Disclaimer: The content of the interview is the opinion of the person being interviewed. It does not reflect the opinion of Now Public, the interviewer, nor this blog. Now Public, and this blog are NOT Financial Experts and recommend the use of a financial expert to discuss investments.

During the Noko Jeans news, the underwriter decided to interview Hay, Kalb, and Associates. Hay, Kalb, and Associates are a law firm that has operated in North Korea since 2004. It has been featured in the BBC News website.

An invitation was extended to Michael A. Hay Ph.D who was kind enough to take time from his business activities for this exclusive online interview with the underwriter and Now Public. He also added some more information which will be included.

1. What are the possibilities of investing in North Korea taking into account law firms like Hay, Kalb, and Associates as well as the clothing company Noko Jeans?

There are numerous possibilities for investment in the Democratic People’s Republic of Korea (“North Korea”), far more than those normally reported.  However, just as examples, among them are textiles, agriculture in various forms, transportation of all kinds, civil energy including the important area of energy-saving, leisure and tourism-related services, telecommunications and IT generally also, a massive area of opportunity is mining and minerals (the country is very rich in minerals, precious metals etc.); also, hotel investment is important, and, basically, anything related to infrastructure.  With the continued construction of many apartment buildings, one specific example is for companies that manufacture elevators for hi-rise buildings.  The country has a very active POC (Processing on Commission) industry, and I have seen directly the very high quality and strict quality control by many companies, with a large number of exports.  Noko Jeans is just one example of the unknown possibilities of the quality of work by DPRK workers who are very disciplined, meticulous and skilled.  People are always surprised to learn that the literacy rate in the DPRK, with its compulsory education system, is one of the highest in the world, far exceeding many developed European and other countries.

2. What are the requisites for investing in North Korea?

The prime requisite of course is to find the correct partner or sponsoring entity, which is one of the services we offer.  This does not mean that a foreign company is obliged to enter into a Joint Venture, but it needs to have an official counterpart in the North, supervised by one of the key ministries, with which we maintain close working relations, and have maintained for many years.  The investment laws and regulations are much more extensive and detailed than foreign companies realize, and it is important to note that almost all that are available online are out-of-date versions – it would take too much time here to explain in detail, but it is important to note also that the laws and regulations specifically provide for special incentives and tax-breaks involving advanced industrial skills, services or products possessed by foreign companies.  Therefore there is no substitute for having a company “on the ground”, based in the country, with knowledge of the latest laws, and access to the appropriate government entities, government officials and introduction to the appropriate companies for business opportunities, which is why we set up.  The ministries and personnel are, from my decade of experience, extremely co-operative and fortunately their style of negotiation can often be helpfully frank and straightforward.   There are of course cultural styles as in any country, but our experience, and that of our clients, is that DPRK officials are very welcoming and flexible – and extremely hard-working.

3. What is the purpose of Hay, Kalb, and Associates with regards to helping clients in North Korea?

The key purpose is to assist foreign companies in a variety of ways, at all times with access to the latest investment laws, regulations and guidelines.  It is important to note that the law is just the beginning, as in other countries.  The regulations, guidelines and their application are also important.  Also business consulting, in both helping companies find the correct partner, or otherwise, for example, advising in establishing a representative or other office in the country.  These are just some examples since business consulting covers many different areas of activity.  We also frequently work not directly with companies but with foreign law firms, whose clients are interested in dealing with the North, either investing or otherwise doing business.  We therefore do not substitute ourselves for foreign lawyers, but prefer to work in co-operation with them.  Among our strengths are the linguistic abilities, access to laws and key governmental personnel who can smooth the process at all times.   It is important to note that we are completely independent of the DPRK, and do not represent the DPRK in any way.  More information is available on our website www.haykalb.com.

4. Your offices are in the Pyongyang Hotel. How is the hotel? What does it look like? 

It was the first hotel in the DPRK, and, with five-floors, has several hundred rooms of different sizes.  The service from all personnel is excellent, from the lobby personnel to the reception, store staff, restaurants and management.  Visitors see this the moment they enter the hotel and are met by the doormen, There are numerous facilities for leisure, and relaxation/beauty, and stores and bars are stocked with high-quality foreign goods.  It is perfectly located in a prime area of the city, the central business district, on the main boulevard (the “Champs Elysees” of Pyongyang), next to the main river, and the beautiful Grand People’s Theater, which is directly opposite our offices.  It is very large but with a very personal welcome, which is not always the case in large hotels in the world.  It is now in the process of renovation, which is almost complete, and will render it even more beautiful.  All of these are reasons we chose to move to expanded offices there, and are fortunate to occupy the largest suite in the hotel, with a direct view from our windows of the magnificent Grand People’s Theater.

5. When did Hay, Kalb, and Associates begin operating its firm in North Korea?

It began on August 15, 2004, the Liberation Day of Korea after World War II.  However, my work with the DPRK goes back to 1999.

6. What is your advice for businesses who have read reports about North Korea and are afraid to invest?

They should realize that most good news for foreign investors is not reported by the international press and media.  Also, some news is totally inaccurate.  As one example, it was widely reported just a few weeks ago by well-known, respected worldwide news outlets that it is illegal for North Koreans to possess a computer – this is in a country where IT is one of the most important areas being promoted by the country, and they are very skilled in it, even very young children !  Every single client that has visited the DPRK is amazed at the difference between what is reported and what they see, and the attitude and co-operation of officials.  Another key issue is the fact that the legal environment for foreign investment is very extensive, much more than is reported or generally available to foreigners abroad or who use the internet for research.  In addition, the legal environment is continuously evolving and being improved.

7. Does Hay, Kalb, and Associates have any offices in other cities outside of North Korea?

No.  We keep our base in the country, although we are available for briefings, seminars abroad, whether in-house corporate briefings on business opportunities and how to do business – as well as the mistakes to avoid.  We also attend various international business and legal conferences, whether as attendees or speakers, and are planning our schedule for next year.

8. Hay, Kalb, and Associates works as a Business Consultancy. Please elaborate on what is a Business Consultency. Thank You.

As mentioned above, it is a wide-ranging service, meeting the various needs of companies, whether it is giving advice on market entry, advising on specific business opportunities and partner companies, and also providing highly practical seminars and private in-house briefings for companies who whish to know more.  We like to refer to ourselves as a “one-stop-shop”, since we co-ordinate, with our DPRK partners, all the work involved in the core project, while leaving the company to do its side of the work it wishes to do.  Each client has different needs, and we established ourselves in order to serve these needs.

9. Why does the internet have many laws from North Korea that are outdated? Is it because the search engines rely on old material or there was no time in finding updated information?

That is a very good question. In part, it may be the first reason.  However, the fact is that many sites contain old material, so it is not the fault of the search engines.  Also, access to updated information on the laws requires, largely a physical presence in the North, which is one reason we chose to establish ourselves “on the ground”.  In addition, it is very important to note that the ability to read the laws and regulations in their original language is essential, since translation, as with any country, can sometimes be unclear.

10. Will Hay, Kalb, and Associates support the North Korean Football Team as it participates in the 2010 World Cup?

HK&A supports any activity that promotes positive engagement and greater mutual understanding between the DPRK and other countries.  Also, Koreans are very determined and skilled, which is why their “Arirang” mass gymnastic performance entered the Guinness Book of World records.  Also, the astonishing strength of the women’s national football team in the international sporting field, with some crushing victories, is rarely reported.  Of course, Korea is keen to have another success even greater than its famous 1966 performance in the 1966 World Cup in England, which is the subject of a foreign-made documentary.

Thank you for your time and patience.

It is our pleasure.  We thank you sincerely for this opportunity.

In other news from North Korea which arrived at the desk of Micheal Hay during the interview.

«A new, specialized department store is being constructed in the centre of Pyongyang and is going to open its door in April, 2010. It will sell European products, duty-free ones, and will dealing in many kinds of goods, e.g. light industry goods, food stuff, sports gears, cosmetics, varieties of daily basic necessities, building parts, luxury goods, vehicle accessories/auxiliaries etc..  The store is allowed to import joint venture products but they should be European-involved products.» »

 

 

[[ It comes from senior NK sources in the North who are actively seeking European products» received from Michael Haye