Jiseong Bae, Chairman of the Venture Capital Association, Proposes Policy to the Transition Committee: "Corporate Reserves to Ventures"

Jiseong Bae, Chairman of the Korea Venture Capital Association (CEO of IMM Investment)

[Asia Economy Reporter Park So-yeon] The Korea Venture Capital Association delivered policy recommendations to the Presidential Transition Committee, focusing on establishing a foundation for the formation of private mother funds and tax support.

Jisung Bae, Chairman of the Korea Venture Capital Association (CEO of IMM Investment), recently told Asia Economy, "Since the COVID-19 pandemic, a 'second venture boom' has emerged, and the situation has become difficult to manage with government-led investments alone," adding, "We have submitted policy proposals to the Economic Subcommittee 2 of the Transition Committee to revitalize private venture investment."

The Venture Capital Association proposed measures to expand the inflow of private funds, including ▲expanding tax support for venture investments ▲establishing a foundation to promote the formation of private-led venture mother funds ▲extending the duration of venture funds.

Specifically, they suggested expanding the scope of non-taxable investors for capital gains arising from the sale of equity invested in venture companies to include general corporations. Currently, non-taxable investors include venture capital companies, fund management corporations or mutual aid business operating corporations, and individuals, but general corporations are excluded.

Additionally, they proposed increasing the corporate tax credit benefit for general corporations investing in venture funds from the current 5% to 10% in the future. They also recommended establishing explicit legal grounds for the formation of private mother funds and providing tax support related to venture funds.

Chairman Jisung Bae stated, "Strong policy support is needed to ensure that money does not stagnate and that funds retained within private companies flow into our lifeblood, venture companies," adding, "From the perspective of large corporations, they can participate as strategic investors (SI) without losing promising companies to overseas investors, receive corporate information, and seek good merger and acquisition (M&A) opportunities."

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