Model contractors are defined as those with more than 15 years of continuous business and no administrative sanctions for the past ten years in violation of the construction industry basic law. (image:andrechinn/flickr)
SEOUL, July 4 (Korea Bizwire) – Beginning in November this year, construction contractors with no record of administrative sanctions will get privileges when they try to get approval for business expansion.
The Ministry of Land, Infrastructure, and Transport said on July 3 that it would pre-announce an “enforcement ordinance and regulation on the construction industry basic law” that includes a provision permitting “model contractors” to expand their business without strict capital requirements.
Model contractors are defined as those with more than 15 years of continuous business and no administrative sanctions for the past ten years in violation of the construction industry basic law. The ministry will reduce the capital requirement by 50 percent when these model companies register for a new business area.
For example, a model contractor whose paid-in capital in one area is 200 million won can register for a business in another area whose capital requirement is 1 billion won by putting up 900 million won (a discount of 100 million won, or 50 percent, in capital requirement).
A Land Ministry official said, “Of the 56,000 contractors, about 10 percent of the firms will benefit from this provision. We hope the measure could give a further boost to model companies to expand their business.”
Written by Sean Chung (schung10@koreabizwire.com)
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