Mutual Cooperation Fund to Allow Venture Fund Investment... Amendment Approved at Cabinet Meeting

Enforcement Decree of the Act on Promotion of Mutual Cooperation between Large and Small-Medium Enterprises
Amendment Approved at the Cabinet Meeting

The Ministry of SMEs and Startups announced that it has approved the amendment to the Enforcement Decree of the Act on the Promotion of Mutual Cooperation between Large Enterprises and Small and Medium Enterprises (hereinafter referred to as the 'Mutual Cooperation Fund'), which allows investment in venture funds by the Mutual Cooperation Fund, at the Cabinet meeting on the 18th.

This amendment to the enforcement decree is a follow-up measure to the 'Expansion of the Foundation for Promoting the Inflow of Private Funds into the Venture Investment Market' announced by the government at the 'Public Discussion on Livelihood with the People' on February 8.

The Mutual Cooperation Fund is a private fund contributed by domestic corporations such as large enterprises to the Foundation for Large Enterprises, Small and Medium Enterprises, and Agriculture, Fisheries Cooperation to promote mutual cooperation with SMEs. Companies that contribute to the Mutual Cooperation Fund can designate the use of the fund within the scope prescribed by law.

Until now, contributing companies could designate the use of the fund within 12 items such as promoting technological cooperation, reducing wage gaps, and improving productivity. However, with this amendment to the enforcement decree, 'investment in venture funds' can also be designated as a use of the fund.

The amendment also includes provisions to revise related articles in accordance with the amended Act on the Promotion of Mutual Cooperation between Large Enterprises and Small and Medium Enterprises, which was revised on January 9 to activate the 'Mediation for Adjustment of Payment for Supplies,' a national agenda.

As the application requirements for mediation for adjustment of payment for supplies were deleted in the amended Mutual Cooperation Act, the detailed criteria stipulated in the enforcement decree were also deleted. Previously, there were criteria such as a specific material cost accounting for more than 10% of the contract amount and its price fluctuating by more than 10%, but all these were removed.

The amendment is scheduled to be promulgated on June 25 and will take effect immediately upon promulgation.

Oh Young-joo, Minister of SMEs and Startups, stated, “Allowing the Mutual Cooperation Fund to invest in venture funds creates a channel for large enterprises to more easily supply growth capital to ventures and startups.” He added, “The Ministry of SMEs and Startups will continue to make every effort to enable private funds to invest more boldly in our ventures and startups.”

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