Hanam City Breaks Down 'Entry Barriers' at Knowledge Industry Centers... Becoming a National Leader in Business-Friendly Environments

Allowing Specialized Construction and Other Contractors to Operate in Knowledge Industry Centers
Three Major Achievements of 'Regulatory Innovation' Draw Attention

Hanam City in Gyeonggi Province is paving the way for revitalizing the local economy by systematically eliminating key regulations that have hindered the activities of companies in knowledge industry centers. Hanam City is recognized for having led revisions of the Act on the Promotion of Industrial Cluster and Factory Establishment (Industrial Cluster Act) in recent years, thereby lowering entry barriers and improving the business environment. The city’s achievements in regulatory innovation can be examined in three specific areas.

A panoramic view of Hanam City Hall. Provided by Hanam City

Putting an End to the Gray Area Between 'Illegal and Legal'... Allowing Specialized Construction Firms to Move In

Previously, manufacturing companies located in knowledge industry centers faced significant difficulties in business operations, as they were not permitted to establish offices for registering as 'specialized construction firms' even though they were legitimately producing products and needed to install or assemble them on-site.

Under the law at the time, construction and other related businesses were not included among the permissible industries for knowledge industry centers. As a result, companies manufacturing items such as CCTV systems, gas components, and heating or cooling equipment had to lease separate offices outside the center, incurring considerable losses.

Starting in August 2022, Hanam City launched a 'Regulatory Reform Task Force' and repeatedly visited organizations such as the Korea Federation of SMEs, the Office for Government Policy Coordination, and the Ministry of Trade, Industry and Energy, persistently bringing this issue to the forefront of public discussion.

After relentless efforts—including resubmitting its proposal through the Regulatory Reform Newspaper in May 2023—the city finally secured support from the Ministry of Trade, Industry and Energy. On February 29, 2024, the Enforcement Rules of the Industrial Cluster Act were amended to include offices for specialized construction firms, tasked with installing, assembling, and constructing products manufactured at the factory, within the scope of factory ancillary facilities. As a result, over 150 companies in the area at that time were able to shed the label of 'illegal occupancy' and establish a legitimate business foundation.

From Electrical, Telecommunications, to Fire Protection... Regulatory Innovation Expanded to 'Other Construction Businesses'

The drive for regulatory reform in Hanam City did not stop there. Following the changes for specialized construction firms, the city has now succeeded in allowing 'other construction businesses'—including electrical, information and communications, and fire protection facility contractors—to move into knowledge industry centers, marking a new peak for a business-friendly environment.

Since 2025, the city has advocated to the Ministry of Trade, Industry and Energy for expanding the scope of ancillary factory facilities, and has consistently argued through various channels, including meetings with the Anti-Corruption and Civil Rights Commission, that businesses engaged in other construction fields who carry out installation of their own products should be legally recognized on par with specialized construction firms.

Central government agencies agreed with these proposals. After consultations with various organizations, the Enforcement Rules were finally amended as of April 2026, allowing contractors in electrical works (3 fields), information and communication works (16 fields), fire protection facility works (3 fields), and national heritage restoration works (5 fields) to move into knowledge industry centers.

It is expected that about 350 companies currently registered in the area will benefit immediately, and each company that moves into a knowledge industry center could save millions to tens of millions of won annually in rent.

Substantial Expansion of Knowledge and Information-Communication Sectors... Hanam City Set to Become a K-Culture Hub

Hanam City is not only focused on manufacturing, but is also actively working to broaden the range of knowledge-based industries allowed to move into knowledge industry centers in accordance with rapidly changing industrial trends.

In particular, the city is concentrating on expanding into culture and arts sectors such as film, video, and broadcasting production and distribution. There are high expectations for synergy with the upcoming K-Culture Complex (K-Star World), which will feature K-pop concert venues and a video culture complex.

These regulatory improvements are expected to benefit thousands of new companies and, through the resulting agglomeration effects, serve as the driving force for transforming Hanam City from a simple residential area into an economic hub where people can both live and work.

A Hanam City official stated, "True support for businesses comes from listening to voices on the ground and systematically eliminating unreasonable regulations," adding, "We will continue to focus all administrative resources so that companies can fully realize their ambitions in Hanam."

This content was produced with the assistance of AI translation services.