Seoul Gwanak and Gangnam Designated as Venture Promotion Zones... 37.5% Reduction in Acquisition and Property Taxes

Ministry of SMEs and Startups Supports Infrastructure... Creates Collaborative Venture Zone
First Designation in 10 Years Since 2011
Local Governments Establish Startup Funds... Support Startup Ecosystem

Asia Economy DB=Photo by Mun Honam munonam@

[Asia Economy Reporter Kim Bo-kyung] The Gangnam-gu and Gwanak-gu areas in Seoul will be designated as Venture Promotion Districts (hereinafter referred to as Venture Promotion Districts). Acquisition tax and property tax for venture companies within the district will be reduced by 37.5%, and development charges will be exempted.

The Ministry of SMEs and Startups announced on the 10th that the Gangnam-gu and Gwanak-gu areas in Seoul will be designated as Venture Promotion Districts. This follows last year's application for designation by Gangnam-gu and Gwanak-gu, marking the first additional designation in 10 years since 2011.

The Venture Promotion District is a venture company location support system started in 2000 to induce the concentration of venture companies or support infrastructure in concentrated areas to create a collaborative Korean-style venture district.

Once designated as a Venture Promotion District, venture companies within the district will receive a 37.5% reduction in acquisition tax and property tax, along with exemptions from development charges and other benefits.

To be designated as a Venture Promotion District, at least 10% of the small and medium enterprises located in the area must be venture companies, and requirements such as the presence of universities, research institutions, and infrastructure must be met.

The Ministry of SMEs and Startups has supported infrastructure construction such as building a support center worth 140 billion KRW and securing shared equipment, as well as cluster collaboration activities in Venture Promotion Districts.

Currently, 26 regions nationwide are designated as Venture Promotion Districts, with approximately 4,200 venture companies located within these districts as of last September.

Gwanak-gu plans to promote regional development by improving the settlement environment for venture companies, utilizing its high youth population and infrastructure such as Seoul National University, consisting of the Seoul National University campus, Sillim, and Nakseong districts.

The Gwanak-gu Office will establish a youth startup fund worth 20 billion KRW and support venture and startup companies in resolving technical development difficulties and discovering growth engines through the Seoul National University Engineering Consulting Center.

In Gangnam-gu, 8 out of 15 domestic unicorn companies are located. Among 197 venture capital companies registered with the Ministry of SMEs and Startups, 135 (68.5%) are based in Gangnam, and among 41 limited companies or limited liability companies (LLCs) registered as venture investment associations, 26 (63.4%) are located in Gangnam, making it an area with excellent financial infrastructure for venture companies.

After the designation of the venture district, the Gangnam-gu Office plans to support the startup ecosystem in Gangnam-gu by establishing the Gangnam Startup Fund worth 53 billion KRW for newly designated area companies to serve as a catalyst for startup venture investment.

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