"Establishment of Baby Unicorn Nurturing Project"... 65 SME On-site Difficulties Improved

Measures to Resolve On-Site Difficulties for SMEs
Support for Innovative Growth... Promotion of Finance and Investment
Mutual Growth and Revitalization of Local Markets... Enhancing Corporate Management Vitality

[Asia Economy Reporter Kim Daeseop] The government will establish the 'Baby Unicorn (companies valued under 100 billion KRW) 200 Development Project' to ensure sufficient scale-up funding for promising startups in various fields such as new drug development. Additionally, the exemption period for startup burdens on small and medium enterprises (SMEs) will be extended to revitalize finance and investment.

On the 9th, the Ministry of SMEs and Startups announced the 'Measures to Resolve On-site Difficulties of SMEs' at the National Policy Coordination Meeting chaired by Prime Minister Chung Sye-kyun. The meeting was attended by Minister Park Young-sun of the Ministry of SMEs and Startups and heads of 17 major ministries and agencies related to SME regulations. It was conducted via video connection between the Government Sejong Complex and the Government Seoul Office.

At this meeting, 65 improvement measures addressing on-site difficulties faced by SMEs, which were directly visited and heard by the heads of these 17 ministries and agencies over 62 sessions, were prepared. These measures are divided into four areas: ▲support for innovative growth ▲support for revitalizing finance and investment ▲activation of win-win and local commercial districts ▲enhancement of corporate management vitality.

First, in the field of support for innovative growth, about 40 baby unicorns will be selected this year with a budget of 12 billion KRW. By 2022, 200 baby unicorns will be discovered and provided with scale-up funding to nurture them into prospective unicorns (companies valued over 100 billion KRW).

The baby unicorn development project was established as a support measure because scale-up funding was necessary for the business expansion and growth of existing startups and SMEs, but there were limitations in securing sufficient funds under existing systems. It will be implemented starting this month. The Ministry of SMEs and Startups will also expand the special guarantee scale for prospective unicorns to 200 billion KRW this year.

In the area of support for revitalizing finance and investment, the exemption period for 12 types of startup burdens on SMEs, excluding water usage charges, such as waste and air emissions, will be extended from the current 3 years to 7 years.

This extension of the startup burden exemption period reflects on-site voices that, although some burdens are exempted for 3 years after startup for companies facing difficulties in initial funding, companies in the early survival phase of 4 to 7 years were excluded, creating a blind spot. The measure will be completed by the end of this year through amendments to the Small and Medium Enterprise Startup Support Act.

By the end of this year, measures to revitalize funding through collateral such as intellectual property rights and bonds will also be prepared. Due to the loan practices centered on real estate, SMEs and small business owners with insufficient real estate collateral capacity have had limited use of non-real estate collateral such as bonds and intellectual property rights. To address these difficulties, an 'all-in-one collateral system' will be introduced to evaluate and acquire various movable assets of a company as collateral at once.

In the field of win-win and local commercial district activation, the business requirements for alley-type shopping districts will be relaxed. Until now, to be designated as a shopping district under the Distribution Industry Development Act, the proportion requirement of wholesale and retail stores (50%) had to be met. This excluded commercial districts in areas densely populated by small business owners from support.

The Ministry of SMEs and Startups plans to designate areas with a certain number of small business stores as alley-type shopping districts instead of the retail store proportion requirement, supporting improvements such as parking environment and revitalizing local commercial districts.

In the field of enhancing corporate management vitality, temporary removal and attachment of registration plates by automobile repair businesses will be permitted. Temporary removal and attachment of registration plates frequently occur during vehicle repairs, but each time required approval from the city or provincial governor.

This difficulty will be addressed by allowing temporary removal and attachment of registration plates within the business site for repair work, improving convenience for repair businesses and vehicle owners.

The Ministry of SMEs and Startups plans to work with related ministries to ensure that follow-up measures for each task in this SME on-site difficulty resolution plan are completed promptly.

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