Start-up & business operations

How to Apply for the Regulatory Sandbox — Differences Between the Special Exception for Demonstration, Temporary Permit and Rapid Regulatory Confirmation, and Validity Periods

The regulatory sandbox is a system that allows a new product or service blocked by existing laws and regulations to be tested or put on the market under certain conditions. You apply to the ministry in charge of the field, such as the Ministry of Trade, Industry and Resources for industrial convergence and the Ministry of Science and ICT for information and communications convergence. It is divided into rapid regulatory confirmation, which asks whether a permit is required; the special exception for demonstration, for testing and verification; and the temporary permit, for market launch. In the industrial convergence field, the validity period of a special exception for demonstration is in principle 2 years or less and can be extended once.

Procedure

  1. 1. Identify which program applies

    If it is unclear whether a permit or similar approval is required at all, apply for rapid regulatory confirmation. If the laws and regulations have no standards, specifications or requirements that fit, or it is not appropriate to apply the existing standards, the case is eligible for a special exception for demonstration or a temporary permit. If another law or regulation makes it impossible even to apply for a permit, apply for a special exception for demonstration, which allows testing within a limited area, period and scale.

  2. 2. Check the ministry in charge and the governing Act

    For new industrial convergence products and services, apply to the Ministry of Trade, Industry and Resources under the Industrial Convergence Promotion Act. For information and communications convergence technologies and services, apply to the Ministry of Science and ICT under the Special Act on Information and Communications Promotion and Convergence Activation. Other fields, such as finance and regional special zones, have their own governing Acts and ministries in charge, so you must choose the application channel that matches the business.

  3. 3. Prepare the business implementation plan and apply

    Set out in the business implementation plan the regulatory provisions that block the business, the details of the new product or service, the area, period and scale of the demonstration, the plan for ensuring safety and the damage compensation plan, and then apply. The deliberation looks at innovativeness and benefits to users, the growth potential of the related market, the life, health and safety of the public, and the protection of personal information.

  4. 4. Review by related agencies and deliberation

    When the ministry in charge notifies the related administrative agencies of the application, the related agencies reply with the results of their review within 30 days. The time taken to supplement materials is excluded from the calculation, but even in that case they must reply within 90 days. The Regulatory Exception Deliberation Committee then deliberates on whether to allow the exception and on its area, period and scale, and may attach necessary conditions.

  5. 5. Liability insurance, start of business and follow-up reporting

    A business operator granted an exception takes out liability insurance to compensate for personal injury and property damage before starting the business. In the industrial convergence field, the exception may be revoked if, without a justifiable reason, the business is not started within 2 years from the date the exception was granted. When the validity period ends, the operator submits the results of applying the regulatory exception and of the business within 30 days.

Required documents

  • Application form for rapid regulatory confirmation, special exception for demonstration or temporary permit (form prescribed for each field)
  • Business implementation plan (details of the new product or service; area, period and scale of the demonstration)
  • Materials explaining the regulatory provisions that block the business and the reasons an exception is needed
  • Plan for ensuring safety and plan for protecting users
  • Damage compensation plan (plan to take out liability insurance)
  • Business registration certificate; corporate register certificate (for a corporation)
  • Letter of authorization (when filed by an agent)

Fees

In the market, fees generally range from several hundred thousand won to several million won. We will advise you on the fee after a consultation, based on the program applied for and the scope of drafting the business implementation plan.

Legal basis and review date

  • Industrial Convergence Promotion Act, Article 10-2
  • Industrial Convergence Promotion Act, Article 10-3
  • Industrial Convergence Promotion Act, Article 10-4
  • Industrial Convergence Promotion Act, Article 10-5
  • Industrial Convergence Promotion Act, Article 10-6
  • Special Act on Information and Communications Promotion and Convergence Activation, Article 38-2

Checked against the statutes on

Statutes and public notices change, so each case needs to be checked individually. Statute titles are given in English for reference. The Korean statutes are the authoritative text.

Check these first

  • Validity periods and extension criteria differ under the governing Act for each field. The periods in this guide are based on the Industrial Convergence Promotion Act, and for other fields the relevant Act must be checked separately.
  • If the content and scope of the exception are labeled or advertised falsely or with exaggeration, the exception may be revoked.

Frequently asked questions

What is the difference between a special exception for demonstration and a temporary permit?
A special exception for demonstration is for testing and verification, and a temporary permit is for market launch. A special exception for demonstration allows testing without applying the regulation within a limited area, period and scale. A temporary permit temporarily permits a product or service for which there are no fitting standards or specifications, until the laws and regulations are revised.
How long is a special exception for demonstration valid?
In the industrial convergence field, it is in principle 2 years or less. The deliberation committee may set a different period of 4 years or less in view of the nature of the business, and if the related laws and regulations are not revised before expiry, it can be extended once, for 2 years or less. Apply for an extension 2 months before the validity period expires.
How long does rapid regulatory confirmation take?
The related administrative agencies reply within 30 days. If there is no reply within 30 days, it is deemed that the matter is not under their jurisdiction or that no permit or similar approval is required. If the reply is that a permit is required, you are also notified of the necessary conditions and procedures.
Does a business similar to an already approved case go through deliberation from the beginning?
The procedure may be simplified. If the content, method and form are substantially the same as or similar to a case that was previously granted an exception or a temporary permit, the reply period for related agencies is shortened to within 15 days, and the deliberation may be replaced by deliberation by an expert committee.
Can I continue the business after the period of the special exception for demonstration ends?
Not if the exception ends without the laws and regulations having been revised. When the exception ends or is revoked, the sale, use and provision of the product or service are prohibited. You can request revision of the laws and regulations, attaching the results of the business, no later than 2 months before the validity period expires, and if the related agency begins revising them, this can lead to a temporary permit.
What does an administrative agent do in a regulatory sandbox application?
Hwang Yunsang Administrative Office identifies the regulatory provisions that block the business, reviews which program fits among rapid regulatory confirmation, the special exception for demonstration and the temporary permit, prepares the application form and the business implementation plan, submits them to the ministry in charge on your behalf and responds to requests for supplementation.

Contact us

Hwang Yunsang Administrative Office in Songdo, Incheon prepares and submits administrative documents and explains the procedure. If your situation is similar, send us a message.

📍 2697, 26F POSCO Tower-Songdo, 165 Convensia-daero, Yeonsu-gu, Incheon, Republic of Korea · 📞 010-3374-2687 · 🌐 hwangadmin.com

This guide is general information based on public sources. Requirements, documents and deadlines differ by case and by the competent agency, so please confirm them before you proceed.