Ministry of SMEs and Startups Excludes Corporate Groups with Total Assets Over 5 Trillion Won from Support

Exclusion of Publicly Disclosed Corporate Groups (Total Assets of 5 Trillion Won) from the Scope of Small and Medium Enterprises

[Asia Economy Reporter Kim Heeyoon] Corporate groups subject to disclosure with total assets of 5 trillion won or more will be excluded from benefits supporting small and medium-sized enterprises (SMEs). The Ministry of SMEs and Startups announced on the 9th that the amendment to the Framework Act on Small and Medium Enterprises, which expands the exclusion of large corporate groups from the SME category from the existing mutual investment restriction corporate groups (with total assets of 10 trillion won or more) to disclosure-subject corporate groups, will be enforced.

Effective from the 11th, this amendment establishes a new clause excluding disclosure-subject corporate groups under the Framework Act on SMEs, deletes the definition of mutual investment restriction corporate groups, and changes the 3-year grace period for mutual investment restriction corporate groups, which applies when exceeding the SME scope, to disclosure-subject corporate groups, thereby fundamentally preventing support for large corporate groups as SMEs.

With the revision of the enforcement decree, as of May, 30 disclosure-subject corporate groups other than mutual investment restriction corporate groups and 811 affiliated companies have been excluded from SMEs, allowing government budgets previously allocated to companies belonging to disclosure-subject corporate groups to be redirected to relatively underprivileged SMEs. An official from the Ministry of SMEs and Startups stated, “We will continue to review related systems, including adjustments to the SME scope, to ensure that more government support goes to genuine SMEs.”

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