By Kim Sue-young
Staff Reporter

The government Tuesday abolished a system under which companies here must receive a permit to do business in North Korea.

As a result, companies which have been seeking to operate in the reclusive state would see simplified procedures when they start inter-Korean projects.

The Cabinet approved revisions of the law governing trade and cooperation between South and North Korea.

Under the previous licensing system, a permit for both companies and projects were necessary.

But now, companies have to get approval for their projects only and inter-Korean cooperation programs designated by a presidential decree can proceed without the approval.

If firms get the license in a dishonest way, the government can cancel it.

In a bid to diversify trade between the two Koreas, the revision allows services and intangible things as well as goods to be exchanged.

The government also approved a revision bill to encourage foreign investors to invest in inter-Korean trade.

It says that foreigners who invest $10 million or more can get some incentives such as cash grants.

The legislation on South-North cooperation was introduced in 1990 to support exchanges and cooperation between the two Koreas.

The Ministry of Unification has a committee under itself to coordinate related policies and make a decision on important inter-Korean cooperation issues.

To promote economic, cultural and social exchange projects, a permit from the minister has been required.

If caught violating the law, the person will be sentenced to up to three years imprisonment or fined up to 10 million won ($6,770).

ksy@koreatimes.co.kr