South Korea legalizes support for social solidarity economy
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South Korea’s National Assembly passed the “Social Solidarity Economy Basic Act” on August 20, 2026, after 13 years of debate. The law formally recognizes co-operatives, social enterprises, and other community-based organizations as a unified “social solidarity economy” and establishes a national framework to support them.
For years, these groups operated under separate regulations and within different government departments.
The new law defines social solidarity economy as “economic activity based on mutual cooperation and solidarity to realize the common interests of community members and social values.” The legislation prioritizes organizations that are autonomous from the government and operate democratically, reinvesting profits into their communities. This goes beyond simply funding social contributions, as it aims to create a continuous flow of money into these organizations.
The law specifically addresses “social and solidarity finance” by promoting financial products tailored to these groups, developing methods for measuring social impact, and encouraging increased investment. Furthermore, the act directs public institutions to prioritize purchasing goods and services from social solidarity economy organizations and consider them when outsourcing public services. The government can also support them through the use of public property and facility development, while still ensuring the organizations remain independent.
Similar laws are emerging in Europe, with Spain and France already establishing legal frameworks for co-operatives and social enterprises as a distinct economic sector.
