Government and Venture Investment Industry Engage in Dialogue to Promote Corporate Venture Capital 활성화

Discussion on Rationalizing Investment and Funding Regulations

The government and the venture investment industry have come together to communicate policies aimed at revitalizing corporate venture capital (CVC).

The Ministry of SMEs and Startups and the Fair Trade Commission attended the fourth quarter regular meeting of the CVC Council under the Korea Venture Capital Association and announced on the 19th that they discussed the current status of domestic CVC system improvements and future policy directions.

At the meeting, the Ministry of SMEs and Startups and the Fair Trade Commission shared the CVC system improvement measures they have been promoting, while the CVC industry presented related suggestions and difficulties, facilitating active communication.

At this occasion, the Ministry of SMEs and Startups announced plans to promptly revise the 'Enforcement Decree of the Venture Investment Act' to allow, on a limited basis, the sale of equity in investee companies held by venture investment associations to major investors and affiliates of the association in order to promote M&A activity.

Additionally, they stated that they will continue to monitor the outcomes of the ‘K-Global Venture Capital Summit’ held on the 10th, which was attended by 51 overseas investment institutions including global CVCs, and will continuously promote global exchange and cooperation events to activate collaboration between domestic and international CVCs.

The Fair Trade Commission explained that it is pushing for system improvements to further activate the general holding company CVC system introduced at the end of 2021 in the market.

In November, by excluding ‘overseas startup companies’ under the ‘Act on Support for Small and Medium Enterprises’ from the overseas investment ratio regulation, a foundation was established to actively invest in domestic startups expanding abroad. Under the Fair Trade Act, general holding company CVCs were only allowed to invest in overseas companies up to 20% of their total assets.

They also pledged to strive for the swift passage of amendments to the 'Monopoly Regulation and Fair Trade Act' that would raise the limits on external investment and overseas investment ratios for general holding company CVCs and allow the establishment of CVCs in the form of startup incubators.

Furthermore, supplementary measures to regulate indirect investments in prohibited companies through investments in other project funds were shared. General holding company CVCs are prohibited from investing in their own affiliates, companies invested in by the controlling family, and companies belonging to large business groups.

Active discussions took place between CVC executives, including those from POSCO Technology Investment, and government ministry officials. The Fair Trade Commission and the Ministry of SMEs and Startups promised to carefully review the various opinions raised at the council and create a policy environment where CVCs can function effectively as channels for open innovation through strategic corporate investments. Both ministries plan to continue communication with the CVC industry and strengthen collaboration during the system improvement process.

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