Leap to a Global Startup Powerhouse... Promoting 'Startup Korea'

Support for Overseas Korean Entrepreneurs and Domestic Foreign Entrepreneurs
Establishment of a 2 Trillion Won Scale 'Startup Korea Fund'

A ‘Startup Korea Fund’ worth a total of 2 trillion won, jointly funded by the government and the private sector, will be established. This fund will be invested in deep tech that delves deeply into specific technologies, secondary markets that purchase stocks or equity held by venture capital (VC) or angels, and K-Global targeting overseas markets. Koreans who start companies abroad can receive government support on par with domestic corporations, and visa systems will be relaxed to promote entrepreneurship and employment of foreigners in Korea.

On the 30th, Lee Young, Minister of SMEs and Startups, announced the ‘Startup Korea Comprehensive Measures’ containing these details.

Lee Young, Minister of SMEs and Startups, is conducting a pre-briefing on the comprehensive Startup Korea measures on the 29th at the briefing room of the main building of the Government Seoul Office in Jongno-gu, Seoul.
[Photo by Ministry of SMEs and Startups]

The Startup Korea Fund will be funded not only by the government but also by various economic actors such as financial institutions, successful venture companies, large corporations, and pension funds, together with the government’s mother fund. Various incentives to encourage participation from private investors are being reviewed. The goal is to raise a total of more than 2 trillion won by 2027. The ‘Global TIPS’ program will also be launched, which supports companies that receive a certain amount of investment from overseas VCs and establish overseas corporations. This approach promotes targeting overseas markets from the early stages through global incubating and mentoring. Twenty companies will be selected next year. The global fund will be expanded to a scale of 10 trillion won by next year, and a new overseas expansion dedicated fund will be established to invest in startups and venture companies that have established local corporations or joint ventures overseas.

As part of encouraging global challenges, a basis will be established to directly support Koreans who start businesses locally overseas. Overseas corporations that meet certain requirements, such as having R&D institutions and manufacturing facilities in Korea to create employment and added value, can apply for startup support projects and be evaluated on equal footing with domestic corporations.

Foreigners with excellent business models in terms of technology and business feasibility will be granted startup visas, and when extending the technology startup visa (D-84), comprehensive criteria including sales, investment attraction, employment, patent rights, and R&D performance will be considered. This takes into account that early-stage startups typically require some time before commercialization and generating sales. For industries with high demand for startup personnel, such as computer system design and system software developers, visa issuance requirements for foreign professionals will be eased. The Ministry of Justice has completed reviews regarding visas, and detailed requirements will be further discussed during the revision of the Ministry of Justice’s notifications.

The startup support methods will also be diversified into ‘motivation-based’ types. The ‘success fee’ method, which recovers part of the additional support funds when sales occur, and the ‘subsidy + investment’ method, which combines SAFE investments without valuing the company and grants call options to founders or recovers investment funds during follow-up investments, will be applied. Simultaneous support of subsidies and loans through a single review, and a ‘subsidy + loan’ method that recovers principal and interest by applying the startup foundation fund operation method for loans, will also be implemented. The Ministry of SMEs and Startups explained that this is a method that can expand support per company without additional government financial burden while providing motivation for innovative growth.

To dynamically transform the startup ecosystem in regions neglected compared to the metropolitan area, ‘Startup Clusters’ will be established. ‘Space K,’ a startup complex space, will also be built in local areas to attract youth. When metropolitan companies selected as ‘super-gap startups’ relocate to non-metropolitan areas, priority support will be provided for R&D, commercialization, infrastructure, etc. Separate tracks or additional points will be given, and priority admission to regional startup incubation centers will be assisted. The ‘Regional Angel Investment Hub,’ which reduces investment imbalance between metropolitan and non-metropolitan areas, will be expanded. The current three angel investment hubs in the Chungcheong, Honam, and Southeast regions aim to increase to five by 2027.

Mergers and acquisitions (M&A) to scale up promising venture companies will be supported. A ‘special loan program for venture and small and medium-sized enterprise acquisition financing’ and a dedicated SME M&A fund will be newly established to increase small-scale M&As where market formation is sluggish. Strategic investments by large corporations in startups will also be encouraged. Regulatory relaxations such as external investment and overseas investment limits for corporate VCs with general holding companies will be reviewed.

In addition, the Ministry of SMEs and Startups will broaden the base for entrepreneurship so that soldiers, researchers, and university students can challenge startups. The ‘Science and Technology Specialist Officer’ system will be linked with startup education, and the introduction of a new master’s track in addition to the existing bachelor’s track is being considered.

Minister Lee said, “The goal of the Ministry of SMEs and Startups is to make Korea’s startup ecosystem the number one in Asia and one of the top three startup countries globally. Through these measures, by 2027, we aim to have five global top 100 unicorns, venture investment scale of 14 trillion won, the third highest entrepreneurship index in the world, and rank seventh in the global startup and venture ecosystem, realizing Startup Korea where ventures and startups lead the digital economy.”

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