Choo Kyung-ho: "Expansion of tax exemption for multiple voting rights and stock options in ventures... Announcement coming soon"

Venture Company Meeting

On the 6th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho visited the venture company Megazone Cloud in Gangnam-gu, Seoul, to check the status and conditions of venture investment and held a meeting with representatives of attending companies regarding measures to revitalize venture investment. 2022.10.6 [Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 6th, "We will promptly establish a venture investment environment that meets global standards, such as introducing multiple voting rights, expanding the tax exemption limit for stock options, and Silicon Valley-style finance."

On the morning of the same day, Deputy Prime Minister Choo visited the venture company Megazone Cloud located in Gangnam-gu, Seoul, and held a meeting with venture companies. He said, "We will actively organize tax incentive support and related systems so that the private sector can play a more leading role in the venture investment market." The government plans to announce related measures soon after detailed discussions.

Under the low-interest rate trend that has continued for several years, the scale of domestic venture investment has steadily grown based on abundant liquidity. The investment scale, which was 2.38 trillion won in 2017, increased every year and recorded 7.68 trillion won last year.

However, with the recent acceleration of global tightening and concerns about the contraction of the real economy, investment sentiment has sharply frozen. In particular, in the second quarter of this year, the scale of venture investment shrank by 4.2% compared to a year earlier.

Deputy Prime Minister Choo expressed concern, saying, "The contraction of venture investment could hinder the growth and survival of innovative startups and venture companies," and pointed out, "Despite external growth, our venture investment ecosystem has structural limitations such as high dependence on policy finance and low utilization of private resources."

He added, "It is necessary to take the recent deterioration of domestic and international conditions as an opportunity to strengthen the foundation of the venture investment market and further advance the ecosystem," emphasizing, "Above all, we must accelerate the smooth inflow of abundant private funds and professionals into the venture investment market."

To this end, Deputy Prime Minister Choo said, "We will continue to expand support for venture investment through new contributions to the Korea Fund of Funds and the use of recovery resources, actively utilizing private funds and capabilities throughout the venture investment ecosystem, including startup, growth, and recovery stages." He also added, "We will strengthen regulatory improvements to revitalize mergers and acquisitions (M&A) and support the enhancement of expertise for private investors and fund management institutions."