member of the Korean Peninsula Research Society, Chinese Association of Asia-Pacific Studies.

Additional reporting by Ina Yoon

Featured Image: North Korea Propaganda Post Card by Ray Cunningham on 2013-07-02 20:46:44