Breaking the 'One Site One Permit' Rule and Removing Robot Fences... Regulatory Easing to Trigger 4.2 Trillion KRW Investment

Early Execution of 2.5 Trillion KRW Investment Expected in Yongin Semiconductor Cluster
Paving the Way for a Virtuous Cycle Amid Population Decline and Sluggish Innovation

The government is spearheading regulatory innovation by breaking the "One Site, One Permit" principle and abolishing the mandatory installation of the "1.8-meter safety fence for industrial robots" at production sites. The aim is to unlock five on-hold site projects stalled by permit backlogs and outdated laws, thereby catalyzing a total of 4.2 trillion won in private investment.

The Yongin Semiconductor Cluster, where early investment execution worth 2.5 trillion won is expected due to the allowance of exceptions to the "One Site, One Permit" principle. The Asia Business Daily DB.

On August 13, during a meeting presided over by Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul—including an Emergency Economic Headquarters meeting, an Economic Ministers' Meeting, and a Special Task Force for Living Price Management—the government, in collaboration with related ministries, announced the "First On-Site Company Investment and Innovation Support Plan." The plan was developed under the judgment that Korea's economy is at a "structural turning point," facing challenges such as a shrinking working-age population and a declining trend in capital contribution to growth. The intention is to implement previously delayed private investments, particularly those stuck in on-site pending projects, at an early stage to restore the virtuous cycle of economic growth. This measure reflects feedback from economic organizations, local governments, and on-site visits, with the total associated investment impact estimated at around 4.28 trillion won.

Exceptions to "One Site, One Permit" Principle... Acceleration of 2.5 Trillion Won Investment in Yongin Semiconductor Cluster

The most impactful project involves improving the building permit system for plant expansions within large-scale industrial complexes. Under the current Building Act and the "One Site, One Permit" principle, every new building addition required modifying the existing permit. When additional expansion was needed, the process had to be restarted from scratch, causing cumulative delays. The government will amend the Building Act to allow "separate new permits" for expansion buildings within industrial complexes above a certain size, independent of the original permit. This is expected to enable the early execution of approximately 2.5 trillion won in investment within the Yongin Semiconductor Cluster. Joo Hwanwook, Policy Coordinator at the Ministry of Economy and Finance, explained, "Companies faced major challenges as construction was halted any time a modification permit was needed due to technological changes. This action reflects corporate feedback."

Tax support is also being newly introduced to strengthen the materials, parts, and equipment (small volume, high demand) ecosystem. A new provision under the "Restriction of Special Taxation Act" (effective 2027-2031) will be created to reduce gift taxes on assets or profits received by entities operating semiconductor pilot testbeds, supporting the construction of demonstration facilities valued at 800 billion won. Regional industrial complex regulations are also being revised. In Ochang Science Industrial Complex, North Chungcheong Province, contiguous green space owned by Cheongju City will be converted into industrial land, inducing 530 billion won in investment. In the Iksan National Food Cluster, eligibility will be expanded from beverage manufacturing to all food and beverage manufacturing, facilitating 350 billion won in new investment. The Pohang and Gumi National Industrial Complexes will approve entry of secondary battery resource recycling businesses, securing an additional 100 billion won in investment.

Overhaul of "1.8m Robot Fence" Regulation to Respond to Physical AI... Site and Safety Regulation Innovation

Excessive safety and site regulations that were obstructing emerging industries will be comprehensively revised. The Ministry of Employment and Labor plans to prepare detailed guidelines by the first half of next year to ensure worker safety when working without fences, in line with the latest safety standards (ISO, KS). Even though collaborative, mobile robots are increasingly being introduced at worksites, the current Occupational Safety and Health Act mandates a fixed "1.8-meter safety fence" based on outdated standards for stationary robots—an issue that has been pointed out as an obstacle to the adoption of physical artificial intelligence (AI) including humanoids.

Furthermore, the Ministry of Land, Infrastructure and Transport will amend the Industrial Sites Act to allow the Minister to directly designate "urban innovation zones" in state-level industrial complexes that are considered strategically important, such as enterprise-centric smart cities. Once designated as an urban innovation zone, usage restrictions will be removed, and high-density, complex development exceeding the theoretical floor area ratio limit (1,500%) will become possible. In addition, to encourage large-scale new investment in non-metropolitan regions, the maximum area for designation of Special Opportunity Development Zones will be increased (from 1.5 million pyeong to 2 million pyeong for metropolitan cities, and from 2 million pyeong to 3 million pyeong for provinces).

Having opened the floodgates for site-pending projects through this first set of measures, the government plans to announce a second set of policies focused on leading projects for super-innovative industries and green sectors in the near future.

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