KCCI Urges Swift Passage of Semiconductor and AI Support Bills, Proposes 30 Legislative Tasks for Regular National Assembly Session

Urgent Need to Strengthen Competitiveness of Advanced Industries
through Swift Passage of Semiconductor and AI Support Bills
Promoting Productive Finance by Easing Separation of Industrial and Financial Capital
and Expanding Venture Investment

The Korea Chamber of Commerce and Industry (KCCI) has called for the swift passage of 30 bills deemed urgent at industrial sites ahead of the 2025 regular session of the National Assembly. Most of these bills directly impact business activities, including support for high-tech industries such as semiconductors and artificial intelligence (AI), the easing of the separation between industrial and financial capital, and the improvement of breach of trust laws.

On October 16, the KCCI stated, "Major bills jointly proposed by both ruling and opposition parties, such as the Semiconductor Industry Support Act and the Venture Investment Act, still have not cleared the National Assembly," adding, "Institutional improvements needed by businesses should not be held back by political schedules."

The 30 tasks presented this time are centered on alleviating regulatory bottlenecks and investment restrictions on the ground. The main points include: ▲ Strengthening the competitiveness of high-tech industries through the Semiconductor Special Act and AI Support Act ▲ Improving capital circulation by easing the separation of industrial and financial capital and expanding venture investment ▲ Reducing management risks by revising breach of trust and inheritance tax systems. The KCCI emphasized that nearly half of these, or 14 tasks, are bills of mutual interest to both parties, stating, "This is a time when action is needed rather than debate."

Urgent Call for Swift Passage of Semiconductor and AI Bills

The KCCI identified the rapid passage of high-tech industry support bills, including amendments to the Semiconductor Special Act and the Restriction of Special Taxation Act, as the most urgent issue. Currently, nine semiconductor support bills are pending in the National Assembly, which include the establishment of a presidential Semiconductor Special Committee, rapid infrastructure development, expansion of R&D tax credits, and exemption from the 52-hour workweek. The KCCI pointed out, "Although there is no disagreement between the ruling and opposition parties on the direction of the bills, discussions have stalled," adding, "As global competition intensifies, delays in legislation could cause the entire industry to fall behind."

Furthermore, the KCCI stressed that the AI industry is a sector where the technology gap directly translates into national competitiveness, making it urgent to expand tax support for data centers, strengthen power and water infrastructure, and establish policies to foster AI professionals. The KCCI suggested, "AI data centers require large-scale electricity and cooling water, but the current system cannot support this," and proposed that "the government should prepare comprehensive support measures covering tax, energy, and site selection."

Additionally, the KCCI requested the enactment of a "Special Act on RE100 Industrial Complexes" to enable companies to achieve 100% renewable energy (RE100) usage. It explained that while the metropolitan area suffers from a lack of renewable energy supply, regions such as the southwest and Jeju have a surplus of power, making it necessary to designate industrial complexes and build infrastructure according to regional conditions.

Emphasis on Easing Separation of Industrial and Financial Capital and Expanding Venture Investment

The easing of regulations on the separation of industrial and financial capital was cited as a key task for revitalizing productive finance. The KCCI emphasized that companies with industrial and technological capabilities should be allowed to directly own asset management firms to establish strategic industry funds, lowering institutional barriers. The current Monopoly Regulation and Fair Trade Act and Capital Markets Act restrict large corporations from owning financial firms or investing in affiliate shares, which is seen as blocking the flow of large-scale private capital needed to foster high-tech industries. The KCCI stated, "Easing the rigid separation of industrial and financial capital under the holding company system is necessary to establish industry-based funds," and added, "A model that combines industry and finance, such as the case of Intel in the United States building a new factory through a 51 to 49 joint venture with asset management firm Apollo, is needed."

The decrease in domestic venture investment from 15.9 trillion won in 2021 to 11.9 trillion won last year was also highlighted as a problem. The KCCI stated, "To prevent the venture ecosystem from shrinking, the 30-year limit on the Korea Fund of Funds should be abolished, and tax support should be expanded to facilitate the inflow of private capital."

The KCCI also proposed introducing a system that allows dividend income from high-dividend companies to be taxed separately rather than as part of comprehensive income. The KCCI explained, "Separate taxation of dividend income can encourage investor participation in capital markets and strengthen companies' capital circulation structures."

"Reducing Management Uncertainty by Improving Breach of Trust Laws and Easing Inheritance Tax"

The KCCI also proposed institutional improvements to reduce management uncertainty for businesses. It pointed out that the breach of trust law is defined too broadly, resulting in repeated cases where managerial decisions are retrospectively subject to criminal punishment. The KCCI stated, "A system that punishes even managers who take on risky investments stifles innovation," and called for revisions to breach of trust provisions in the Criminal Act, Commercial Act, and the Act on the Aggravated Punishment of Specific Economic Crimes, as well as codifying the business judgment rule, which currently exists only in case law.

The KCCI also said the inheritance tax system needs to be revised. It suggested that rather than lowering tax rates, it would be more desirable to make the payment structure more realistic, presenting three alternatives to distribute companies' tax burdens. First, allow large companies to defer payment for up to 10 years; second, change the valuation basis for listed stocks from short-term prices to long-term average prices; and third, introduce a "two-stage taxation system" that combines inheritance tax and capital gains tax, so that part of the tax is paid at the time of inheritance and the remainder at the time of disposal.

Other proposals included the enactment of special laws for the petrochemical and steel industries, exemptions from working hour regulations for R&D personnel, and the introduction of a legislative impact analysis system for bills proposed by lawmakers. Kang Seokgu, head of the KCCI Research Division, stated, "With the rise of high-tech industries in China and trade pressure from the United States, companies' concerns are growing," adding, "The National Assembly should review regulations in light of industrial realities and focus on creating an environment where businesses can invest."

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