[2] Its most notable feature is the Kaesŏng industrial park, which operated from 2004 to 2016 as a collaborative economic development with South Korea (ROK).

The park is located ten kilometres (six miles) north of the Korean Demilitarized Zone, an hour's drive from Seoul, with direct road and rail access to South Korea.

[3] As of April 2013[update], 123 South Korean companies were employing approximately 53,000 DPRK workers and 800 ROK staff.

Construction started in June 2003, and in August 2003 North and South Korea ratified four tax and accountancy agreements to support investment.

Specifically, this meant the creation of residential areas, hospitals, shopping centers, and even a proposed theme park to attract tourists.

[8] The firms take advantage of low-cost labor available in the North to compete with China to create low-end goods such as shoes, clothes, and watches.

[8] In 2006, Park Suhk-sam, senior economist at the Bank of Korea, predicted the industrial zone could create 725,000 jobs and generate $500 million in annual wage income for the North Korean economy by 2012.

Five years later, another $1.78 billion would be earned from annual corporate taxes levied on South Korean companies participating in the industrial project.

By 2006, the 15 initial firms had all begun production including JCCOM, Yongin Electronics, TS Precision Machinery, JY Solutec, Magic Micro, Hosan Ace, Romanson, Munchang Co., Daewha Fuel Pump, Taesong Industrial, Bucheon Industrial, Samduk Trading, Shinwon, SJ Tech, and Sonoko Cuisine Ware.

[17] Green Doctors, an NGO founded in Busan in January 2004, received official government permission to open a hospital in the region in 2005.

[21] On 3 April 2013, North Korea began to deny South Korean employees access to the Kaesong Industrial region.

[26] On 4 July, both countries agreed in principle that the Kaesong Industrial Park should be reopened, as tensions between the two began to cool.

[6] On 13 August South Korea said it would start distributing insurance payments to businesses in the complex, but also said it was open to new wording on the issue of joint control of Kaesŏng.

The move, seen as precursor to formally closing the region, sparked a seventh round of talks which South Korea label as "final".

[6][28] On 13 September, before the reopening of Kaesŏng Industrial region, the two governments held a subcommittee meeting to iron out additional issues regarding entrance, legal stay, communication, customs and passing.

Seoul said all operations at the complex would halt, to stop the North using its investment "to fund its nuclear and missile development".

[38] In December 2017, an expert panel investigating the decision to close the park found that there was no evidence that North Korea had diverted wages to fund its nuclear program.

The head of the panel Kim Jong-soo said, "The presidential office inserted the wage-diversion argument as major grounds, yet without concrete information, sufficient evidence and consultations with related agencies, mainly citing defector testimonies that lack objectivity and credibility.

This impairs the decision's legitimacy and could constrain our ground over a future restart of the complex, while hampering the companies' rights to protect their assets due to the hasty pullout process."

[46] Kaesŏng Industrial Region is served by Korean State Railway from Panmun Station through the Pyongbu Line.