How to start a business in North Korea as a foreigner (2026)
Starting a business in North Korea as a foreigner: restricted.
North Korea has a written domestic framework that nominally permits equity joint ventures, contractual joint ventures and wholly foreign-owned enterprises, mainly within designated special economic zones, with state approval. However, UN Security Council Resolution 2375 (2017) prohibits all new and existing joint ventures and cooperative entities with DPRK persons, and major jurisdictions ban new investment outright, so lawful foreign company formation is effectively closed for nearly all foreigners. FDI has collapsed to near-zero and most special economic zones have stalled.
Legal framework
DPRK Foreign Investment Law and related statutes (Equity Joint Venture Law, Contractual Joint Venture Law, Foreign Enterprises Law) administered by state economic bodies, but overridden in practice by UN Security Council sanctions (notably Resolution 2375, 2017) and national sanctions regimes (e.g. US EO 13722).
Key points: starting a business in North Korea
UN ban on joint ventures
UNSC Resolution 2375 (11 Sept 2017) requires member states to prohibit all joint ventures and cooperative entities with DPRK entities or individuals, new or existing, subject only to very narrow exemptions for certain non-commercial infrastructure projects. This makes the standard DPRK investment vehicles unlawful for nationals of UN member states.
Domestic framework on paper
The DPRK Foreign Investment Law and companion laws allow equity joint ventures, contractual joint ventures and wholly foreign-owned subsidiaries via a contract/application submitted to the state external economic body, which must approve or reject within 50 days (joint ventures) or 90 days (wholly foreign-owned enterprises).
National sanctions block investment
US Executive Order 13722 prohibits new investment in North Korea and the export of goods, services and technology to it; virtually all trade, financial transactions and investment by US persons are barred absent an OFAC license. Comparable bans apply in the EU, Canada and other jurisdictions.
Foreign ownership confined to SEZs
Foreign-owned and joint enterprises were historically concentrated in special economic zones such as Rason and Kaesong rather than the wider economy. Outside zones built with South Korea, these SEZs largely failed to attract international capital and development has stalled.
FDI has collapsed
Foreign direct investment is negligible; the country attracted only about US$120 million in FDI in 2013 and inflows have since largely halted under UN sanctions, the closure of the inter-Korean Kaesong zone, and pandemic border closures.
No accessible setup pathway for foreigners
There is no transparent, generally available registration route: formation requires direct state approval and a North Korean counterpart, and any resulting joint venture or cooperative entity is prohibited under UN sanctions, meaning lawful company formation is practically unavailable to ordinary foreign investors.
Sources
- armscontrol.org/factsheets/un-security-council-resolutions-north-korea
- en.wikipedia.org/wiki/United_Nations_Security_Council_Resolution_2375
- asianlii.org/kp/legis/laws/lotdprokofi611/
- investmentpolicy.unctad.org/investment-laws/laws/173/korea-dem-people-s-rep-of-foreign-investment
- ofac.treasury.gov/faqs/456
- ofac.treasury.gov/sanctions-programs-and-country-information/north-korea-sanctions
- ncnk.org/resources/briefing-papers/all-briefing-papers/special-economic-zones-
- en.wikipedia.org/wiki/International_sanctions_against_North_Korea
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