Assemblyman Gu Ja-geun Proposes Amendment Bill to the Local Decentralization Act

Assemblyman Gu Ja-geun (Gumi City Gap, People Power Party) announced on April 10 that he had sponsored the amendment bill to the Local Decentralization Act, which establishes the legal basis for the provision of local investment promotion subsidies, including their definition and the composition of the review committee.

Currently, local investment promotion subsidies are utilized as a regional balanced development policy to encourage companies in the Seoul metropolitan area to relocate and expand investment in regional areas. However, as related matters are only stipulated in notifications by the Ministry of Trade, Industry and Energy, there has been a lack of legal stability. In addition, key issues such as payment standards and review procedures are managed through administrative rules rather than law, raising concerns that the government could exercise arbitrary discretion in their operation.

According to data on the "Payment Details of Local Investment Promotion Subsidies" submitted by the Ministry of Trade, Industry and Energy to Assemblyman Gu, the government provided approximately 1 trillion won in promotion subsidies from 2021 to 2025, using national funds. By year, the amounts were 195.8 billion won in 2021, 205.6 billion won in 2022, 205.1 billion won in 2023, 224.4 billion won in 2024, and 171.2 billion won in 2025. While the subsidy amount showed an increasing trend, it decreased by 23.7% in 2025 compared to the previous year.

The number of subsidy payouts has also been steadily declining. There were 70 cases in 2021, 64 cases in 2022, 55 cases in 2023, 54 cases in 2024, and 50 cases in 2025, showing a consistent decrease.

There is criticism that the reduction of subsidies, which should be expanded to promote effective local investment, is inconsistent with the government’s policy direction of regional balanced development.

Koo Ja-Geun, Member of the National Assembly (People Power Party, Gumi City District A) / Photo by Lee Hwan Kim

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This amendment bill clearly defines local investment promotion subsidies in the law and establishes the legal basis for national and local governments to provide financial and administrative support for corporate relocation and new or expanded investments in local areas. It also stipulates the establishment of a Local Investment Promotion Subsidy Review Committee under the Ministry of Trade, Industry and Energy to deliberate on decisions and criteria for granting subsidies.

Additionally, by elevating the legal basis for supporting costs such as land acquisition, facility investment, and employment-related expenses, the amendment is expected to increase the consistency and predictability of the system, which could lead to more active local investment in practice.

Assemblyman Gu stated, "Although local investment promotion subsidies are a key policy tool for driving regional industries and job creation, the lack of legal basis has limited their stability and transparency. By clearly defining the system in law through this amendment, we can create an investment environment that both businesses and local governments can trust, and it is expected to greatly contribute to the continued expansion of local investment and revitalization of the regional economy."

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