President Lee Jae-myung stated at the inaugural meeting of the Regulatory Rationalization Committee on the 15th that "to push growth potential upward, we must shift to a 'negative regulatory system' — where everything is permitted except what is explicitly prohibited or restricted by law — particularly in advanced industries." As the government overhauls its regulatory reform framework, it has unveiled plans for "Mega Special Zones." The initiative seeks to establish zones in four sectors — robotics, renewable energy, biotechnology, and AI autonomous vehicles — as part of the core "5 Poles, 3 Special Zones" balanced national growth strategy, with concentrated support through seven packages covering fiscal policy, finance, taxation, and talent development. The government also plans to consolidate regulatory sandboxes currently scattered across six ministries into a one-stop support system.
The policy direction of accelerating corporate innovation and revitalizing regional economies through regulatory reform is sound. The problem lies in proper execution. Previous administrations' regulatory relaxation policies announced early in their terms — such as regulatory-free zones and regulatory freedom zones — invariably ended as half measures. They lost momentum as administrations progressed, failing to overcome inter-ministerial silos and resistance from vested interests.
Such trial-and-error must not be repeated. Only by narrowing the gap between expectations and reality can this regulatory reform avoid becoming empty rhetoric. In this regard, a recent survey by the American Chamber of Commerce in Korea (AMCHAM) deserves attention. In an AMCHAM survey of member companies on preferred Asia-Pacific regional headquarters locations, Korea's favorability rating was just 11.8 percent, far behind Singapore (58.8 percent) and Hong Kong (17.6 percent). Notably, 68.8 percent of responding companies rated Korea's regulatory environment as "restrictive" or "very restrictive." AMCHAM stated that "structural constraints such as regulations and labor systems [in Korea] are limiting corporate competitiveness."
Regulatory rationalization must be pursued in line with corporate expectations. Yet the government and ruling party are pushing through legislation that increases burdens on businesses — including Commercial Act revisions, the Yellow Envelope Act, mandatory treasury stock cancellation, and worker status presumption rules. Meanwhile, they remain passive on regulatory reforms demanded by industry, such as easing the 52-hour workweek and revising the Serious Accidents Punishment Act. This is why critics point out that while the government proclaims business-led growth, its actual policies move in the opposite direction. The success or failure of regulatory reform depends not on words, but on the changes businesses actually experience on the ground.