South Korea plans to provide 26 trillion won ($23.9 billion) worth of support for small start-up companies this year as part of efforts to create a business friendly environment for such venture business activities, officials said Thursday.
The support plan and other measures, including tax incentives, will be unveiled next week, which would represent the fourth large-scale policy package by President Park Geun-hye to boost the slowing economy since her inauguration in February.
"Details have yet to be determined, but we plan to complete discussions among related ministries and agencies by early next week and submit the plan to the economy-ministers meeting scheduled for Wednesday," a government official said on condition of anonymity.
The measures are expected to include 8 trillion won worth of financial support to stimulate start-ups and venture business activities, which will come mostly in the forms of loans and investment. That is in addition to 18 trillion won worth of loan guarantees available for the business community, other sources said.
On Wednesday, Finance Minister Hyun Oh-seok said in a meeting with business people in the venture industry that the government is exploring diverse policy measures to create a venture ecosystem that can encourage active start-up businesses and risk-taking investment.
He noted that the government is considering tax benefits and incentives for angel investors and venture capital companies, while offering benefits to those seeking to sell or buy existing start-ups as part of efforts to make it easier for investment to be withdrawn and re-invested.
A source said that policymakers are planning to grant exemptions on corporate and capital gains taxes on profits reaped from the process of mergers and acquisitions of start-up companies.
"Unlike previous policies that focused on providing support for opening businesses, we need to think about a comprehensive support for venture and start-up companies through financial innovations (focused on their life cycle) of opening businesses, taking risks and withdrawing investment," a financial agency official said.
This move is part of the government efforts to stimulate the sluggish economic recovery. Over the past month, it has announced three large-scale packages -- housing market stimulus measures, a 17.3 trillion won extra budget bill and a set of deregulation policies aimed at boosting corporate investment. (Yonhap News)
