Democratic Party Announces 'Mega Special Zone' Pledge... "Top-Level Exemptions for Key Industries"

Fostering Strategic Industries in Provincial Areas with "Mega Special Zones"


"Mega Special Zone Act" Could Be Proposed as Early as Next Month

On May 13, about 20 days before the June 3 local elections, the Democratic Party of Korea announced a pledge to establish 'mega special zones' as key regional growth hubs to foster and support national strategic industries.

Han Jeong-ae, Policy Chief of the Democratic Party of Korea, unveiled this mega special zone pledge at the National Assembly on the same day. According to the plan, mega special zones will be directly designed by corporations and local governments reflecting on-the-ground demand, while the central government will provide regulatory exemptions, policy packages, and budgetary support.

Han Jeong-ae, the Policy Chief of the Democratic Party of Korea, is announcing a pledge at the National Assembly on the 4th. Photo by Yonhap News

The Democratic Party stated that the mega special zones would implement a so-called 'menu-style regulatory exemption,' allowing companies and local governments to select specific exemptions as needed, as well as a 'demand-responsive regulatory exemption,' which can be introduced through deliberation and approval based on local requirements.

The regulatory exemptions cover four main areas: location and permits, industry and technology, labor and workforce, and settlement and education. This includes a one-stop approval system that integrates environmental, site, transportation, and disaster impact assessments, as well as a negative regulation approach that permits new technologies and market entry in principle, with exceptions prohibited.

Additionally, a focused support system consisting of seven major policy packages—covering finance, financial services, taxation, talent, infrastructure, technology startups, and institutions—will be established. To promote large-scale regional investment in advanced industries, a new 'growth engine special grant' will be introduced, and local and foreign investment subsidies will be preferentially supported.

The Democratic Party announced that it would prioritize attracting investment to the mega special zones through the National Growth Fund and Regional Growth Fund, while also offering the highest level of tax benefits, including exemptions for income tax, corporate tax, acquisition tax, and property tax, by leveraging the opportunity development zone system.

To this end, the Democratic Party plans to enact a so-called 'Special Act on Mega Special Zones.' Han stated, "After the local elections, we will concentrate discussions so that we can submit the bill by late June or July," adding, "The highest level of regulatory exemptions and policy packages will be provided for key strategic industries."

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