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  • Occupancy in FIZ Through Debt-Equity Swap
    • 담당부서 : 외투기업고충처리실(고상원)
    • 조회수 : 2,559
  • Organization : Chungcheongnam-do investment attraction team
  • Regulation : Foreign Investment Zone Operation Guideline
Grievance
Grievance
•Background: In December of 2012, Company G completed a debt-equity swap that had been examined and put forward since 2010 and has been discussing occupancy in a foreign investment zone in South Chungcheong Province with the provincial government.

•Main Issue: The occupancy of Company G in FIZ is a relocation of plant facilities, which requires the approval of an authorized administrator. South Chungcheong Provincial Government did not make a conclusion regarding the following issues;
① Whether capitalization through debt-equity swap falls under FDI
② Whether relocation of plant facilities can be considered new FDI in the region

Resoultion and Results
Resolution and Results
•Resolution
‣(Jan. 25, 2013) The Ombudsman explained the issues to the Investment Promotion Team of South Chungcheong Provincial Government.

‣The Ombudsman explained that under the revised Commercial Act in 2012, capitalization through debt-equity swap falls under FDI with the consent of the company and can be registered through FDI notification without approval from the Court.

‣The Ombudsman confirmed that the company paid capital from the acquisition of newly issued stock through the abovementioned swap.

Outcome:
•Result: South Chungcheong Provincial Government well understood the explanation and advice of the Ombudsman’s Office, but concluded to make a decision for the occupancy qualification of the company with a final consultation with MOTIE, since it was an unprecedented case. Later, the Ombudsman’s Office received a reply from the Provincial Government saying that the occupancy of the company in FIZ can be considered new investment according to confirmation by MOTIE.