North and South Korea have agreed to reopen a joint industrial park following a five-month closure, as the countries look to bolster their respective economies despite their obvious antipathy.

Seoul's unification ministry said that operations at the Kaesong industrial zone in North Korea will resume following a trial run on 16 September. The agreement came after overnight negotiations between the two nations.

"The two sides have effectively reached an understanding on creating administrative measures and safeguards that can transform Kaesong into a globally competitive industrial park," a ministry source told South Korea's state-run Yonhap news agency.

The industrial park, located just north of the inter-Korean border, was closed in April amid high political tension.

The North had barred South Korean personnel and production materials from going into the park, after the Communist government accused South Korea of conducting joint military drills with the US against its leadership. Pyongyang also pulled out all 53,000 North Koreans working at the park, effectively stopping all operations there.

Kaesong is the last-remaining major inter-Korean venture and a key source of revenue for North Korea. It is the fruit of a historic summit meeting between the leaders of the two countries in June 2000, which resulted in a period of reduced tension between the two Koreas.

Owners of South Korean businesses within the zone have been calling for an agreement to reopen the park. On 14 August the two nations reached a five-point agreement to open the complex, but the reopening date was not decided.

Tax Exemption for Rest of 2013

The Kaesong industrial complex is home to 123 South Korean factories and employs more than half a million North Koreans.

As per the agreement, South Korean firms will not have to pay taxes for the rest of 2013 and will be exempted from any unpaid taxes in 2012.

In addition, the countries will hold talks to resolve the issue of unpaid wages for North Korean labourers who worked for several days in April before the operations came to a standstill.

They also agreed to ease access to the complex by introducing radio-frequency identification devices (RFID) within 2013, and will work together to make it easier for businessmen to move between the countries.

The Unification Ministry also said the countries will host a roadshow in October to attract foreign investors to the industrial park.

"The institutional foundation has now been laid for Kaesong to develop into an internationally competitive and stable industrial complex," the ministry said.