The US boss of a joint venture run by the Democratic People's Republic of Korea and the Unification Church of the Republic of Korea said on Tuesday he has been granted rare honorary citizenship by Pyongyang.

Park Sang-kwon, CEO of Pyeonghwa Motors, told Seoul-based Yonhap news agency that he received the citizenship in Pyongyang last month. He said the move was a bid to encourage new investment by him.

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

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 is only the second person to be awarded honorary citizenship and the first since Kim Jong-un took over as leader of the DPRK in December 2011, Yonhap said.

The other is 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.

Kim received his honorary citizenship in August 2011 from former leader Kim Jong-il, Yonhap said. Park also confirmed reports that the Unification Church plans to sell its entire stake in the automotive company, as well as a hotel in Pyongyang, to the DPRK.

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, Park said.

"The DPRK people would also be pleased to take it over as it's profitable," he added.

Pyongyang has been seeking to attract foreign investment, and its direct investment comes largely from China.