In order to reduce the unification cost, economic cooperation between South and North Korea is very important. Until recently, the intra-regional investment and trade have been increased. However, the high transportation cost is an important bottleneck in economic cooperation between two Koreas. In this paper, we introduce the proposals of special economic zone(SEZ), in which the tariff and tax are exempted, to promote the economic cooperation between two Koreas. Also, we analyze the strategy in order to expand the SEZ. In the proposal of SEZ, we examine various considerations before the establishment of SEZ, such as the location or geographical conditions, appropriate size of SEZ, environmental concerns and military and security problems. In the strategy of the establishment of SEZ, we suggest that, in the first stage, SEZ should be established inside of South or North Korea near the DMZ. After then, it could be expanded to the inside of DMZ.