CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to strengthen the competitiveness of a local industry and to contribute to the rapid recovery of the local economy by promptly supporting the relevant area and industry in response to the deterioration of the local industry and economic conditions.
The terms used in this Act are defined as follows:
| 1. | The term "main industry" means an industry that accounts for a high proportion of the local economy, which has a significant ripple effect on the local economy and the related industry; |
| 2. | The term "area for preemptively responding to industrial crisis" means an area designated under Article 8, where the local main industry is expected to significantly deteriorate due to unexpected internal and external shocks, or the bankruptcy, restructuring, etc. of enterprises therein; |
| 3. | The term "special area for responding to industrial crisis" means an area designated under Article 10 where local economic conditions have significantly deteriorated due to a downturn in the main industry of the area. |
| Article 3 (Responsibilities of the state and local government) |
Where local economic conditions deteriorate due to a downturn in the local main industry, the State and a local government shall formulate a comprehensive plan and detailed policy and improve the relevant system to ensure the prompt recovery of the relevant local economy and improve the sustainable competitiveness of the local industry.
| Article 4 (Relationship to other statutes) |
Preventive measures against industrial crisis, and special cases concerning support and regulations for areas for responding to industrial crisis and special areas for responding to industrial crisis under this Act shall prevail over special cases concerning support and regulations under other statutes; provided, where more lenient regulations are provided in other statutes than special cases concerning regulations under this Act, such statutes shall apply.
CHAPTER II PROMOTION SYSTEM
| Article 5 (Deliberative Committee on Response to Industrial Crisis) |
| (1) | A Deliberative Committee on Response to Industrial Crisis (hereinafter referred to as the "Committee") shall be established under the Ministry of Trade and Industry to deliberate on matters regarding response to local industrial crisis and the recovery of the local economy. <Amended on Oct. 1, 2025> |
| (2) | Matters necessary for the composition, operation, etc. of the Committee shall be prescribed by Presidential Decree. |
| Article 6 (Fact-finding survey on local industry and establishment and operation of information system) |
| (1) | The Minister of Trade and Industry may conduct a fact-finding survey on local industrial status and changes, and collect and prepare the relevant statistical data in order to formulate policies in response to local industrial crisis and for the recovery of the local economy. <Amended on Oct. 1, 2025> |
| (2) | The Minister of Trade and Industry may establish and operate a comprehensive local industry information system (hereinafter referred to as "information system") to identify and respond to a downturn in a local industry at an early stage and to systematically maintain and manage information, data, etc. required therefor. <Amended on Oct. 1, 2025> |
| (3) | If deemed necessary for fact-finding surveys, the collection and preparation of statistical data, and the establishment and operation of information systems, the Minister of Trade and Industry may request that the heads of the relevant central administrative agencies, the heads of local governments, the heads of related institutions, organizations, etc. submit necessary data. In such cases, the heads, etc. of the relevant central administrative agencies, in receipt of such request, shall comply therewith, unless there is a compelling reason not to do so. <Amended on Oct. 1, 2025> |
| (4) | No person involved in fact-finding surveys, the collection and preparation of statistical data, and the establishment and operation of information systems shall provide or divulge the collected data and information to a third party or use it for any purpose other than the intended purpose. |
| (5) | Other matters necessary for fact-finding surveys, the collection and preparation of statistical data, the establishment and operation of information systems, etc. shall be prescribed by Presidential Decree. |
CHAPTER III DESIGNATION OF SPECIAL AREAS FOR RESPONDING TO INDUSTRIAL CRISIS
| Article 7 (Preventive measures against industrial crisis) |
| (1) | Where industrial activities in a specific area are likely to be undermined due to structural industry changes, deteriorating business management environments, etc., the Minister of Trade and Industry may recommend that the competent Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor, or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor") formulate and implement a prevention plan. <Amended on Oct. 1, 2025> |
| (2) | The Minister of Trade and Industry may provide support necessary for the effective implementation of a prevention plan formulated by a Mayor/Do Governor. <Amended on Oct. 1, 2025> |
| (3) | Other matters necessary for preventive measures against industrial crisis and support therefor shall be prescribed by Presidential Decree. |
| Article 8 (Designation of area for preemptively responding to industrial crisis) |
| (1) | Where the local main industry is expected to significantly deteriorate due to unexpected internal and external shocks, or the bankruptcy, restructuring, etc. of enterprises therein, a Mayor/Do Governor may formulate a plan on areas for preemptively responding to industrial crisis (hereinafter referred to as "plan on preemptively responding areas") and file an application for the designation of an area for preemptively responding to industrial crisis with the Minister of Trade and Industry, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
| (2) | An area subject to application under paragraph (1) shall fall under any of the following subparagraphs. In such cases, the methods for determining whether the area falls under any of the following subparagraphs shall be prescribed by Presidential Decree: |
| 1. | Where any large-scale disaster, illness, or change in international situation has occurred; |
| 2. | Where an enterprise in the local main industry has undergone bankruptcy or restructuring, or its principal place of business has closed or relocated; |
| 3. | Where any other cause that is likely to result in the significant deterioration of the local main industry has occurred. |
| (3) | Upon receipt of an application for the designation of an area for preemptively responding to industrial crisis, the Minister of Trade and Industry may designate the relevant area as an area for preemptively responding to industrial crisis after deliberation by the Committee. <Amended on Oct. 1, 2025> |
| (4) | The Minister of Trade and Industry who intends to designate an area for preemptively responding to industrial crisis under paragraph (3) shall determine whether to grant such designation after comprehensively examining the following matters: <Amended on Oct. 1, 2025> |
| 1. | Whether a preemptive response is urgently required; |
| 2. | Whether active support from the State is required; |
| 3. | Whether a plan on preemptively responding areas is reasonable and implementable; |
| 4. | Other matters prescribed by Presidential Decree to determine the necessity of designating the relevant area as an area for preemptively responding to industrial crisis. |
| (5) | The State and local governments may provide the following support to the main industry of an area for preemptively responding to industrial crisis: |
| 1. | Financial and fiscal support, such as funds and loans; |
| 2. | Support for research and development and for the commercialization of outcomes; |
| 3. | Support for domestic sales and exports, and advisory services on business management, technologies, and accounting; |
| 4. | Support for employment stabilization, such as education and training for employees, and education for the re-employment of the unemployed and retired; |
| 5. | Other support prescribed by Presidential Decree as necessary for preemptively responding to industrial crisis. |
| (6) | Other matters necessary for the period of designation of an area for preemptively responding to industrial crisis, procedures therefor, etc. shall be prescribed by Presidential Decree. |
| Article 9 (Application for designation of special area for responding to industrial crisis) |
| (1) | A Mayor/Do Governor who intends to obtain the designation of all or part of an administrative district under his or her jurisdiction as a special area for responding to industrial crisis shall formulate a plan on special areas for responding to industrial crisis (hereinafter referred to as "plan on areas in industrial crisis"), which contains the following matters, and shall file an application for designation with the Minister of Trade and Industry: <Amended on Oct. 1, 2025> |
| 1. | An area for which an application for the designation of a special area for responding to industrial crisis is filed; |
| 2. | Necessity for the designation of a special area for responding to industrial crisis; |
| 3. | Matters necessary for response to local industrial crisis and the recovery of the local economy; |
| 4. | Plans of the relevant local government for responding to local industrial crisis; |
| 5. | Other matters prescribed by Presidential Decree. |
| (2) | An area subject to application under paragraph (1) shall satisfy all of the following requirements. In such cases, the methods for determining whether the area falls under the following subparagraphs shall be prescribed by Presidential Decree: |
| 1. | High economic dependence on the main industry of the area subject to application; |
| 2. | Significant deterioration in the key industrial indicators of the area subject to application, such as the production trends of the main industry; |
| 3. | The local economy of the area subject to application, which is deemed to be in a significant downturn, such as a sharp increase in the number of business suspensions or closures; |
| 4. | Emergency support required due to the significant deterioration of the local economy. |
| (3) | Notwithstanding paragraph (2), a Mayor/Do Governor may file an application for the designation of a special area for responding to industrial crisis with regard to an area eligible for support under Article 32 of the Framework Act on Employment Policy or an employment disaster area declared under Article 32-2 of that Act. |
| (4) | A Mayor/Do Governor shall publicly announce a plan on areas in industrial crisis formulated under paragraph (1) for at least 20 days before applying for the designation of a special area for responding to industrial crisis under paragraph (1) and hear opinions from residents, enterprises, relevant experts, etc. in the relevant area. |
| (5) | If necessary, the Minister of Trade and Industry may request that the Mayor/Do Governor who has applied for the designation of a special area for responding to industrial crisis under paragraph (1) supplement the plan for areas in industrial crisis or submit the relevant data. <Amended on Oct. 1, 2025> |
| (6) | Other matters necessary for details regarding the formulation and submission of a plan on areas in industrial crisis, the scope of areas subject to application, the methods and procedures for public announcement, etc. shall be prescribed by Presidential Decree. |
| Article 10 (Designation of special area for responding to industrial crisis) |
| (1) | Upon receipt of an application for the designation of a special area for responding to industrial crisis under Article 9, the Minister of Trade and Industry may grant such designation after approving a plan on areas in industrial crisis after consultation with the heads of the relevant central administrative agencies and deliberation by the Committee. <Amended on Oct. 1, 2025> |
| (2) | The Minister of Trade and Industry who intends to designate a special area for responding to industrial crisis under paragraph (3) shall determine whether to grant such designation after comprehensively examining the following matters: <Amended on Oct. 1, 2025> |
| 1. | Whether the economic downturn of the relevant area attributes to a special circumstance other than being affected by the general economic cycle or deteriorating economic conditions nationwide; |
| 2. | Whether active support from the State is required; |
| 3. | Whether a plan on areas in industrial crisis is reasonable and implementable; |
| 4. | Other matters prescribed by Presidential Decree to determine the necessity of designating the relevant area as a special area for responding to industrial crisis. |
| (3) | The Minister of Trade and Industry may conduct an on-site inspection and collect data on the area for which an application for the designation of a special area for responding to industrial crisis has been filed in order to examine whether to grant such designation. <Amended on Oct. 1, 2025> |
| (4) | The Minister of Trade and Industry and the heads of the relevant central administrative agencies shall formulate policies necessary for the recovery of the main industry and local economy of the special area for responding to industrial crisis designated under paragraph (1). <Amended on Oct. 1, 2025> |
| (5) | The period of designation of an area for preemptively responding to industrial crisis shall not exceed 2 years. |
| (6) | The Minister of Trade and Industry may extend the period of designation by up to 2 years by evaluating the degree of industrial and economic recovery, etc. of an area designated as a special area for responding to industrial crisis, as prescribed by Presidential Decree; provided, the total period of designation shall not exceed 5 years. <Amended on Oct. 1, 2025> |
| (7) | The Minister of Trade and Industry may additionally support an area whose period of designation as a special area for responding to industrial crisis expires (including the expiration of the extended period of designation) pursuant to Article 7 to ensure the recovery of the local economy, if deemed necessary. <Amended on Oct. 1, 2025> |
| (8) | A Mayor/Do Governor having jurisdiction over a special area for responding to industrial crisis designated under paragraph (1) shall prepare a report on the current status of the operation of the relevant special area for responding to industrial crisis, the effects, outcomes, etc. of support under this Act (hereinafter referred to as "operational report") and submit it to the Minister of Trade and Industry every 6 months, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
| (9) | Other matters necessary for the procedures for the designation of a special area for responding to industrial crisis, the extension of such designation, support therefor, etc. shall be prescribed by Presidential Decree. |
| Article 11 (Modification of plan on areas in industrial crisis) |
| (1) | The competent Mayor/Do governor of an area designated as a special area for responding to industrial crisis who intends to modify a plan on areas in industrial crisis may request that the Minister of Trade and Industry approve the modification of such plan. <Amended on Oct. 1, 2025> |
| (2) | Upon receipt of a request under paragraph (1), the Minister of Trade and Industry may approve the modification of a plan on areas in industrial crisis by applying Article 10 (1) and (3) mutatis mutandis; provided, any modification to minor matters prescribed by Presidential Decree need not be deliberated by the Committee. <Amended on Oct. 1, 2025> |
| (3) | Other matters necessary for requests for the approval of the modification of a plan on areas in industrial crisis, approval, etc. shall be prescribed by Presidential Decree. |
| Article 12 (Cancellation of designation of special area for responding to industrial crisis) |
| (1) | A Mayor/Do Governor may file an application with the Minister of Trade and Industry for the cancellation of the designation of a special area for responding to industrial crisis under his or her jurisdiction before the expiration of the period of such designation, if necessary, in any of the following cases: <Amended on Oct. 1, 2025> |
| 1. | Where it is deemed that the main industry of the special area for responding to industrial crisis is in full recovery mode; |
| 2. | Where it is deemed that the economy, industrial production, employment, etc. of the special area for responding to industrial crisis is in recovery mode; |
| 3. | Other cases prescribed by Presidential Decree where it is deemed that the purpose of the designation of a special area for responding to industrial crisis has been sufficiently achieved. |
| (2) | Upon receipt of an application for the cancellation of designation under paragraph (1), the Minister of Trade and Industry may cancel the designation of a special area for responding to industrial crisis after consultation with the heads of the relevant central administrative agencies and deliberation by the Committee. <Amended on Oct. 1, 2025> |
| (3) | Where the Minister of Trade and Industry who has reviewed an operational report deems that a special area for responding to industrial crisis falls under any subparagraph of paragraph (1), the Minister may cancel the designation of the relevant special area for responding to industrial crisis even with no application for the cancellation of designation filed by the Mayor/Do Governor. In such cases, the Minister shall hear the opinions of the relevant Mayor/Do Governor and undergo consultation with the heads of the relevant central administrative agencies and deliberation by the Committee. <Amended on Oct. 1, 2025> |
| (4) | Other matters necessary for the cancellation of the designation of a special area for responding to industrial crisis shall be prescribed by Presidential Decree. |
| Article 13 (Emergency support) |
Where the economic situations of an area for which an application for the designation of a special area for responding to industrial crisis is filed under Article 9 are rapidly deteriorating and emergency support is required, the State may raise necessary financial resources even before it is designated as a special area for responding to industrial crisis pursuant to Article 10 and offer support such as business management funds, employment security and restructuring. In such cases, the Minister of Trade and Industry may prepare necessary policies in consultation with the heads of the competent central administrative agencies in charge of such support. <Amended on Oct. 1, 2025>
| Article 14 (Prompt proceeding of procedures) |
If deemed that a downturn in the local main industry results in the significant deterioration of the local economic conditions despite preventive measures under Article 7 and the designation of an area for preemptively responding to industrial crisis under Article 8 (3), the Minister of Trade and Industry shall promptly proceed with the procedures for the designation of a special area for responding to industrial crisis under Article 10 (1). In such cases, where the Mayor/Do Governor has modified and submitted a prevention plan or a plan on preemptively responding areas under Article 7, as prescribed by Presidential Decree, an application for the designation of a special area for responding to industrial crisis shall be deemed filed, following the formulation of a plan on areas in industrial crisis. <Amended on Oct. 1, 2025>
CHAPTER IV SUPPORT FOR SPECIAL AREAS FOR RESPONDING TO INDUSTRIAL CRISIS
| Article 15 (Financial support) |
| (1) | Where enterprises located in special areas for responding to industrial crisis (hereinafter referred to as "enterprises in critical areas") conduct projects prescribed by Presidential Decree, such as investment in facilities, establishment and expansion of factories, business management innovation, conversion of business types, and securing of working funds, the State and local governments may provide financial support within the budget. |
| (2) | The State and local governments may provide loans and subsidies to enterprises in critical areas with the following funds: <Amended on Jun. 9, 2023> |
| 2. | Funds or capital prescribed by Presidential Decree. |
| (3) | The State may require the Korea Credit Guarantee Fund established under the Credit Guarantee Fund Act, the Korea Technology Finance Corporation established under the Korea Technology Finance Corporation Act, and the Credit Guarantee Foundation established under the local Credit Guarantee Foundation Act to establish and operate a guarantee system for enterprises in critical areas in order to facilitate financial support for enterprises in critical areas. |
| (4) | If necessary for promoting investment in a special area for responding to industrial crisis, a local government may preferentially provide employment subsidies, education and training subsidies, etc. to enterprises that invest in a special area for responding to industrial crisis, as prescribed by municipal ordinances. |
| (5) | Other details regarding financial support shall be prescribed by Presidential Decree. |
| Article 16 (Preferential subsidization for infrastructure) |
| (1) | The State and local governments may preferentially subsidize all or some of the expenses incurred in installing infrastructure, such as roads and water supply facilities, in a special area for responding to industrial crisis, as prescribed by Presidential Decree. |
| (2) | The State and local governments may preferentially provide subsidies under paragraph (1) to an industrial complex defined in subparagraph 8 of Article 2 of the Industrial Sites and Development Act in a special area for responding to industrial crisis, even if not included under the subparagraphs of Article 29 (2) of that Act. |
| Article 17 (Support for development of human resources) |
The State and local governments may provide workers, retirees, etc. in a special area for responding to industrial crisis with education, training, re-employment services, etc. to develop professional human resources.
| Article 18 (Support for research and development activities) |
The State and local governments may provide necessary administrative and financial support for enterprises, institutions, organizations, etc. that promote research and development, technology transfer, and commercialization within a special area for responding to industrial crisis.
| Article 19 (Consulting services for local industry) |
| (1) | The State and local governments may designate an institution which provides the following consulting services to improve the business management, technology, finance, accounting, etc. of enterprises in critical areas: |
| 1. | Provision of consulting services befitting the size and business type of each business entity in special areas for responding to industrial crisis; |
| 2. | Connection with means of support, such as loans and subsidies, based on the results of consulting services; |
| 3. | Other matters deemed necessary to enhance the capabilities of enterprises in critical areas. |
| (2) | The State and local governments may subsidize institutions providing consulting services for expenses incurred in conducting the projects under paragraph (1). |
| (3) | Matters necessary for the standards and procedures for the designation of institutions providing consulting services, the management, etc. of such institutions shall be prescribed by Presidential Decree. |
| Article 20 (Connection with and preferential support for support projects) |
The State and local governments may conduct projects prescribed by Presidential Decree, such as the establishment of industrial infrastructure, technology development, development of human resources, business start-up, support for market development, etc. in special areas for responding to industrial crisis, in connection with projects prescribed by Presidential Decree, and may preferentially support such projects.
CHAPTER V SPECIAL CASES CONCERNING SPECIAL AREAS FOR RESPONDING TO INDUSTRIAL CRISIS
| Article 21 (Reduction of or exemption from usage fees or rents for state and public property) |
Where an enterprise newly establishes or expands its business in a special area for responding to industrial crisis, the State and local governments may reduce or exempt usage fees and rents for State or public property, as prescribed by Presidential Decree, notwithstanding the State Property Act, the Public Property and Commodity Management Act, and other statutes or regulations. [The amended provisions of Article 21 (Act No. 18408, Aug. 17, 2021) shall remain effective until February 17, 2027 in accordance with Article 2 of the Addenda of that Act]
| Article 22 (Reduction of and exemption from taxes and charges) |
| (1) | The State and local governments may grant tax reduction or exemption to enterprises in critical areas in response to local industrial crisis and for the recovery of the local economy, as prescribed by tax-related statutes and regulations. |
| (2) | If necessary in response to local industrial crisis and for the recovery of the local economy, the State and local governments may reduce or exempt charges, etc. for enterprises in critical areas, as prescribed by relevant statutes or regulations. |
| Article 23 (Special cases concerning the Industrial Cluster Development and Factory Establishment Act) |
| Article 24 (Increased subsidies from national treasury) |
For projects prescribed by Presidential Decree, which are eligible for subsidies for special areas for responding to industrial crisis, the State may provide the increased national subsidies in accordance with the subsidy rate prescribed by prescribed by Presidential Decree, despite differential subsidy rates under Article 10 of the Subsidy Management Act and subsidy rates under other statutes.
CHAPTER VI SUPPLEMENTARY PROVISIONS
| Article 25 (Evaluation of operation of special areas for responding to industrial crisis) |
| (1) | The Minister of Trade and Industry may evaluate the operation of a special area for responding to industrial crisis on a regular or occasional basis. <Amended on Oct. 1, 2025> |
| (2) | If necessary for the evaluation under paragraph (1), the Minister of Trade and Industry may request that a Mayor/Do Governor having jurisdiction over the relevant area submit the relevant data. In such cases, the Mayor/Do Governor shall comply with such request, unless there is a compelling reason not to do so. <Amended on Oct. 1, 2025> |
| (3) | The Minister of Trade and Industry shall notify a Mayor/Do Governor having jurisdiction over a special area for responding to industrial crisis of the finalized evaluation results after deliberation by the Committee. Upon receipt of such notification, the Mayor/Do Governor shall take improvement measures based on such results, unless there is a compelling reason not to do so. <Amended on Oct. 1, 2025> |
| (4) | Matters necessary for the standards, methods, procedures, etc. for evaluating the operation of special areas for responding to industrial crisis shall be prescribed by Presidential Decree. |
| Article 26 (Sharing of details of support for special areas for responding to industrial crisis) |
| (1) | The head of the relevant central administrative agency shall submit the details of support provided in accordance with the policies under Article 10 (4) to the Minister of Trade and Industry, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
| (2) | The Minister of Trade and Industry may provide a Mayor/Do Governor with the details submitted under paragraph (1), if deemed necessary for preparing an operational report. <Amended on Oct. 1, 2025> |
| Article 27 (Delegation and entrustment of authority or affairs) |
| (1) | Part of the authority of the Minister of Trade and Industry under this Act may be delegated to a Mayor/Do Governor, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
| (2) | Part of the affairs of the Minister of Trade and Industry or a Mayor/Do Governor under this Act may be entrusted to a related institution or organization equipped with professional capabilities and human resources, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
| (3) | The Minister of Trade and Industry or a Mayor/Do Governor may fully or partially subsidize an institution or organization entrusted with affairs under paragraph (2) for the expenses incurred within the budget to ensure that the institution or organization performs the relevant affairs smoothly. <Amended on Oct. 1, 2025> |
CHAPTER VII PENALTY PROVISIONS
| Article 28 (Penalty provisions) |
A person who provides or divulges the collected data or information to a third party or uses such data or information for any purpose other than the intended purpose, in violation of Article 6 (4), shall be punished by imprisonment with labor for not more than 1 year or by a fine not exceeding 10 million won.
| Article 29 (Administrative fine) |
| (1) | A person who receives support under Articles 15 through 19 by fraud or other improper means shall be subject to an administrative fine not exceeding 10 million won. |
| (2) | An administrative fine under paragraph (1) shall be imposed and collected by the Minister of Trade and Industry, as prescribed by Presidential Decree. <Amended on Oct. 1, 2025> |
ADDENDA <Act No. 18408, Aug. 17, 2021>
Article 1 (Enforcement data)
This Act shall enter into force 6 months after the date of its promulgation.
Article 2 (Effective period)
Article 21 shall be effective until 5 years have elapsed from the date this Act enters into force. Article 3 (Transitional measures concerning designation of special area for responding to industrial crisis)
ADDENDA <Act No. 19430, Jun. 9, 2023>
Article 1 (Enforcement data)
This Act shall enter into force 1 month after the date of its promulgation. <Proviso Omitted>
ADDENDA <Act No. 21065, Oct. 1, 2025>
Article 1 (Enforcement data)
| (1) | This Act shall enter into force on the date of its promulgation; provided, among Acts amended pursuant to Article 7 of Addenda, the amendments to any Act, which was promulgated before this Act enters into force but the enforcement date of which has not yet arrived, shall enter into force on ...<omitted>... the enforcement date of the relevant Act. |