Government to Increase Survival Rate of Small and Venture Businesses Facing Closure Due to COVID-19

On the 15th, Kim Tae-nyeon, the floor leader of the Democratic Party of Korea, Jo Jeong-ok, the chairman of the Fair Trade Commission, Kim Sang-jo, the chief of the Blue House Policy Office, and other main attendees at the 'Dang-Jeong-Cheong Euljiro Livelihood Issues Meeting' held at the National Assembly are shouting "Fighting" and taking a commemorative photo. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Moon Hyewon] On the 15th, the ruling party, government, and Blue House announced the ‘Fair Economy System Improvement Measures to Support Overcoming the Novel Coronavirus Infection (COVID-19)’ at the National Assembly Members' Office Building. The system improvement measures consist of a total of 28 tasks across four areas, including ‘Improvement of Business Environment for Small Business Owners and Self-Employed.’

First, regarding the improvement of the business environment for small business owners and the self-employed, the government decided to prepare measures to protect small business owners who suffered damage due to COVID-19, such as those in the food service industry, and to revitalize the depressed neighborhood commercial districts. The Ministry of SMEs and Startups plans to promote six tasks, including ▲establishing designation criteria for neighborhood shopping districts ▲introducing a public-private joint autonomous business adjustment council ▲securing enforcement measures under the Livelihood-Type Suitable Industry Act ▲expanding the distribution of standard contracts for franchises and agencies.

Specifically, criteria will be established to recognize ‘areas densely populated with restaurants’ as neighborhood shopping districts eligible for support under the Traditional Market Act, enabling them to receive support such as specialized market development and facility improvements.

When large corporations enter new business areas and an autonomous business adjustment process between large and small-to-medium enterprises begins, private experts will be allowed to participate in the process to enhance the professionalism of the adjustment.

Additionally, if a large corporation violates the Livelihood-Type Suitable Industry Act by acquiring or starting businesses corresponding to small business livelihood sectors (such as bookstores, vending machine operations, LPG retail businesses) and fails to comply with corrective orders, standards for imposing enforcement fines will be established.

In the area of ‘Strengthening the Foundation for SME Startups, Transactions, and Damage Relief,’ support will be provided to increase the survival rate of small and venture startups at risk of closure due to COVID-19. The government plans to improve subcontracting and payment conditions so that subcontractors can more smoothly recover increased costs such as supply cost rises due to COVID-19, and strictly block unfair practices by large ordering institutions, including public institutions, in the rapidly growing online distribution sector due to COVID-19.

To this end, the Ministry of SMEs and Startups will expand the eligibility for startup incubation centers located within universities and research institutes that provide business space and management/technical incubation services to early-stage startups from the current ‘within 3 years of establishment’ to ‘within 5 years (up to 30%) of establishment.’

Furthermore, violations of the Win-Win Cooperation Act by consignors in consignment transactions will be specified and reflected in the ‘Fairness Guidelines for Consignment Transactions.’

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