"Large and Small-Medium Enterprises Also Become TIPS Operators"‥Government Fully Revises Startup Support Act

Abolition of Accelerator Registration Requirements... Effective Immediately Upon Promulgation
Extension of Manufacturing Startup Company Fee Exemption from 3 to 7 Years
Goal of Building a 'Startup Powerhouse'..."Generous Policy Support Provided"

Minister Kwon Chil-seung of the Ministry of SMEs and Startups held a meeting on the 22nd with seven young startup leaders who received the CES 2021 Innovation Award and were selected as Forbes Asia 30 Under 30 in 2021 at Tipstown S1 in Gangnam-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Bo-kyung] The qualification requirements for TIPS (Tech Incubator Program for Startup) operating institutions, which nurture startup companies, have been significantly relaxed, allowing large and small-to-medium enterprises to participate in the program. The exemption benefits for manufacturing startups' burden charges have been expanded, and new industry startups can receive government support for up to 10 years of business operation.

The Ministry of SMEs and Startups announced on the 21st that the full revision of the "Small and Medium Enterprise Startup Support Act (Startup Support Act)" was approved at the Cabinet meeting and will be implemented from next year.

This legal amendment reflects the intention to support the founding and growth of innovative companies with the goal of building a startup powerhouse.

Since the Startup Support Act was enacted in 1986, voices calling for revision of the law, which focused on manufacturing startups, have increased due to continuous changes in the startup environment caused by the Fourth Industrial Revolution and COVID-19.

Accordingly, the law was completely revised to reflect the era's shift to a "digital economy based on innovative startups" and to support the establishment and promotion of startup policies needed in the new environment.

First, the exemption period for 12 burden charges imposed when manufacturing startups establish factories has been extended from the existing 3 years to 7 years. Manufacturing startups are expected to receive an additional exemption of about 10 billion KRW in burden charges through this revision.

Knowledge service startups, which had previously been excluded from exemption, can now receive exemption from 13 burden charges for 3 years. However, the exemption period for water usage charges is set at 3 years.

In the case of new industry sectors, since it takes a long time to commercialize and businessize products, a basis was newly established to support companies with up to 10 years of business operation through startup support projects.

Current TIPS Program Structure

Explicit provisions were also newly established to support new industry and new technology startups through public-private cooperation and to activate open innovation among companies.

Through this, large and small-to-medium enterprises, public institutions, and others can participate in the TIPS program, which is expected to activate in-house startups and spin-off startups.

TIPS is a private investment-led technology startup support program. Startup teams with technology items leading the global market are selected and intensively nurtured under the leadership of private (operating institutions), and the government supports them with research and development (R&D) funds and other means.

With this legal amendment, the qualification requirement that only institutions registered as accelerators could participate as TIPS operating institutions has been abolished. A Ministry of SMEs and Startups official said, "We plan to announce the application for TIPS operating companies in January next year. Although qualification requirements have been significantly relaxed, evaluations and screenings of investment capabilities will be conducted strictly."

Support policies to promote startups' overseas expansion and the inflow of excellent foreign personnel into Korea have been prepared, and regulations that hinder re-challenge and re-startup have also been improved.

The provisions expanding the exemption period for burden charges for manufacturing startups (from 3 years to 7 years) and expanding the scope of TIPS operating institutions will be enforced immediately upon the promulgation of the law on the 28th. Other amendments will be implemented from June 29 next year.

The Ministry of SMEs and Startups plans to promptly revise and newly establish enforcement ordinances and ministry notices as follow-up measures to the legal amendment to ensure smooth implementation.

Minister Kwon Chil-seung of the Ministry of SMEs and Startups stated, "Based on the fully revised Startup Support Act, we will spare no policy support so that anyone with ideas and technology can start a business and grow into a global company."

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