Corporate CVC External Investment Relaxed to 50%
Eight Core Technologies of Biopharmaceuticals Designated as National Strategic Technologies
The government will invest 400 billion KRW next year and 2.2 trillion KRW over the next five years to create a world-class cluster. To revitalize the venture ecosystem, it will increase the ratio of external funds that corporate venture capital (CVC) of general holding companies can receive and the overseas investment ratio of CVCs.
On the 18th, the Ministry of Economy and Finance held an emergency economic ministers' meeting jointly with related ministries at the Government Seoul Office and announced the "Follow-up Action Plan for Fostering Advanced Industry Global Clusters," which includes these details. This announcement concretizes regulatory improvements and budget and tax support measures to implement the "Advanced Industry Global Cluster Promotion Plan" presented at the emergency economic ministers' meeting on June 1.
First, to establish global clusters, the government plans to invest 400 billion KRW next year and 2.2 trillion KRW over five years (including local government funds) in innovation capability-based clusters such as national advanced strategic industry specialized complexes, advanced medical complex zones, and research and development special zones. In particular, to expedite the establishment of the national advanced strategic industry specialized complexes, it will pursue exemption from the preliminary feasibility study for the "Yongin Semiconductor Specialized Complex" public institution.
Regulations on subcontracting fire-fighting facility construction will be relaxed to support the rapid establishment of specialized complexes. Although fire-fighting facility construction must be ordered separately from other industries to prevent poor construction due to bulk contracting, exceptions will be allowed to permit bulk ordering.
In the second half of this year, a bio-specialized complex announcement will be made, with plans to newly designate it in the first half of next year. To create a private-sector-led venture ecosystem, the external investment limit ratio of general holding company corporate venture capital (CVC) will be expanded from 40% to 50% of individual fund contributions, and the overseas investment ratio will be increased from 20% to 30% of total assets.
Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is delivering opening remarks at the 'Emergency Economic Ministers' Meeting and Export Investment Measures Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 18th. Photo by Jo Yong-jun jun21@
The budget for cash support for foreign investment will be increased more than fourfold from 50 billion KRW this year to 200 billion KRW next year, and support for foreign-invested companies related to new growth and advanced/sub-materials and parts technologies residing in innovation capability-based clusters will be strengthened.
The government also proposed revising related laws such as the "Industrial Facility Land Occupancy Permission Facility Notice" and the "Research and Development Special Zone Management Plan" by next month to allow business support service companies such as legal, accounting, startup planners, and venture capital to move into cluster industrial facility zones. To enhance the expertise and technological competitiveness of domestic researchers, the return requirements for researchers will be relaxed to allow them to continue research locally through employment leave after completing overseas research institution assignments.
Regarding residential conditions, when recruiting additional tenants for job-linked housing, the "no homeownership requirement" will be excluded to allow workers who own homes to move into nearby public rental housing when working in regional clusters. Previously, the government added eight core technologies related to biopharmaceuticals to the national strategic technologies under the Restriction of Special Taxation Act last month. Through this, the government plans to strengthen tax benefit support from the second half of the year for research and development (R&D) expenditures and facility investments.
To strengthen cooperation with the Boston bio cluster in the United States, 86.4 billion KRW will be invested next year in the "Boston-Korea R&D Project." Seven leading bio R&D projects, including antibody new drug artificial intelligence (AI) and Doctor Answer 3.0 development, will be promoted.
Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "We will accelerate the fostering of advanced industry global clusters, small and medium enterprises, and the digitalization of educational services to strengthen our industrial competitiveness and create future growth engines."
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