This study explores the ways to facilitate the educational service industry in Korea through the deregulation for the establishment of foreign educational institutions. The study particularly aims at suggesting policy guidelines to reduce the disproportionate regulatory burdens on the educational service industry to create new markets as well as analyzing their economic impacts.

The study emphasizes providing foreign educational institutions with incentives by amending unnecessarily tightened regulations such as prohibition of profit repartriation. The study suggests “No Regulation Free Investment Zone” to be established in the Seoul Metropolitan area. This promotion will be an effective measure to absorb the overheated demand for studying abroad while relieve the concerns over introducing a market-oriented system in the educational service industry. Also, the study suggests that the government fully function as a bridge linking foreign educational institutions and investors rather than itself directly providing financial support to foreign educational institutions. According to the study’s estimates, the alleviation of regulation would create 93,000 jobs and the effect on production inducement worth 8.5 trillion won by 2020.