SEOUL (AFP) - The US boss of a joint venture run by North Korea and the Unification Church of South Korea said on Tuesday he has been granted rare honorary citizenship by Pyongyang, in a bid to encourage new investment by him.

Mr Park Sang Kwon, CEO of Pyeonghwa Motors told South Korea's Yonhap news agency that he received the citizenship in Pyongyang last month.

"This means that North Korea has acknowledged the trust they had put in me. They were also encouraging me to start new projects in the North, more freely and aggressively," Mr Park was quoted as saying.

Mr Park showed an ID that read: "This is to certify that comrade Park Sang Kwon, who has made outstanding contributions to the nation's prosperity, is an honorary citizen of Pyongyang".

He was only the second person to be awardede honorary citizenship and the first since Mr Kim Jong Un took over as the North's leader in December 2011, Yonhap said.

The other is Mr Kim Chin Kyung, a US citizen who is president of Pyongyang University of Science and Technology, which opened in 2010 as an inter-Korean cooperation project.

Mr Kim received his honorary citizenship in August 2011 from then-leader Kim Jong Il, Yonhap said.

Mr Park also confirmed reports that the Unification Church planned to sell its entire stake in the automotive company, as well as a hotel in Pyongyang, to North Korea.

In return, he asked Pyongyang to allow him to start a new business, probably in distribution.

Pyeonghwa Motors, which started production in 2002, has been in the black for the past five years, Mr Park said.

"North Koreans would also be pleased to take it over as it's profitable," he added. Pyeonghwa produces cars and SUVs.

The isolated North has been seeking to attract foreign investment but investors from the West are deterred by its reputation as a rogue nuclear state and its communist leadership.

Direct investment largely comes from its main ally, China.