Ministry of SMEs and Startups Designates 10 Industrial Complexes in 3 Regions Including Jeonnam as 'Special Support Areas'

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 27th that it has newly designated or re-designated 10 industrial complexes in three regions?Jeonnam, Jeonbuk, and Gangwon?as "Special Support Areas for Local SMEs" (hereinafter referred to as Special Support Areas).

Small and medium-sized enterprises (SMEs) located in the newly designated Special Support Areas can participate in public bids through restricted competitive bidding and negotiated contracts for goods they directly produce. They can also receive tax reductions (50% for five years) on corporate tax, income tax, and local income tax.

Additionally, preferential support is provided for policy fund loan limits, designation as military service companies, research and development (R&D), and more. Through local governments, additional necessary support such as relaxed industrial complex leasing conditions (for prospective tenant companies), preferential financial support, and assistance with logistics and wastewater treatment costs is also available.

The Special Support Area system was introduced in 1995. Under the Act on the Promotion of Small and Medium Enterprises, it was established to revitalize industrial complexes in cities and provinces where industrial concentration and production performance are relatively lower than the national average. The designation period is five years from the date of designation (renewable). Including the two newly designated areas this time, a total of 13 industrial complexes are designated and operated as Special Support Areas.

Through the operation of this system, activation effects were observed in eight industrial complexes designated together at the time, including Gimje Jipyeongseon General Industrial Complex (designated as a Special Support Area in March 2015). As of 2019, the average leasing rate increased by 6.9 percentage points compared to the previous year. During the same period, the number of tenant companies increased by 7.4%, and production value rose by 5.7%.

Shim Jae-yoon, Director of Regional Enterprise Development at the Ministry of SMEs and Startups, said, "The revision of the Act on the Promotion of Small and Medium Enterprises is underway in the National Assembly to expand the system to support difficulties caused by natural disasters and socio-economic structural changes in areas densely populated by SMEs and small business owners." He added, "If the amendment passes within this session, not only existing industrial complexes but also areas densely populated by SMEs and small business owners facing management difficulties are expected to receive benefits such as financial and tax support."

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