Establishing Corporate Research Centers Made Easier... Promoting R&D for Delivery Apps and More

[Asia Economy Reporter Junho Hwang] To encourage research and development (R&D) activities in service companies, the requirements for establishing corporate-affiliated research institutes have been relaxed. Most service sector companies, except for six industries including cryptocurrency exchanges, can now operate affiliated research institutes regardless of their sales volume, and the qualification requirements for dedicated research personnel have been eased. As a result, it is expected that the establishment of affiliated research institutes in service sectors such as delivery apps and real estate platforms will increase.

Relaxation of Standards for Establishing Corporate-Affiliated Research Institutes

The Ministry of Science and ICT announced the revision of the Enforcement Decree and Enforcement Rules of the Act on the Promotion of Basic Research and Support for Technology Development on the 2nd.

First, regulations on the industries of corporate research institutes have been relaxed. Corporate-affiliated research institutes can now be established in most service sectors except for six industries. The six industries are general entertainment bars, dance entertainment bars, other bars, management and operation of other gambling facilities, dance hall operations, and blockchain-based cryptocurrency asset trading and brokerage.

The personnel criteria for establishing corporate-affiliated research institutes in mid-sized companies have also been eased. The previous sales volume criterion has been removed, and recognition as a corporate-affiliated research institute is granted if only seven dedicated research personnel are secured.

The government also extended the application of the separated area (space for research) recognition requirement, previously applied only to small enterprises, to medium-sized enterprises as well. Additionally, the separated area size was expanded from 30㎡ to 50㎡, and the mandatory reporting period for changes to corporate-affiliated research institutes was extended from 14 days to 30 days. The qualification requirements for dedicated research personnel were simplified to include degrees, certifications, and research experience.

Instead, institutional measures were established to prevent the establishment of fake research institutes. Corporate business registration certificates can be verified through the administrative information joint use network, and small business confirmation certificates issued by the Ministry of SMEs and Startups can be checked. To prevent false reporting of dedicated research personnel, proof of enrollment in the four major social insurances or withholding tax statements can be verified.

The government expects that the revision will lead to an increase in the establishment of corporate-affiliated research institutes in service industries such as open real estate platforms, delivery apps, and unmanned delivery robots.

Meanwhile, the number of government-approved corporate-affiliated research institutes was counted at 40,750 as of 2019. Among them, 9,202 are in the service sector. The total number of research personnel is 337,420, of which 55,189 are engaged in research activities in the service sector.

This content was produced with the assistance of AI translation services.