South Korea Passes Framework Act on the Social and Solidarity Economy After 13 Years

An article by SSEGOV - GSEF's Continental Co-Chair for Asia

A new national framework will coordinate SSE policies, strengthen social finance, and support the sustainable growth of Korea’s social and solidarity economy.

On August 20, 2026, the National Assembly of the Republic of Korea passed the Framework Act on the Social and Solidarity Economy, marking a major milestone for the country’s social and solidarity economy (SSE).
The Act establishes, for the first time, a comprehensive national framework covering diverse SSE actors, including social enterprises, cooperatives, community businesses, self-sufficiency enterprises and social ventures. It defines SSE as economic activities based on reciprocity, cooperation and solidarity that pursue the common interests of community members and social value.
The passage of the Act follows the Comprehensive Plan for the Development of the Social and Solidarity Economy, jointly prepared by 20 government ministries and announced in June 2026. Together, the Comprehensive Plan and the Framework Act represent important steps toward establishing a coherent and sustained national policy framework for SSE in Korea.

Thirteen Years Toward Legislation

The Framework Act was first proposed in 2014 during the 19th National Assembly. Similar bills were repeatedly introduced in the 20th and 21st National Assemblies but expired without final passage.
In the 22nd National Assembly, the Public Administration and Security Committee passed the bill unanimously in March 2026, and the Legislation and Judiciary Committee in April, before the plenary session gave final approval on 20 August.
Its passage reflects 13 years of effort by policymakers, local governments, civil society, and SSE practitioners to establish a coherent institutional foundation for SSE in Korea. SSEGOV, the Asia Continental Co-chair, has been one of the key organizations consistently supporting the legislation.
It also aligns Korea with the growing international recognition of SSE, reflected in recent initiatives and recommendations by the United Nations, the International Labor Organization (ILO), and the OECD to strengthen policy and institutional frameworks for the sector.

What Will Change?

Until now, Korea’s SSE policies have largely been divided across different laws, ministries, and programs according to organizational type. These silos created inefficiency and redundancy across policy programs. The Framework Act provides an overarching structure to coordinate them at the national level, albeit not replacing the existing laws.
Building on the Comprehensive Plan announced in June, which set out the government’s overall policy direction for the SSE, the Act provides a legal and institutional foundation to sustain and coordinate these policies over the longer term.
Under the Act, a Social and Solidarity Economy Development Committee under the President will coordinate national policy. At the same time, the government will establish a five-year Master Plan for the Social and Solidarity Economy to promote cooperation across ministries and between national and local governments.
The Act also formally institutionalizes social and solidarity finance, providing a better legal basis for patient capital and social investment, including loans and guarantees for SSE organizations. Other measures embrace expanded preferential public procurement, support for education and training, market access, and the use of public assets for social innovation.
Together, these measures are expected to create a more integrated and sustainable ecosystem for the Korean SSE organizations.

From Local Solutions to National Policy

The new framework is also expected to strengthen the role of SSE in addressing challenges facing local communities, including inequality, regional depopulation, and mismatch of supply and demand in social services.
Across Korea, SSE organizations are already developing community-based solutions in areas where various social problems have emerged, such as vacant property, climate crisis, lack of care services, and local unemployment. The Framework Act provides a stronger basis for connecting these local initiatives with national policy and for expanding successful
models across regions.
It also strengthens the foundation for cooperation between national and local governments, allowing locally developed solutions to play a greater role in a broader social and economic context.

A New Chapter for Korea’s Social and Solidarity Economy

The passage of the Framework Act formally recognizes the SSE as an important area of national policy. It provides a common institutional framework for organizations pursuing both economic and social value.
At the same time, the legislation marks the beginning of a new phase. Its practical impact will depend on the enforcement decrees, budget allocations and detailed policies developed in the coming months.
The Act will be promulgated following government procedures and Cabinet approval. It will then enter into force six months after promulgation.
After 13 years of legislative efforts, Korea has established a national legal foundation for the SSE. The next step is to translate this framework into meaningful change for communities and organizations, while contributing to the growing global movement for a more inclusive, sustainable, and solidarity-based economy.