Major Overhaul of SW Promotion Act After 20 Years... Effective from the 10th

Deliberation of the Entire Amendment to the Enforcement Decree of the Software Industry Promotion Act at the Cabinet Meeting

[Asia Economy Reporter Seulgina Jo] The Ministry of Science and ICT announced on the 1st that the entire amendment to the Enforcement Decree of the Software Industry Promotion Act was approved at the Cabinet meeting and is scheduled to be enforced on the 10th along with the entire amendment to the parent law, the Software Industry Promotion Act.

The amendment to the Enforcement Decree was prepared following the passage of the entire amendment to the Software Industry Promotion Act in the National Assembly last May. The number of articles will be expanded and reorganized from 55 to 69.

Expansion of Support and Investment in the Software Industry

First, the amendment allows the Minister of Science and ICT to designate and entrust regional software industry promotion agencies to promote the software industry by region, and relaxes the requirements for designating software promotion facilities and promotion complexes.

The number of software businesses required to reside in software promotion facilities and complexes has been lowered from 10 to 5 (from 20 to 10 in special cities) for promotion facilities, and from 50 to 25 (from 100 to 50 in special cities) for promotion complexes. This is expected to revitalize promotion facilities and complexes and serve as hubs supporting software industries suited to regional characteristics.

Additionally, to enable the public sector to promote software projects by utilizing private capital and technology, the legal basis for private investment-type software projects has been introduced into the law, and the Enforcement Decree stipulates the requirements and procedures for these projects.

While minimizing restrictions such as whether private investment accounts for more than 50% of the total project cost, incentives applying exceptions to the large enterprise participation restriction system are provided to activate private investment.

Furthermore, to allow software companies to utilize intellectual property rights, the law stipulates that, in principle, national agencies must approve requests for the export of software deliverables. The Enforcement Decree specifically details exceptions to this rule. Reasons for disapproval of software deliverable export by national agencies or other public software projects are limited to secrets under security work regulations and cases where the Minister of Science and ICT and the Minister of the Interior and Safety consult and announce jointly.

Improvement of the Software Project Environment

The amended law specifies the principles of fair contracts to foster a fair trade environment even in the private market, and mandates that matters stipulated in the Enforcement Decree be compulsorily included in contracts. The Enforcement Decree requires contracts to specify methods and timing for confirming task contents, procedures for changing contract amounts and periods, compensation for damages, scope of defects, and criteria for judgment, thereby strengthening contract fairness.

The composition and operation methods of the Task Review Committee have also been specified in detail. By establishing disqualification criteria for members with conflicts of interest, the fairness of the Task Review Committee’s operation is expected to be enhanced.

Song Kyung-hee, Software Policy Officer at the Ministry of Science and ICT, stated, “The Software Promotion Act, prepared through long-term public-private cooperation, provides an institutional foundation for new growth and fair competition in the software industry.” She added, “We will actively work with the industry and related ministries to ensure that the amended system is firmly established in the software industry field.”

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