[Asia Economy Reporter Junhyung Lee] The Ministry of SMEs and Startups announced on the 31st that the Boryeong Jupo 2nd Agricultural and Industrial Complex in Chungnam has been newly designated as a 'Special Support Area for Small and Medium Enterprises (SMEs)'.
A Special Support Area for SMEs is a region where the management of local SMEs is at risk of deterioration due to the regional economy, requiring government support. The government supports the normalization of management for SMEs and small business owners in the Special Support Area for up to two years, with the possibility of extending the period by up to two additional years. In June last year, the 'Act on the Promotion of Small and Medium Enterprises' was amended to expand the designation targets of Special Support Areas from industrial complexes outside the metropolitan area to nationwide SME and small business clusters.
SMEs located in the Special Support Area can participate in public bids through restricted competitive bidding and negotiated contracts for goods they produce directly for up to four years. They can also receive a 50% reduction in corporate tax, income tax, and local income tax for five years. Additionally, the Ministry of SMEs and Startups provides support such as expert consultation, preferential financing, dedicated research and development (R&D), business diversification, and marketing.
Most of the resident companies in the newly designated Boryeong Jupo 2nd Agricultural and Industrial Complex are related to thermal power plants. After the closure of Boryeong Thermal Power Units 1 and 2 in December last year, the resident companies organized a voluntary consultative body and began business structure transformation into fields such as eco-friendly automobiles.
Chungcheongnam-do applied for the designation of the Boryeong Jupo 2nd Agricultural and Industrial Complex as a Special Support Area for SMEs on the 3rd of this month to support resident companies. The Ministry of SMEs and Startups conducted an on-site inspection on the 14th of this month.
Woo Kyungpil, Director of Regional Enterprise Development at the Ministry of SMEs and Startups, said, “This designation of a Special Support Area for SMEs is the first new designation case after the system reform,” adding, “It is meaningful in supporting the business transformation of resident companies in the Boryeong Jupo 2nd Agricultural and Industrial Complex over the next two years.”
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