The Ministry of SMEs and Startups said that it has cleared the Cabinet meeting on the 23rd of amendments to the Enforcement Decree of the Act on the Promotion of Venture Investment and the Enforcement Decree of the Special Act on the Promotion of Venture Businesses to carry out follow-up measures to the comprehensive package announced last year to take a leap toward becoming one of the “four major venture powers” and to improve the venture investment system. The amendments focus on strengthening the growth base for venture companies and startups and revitalizing the venture ecosystem.
Under the amendments, autonomy in managing venture funds will be significantly enhanced. The investment mandatory targets for an individual investor fund managed by a startup planner will be expanded from companies within the first three years of business operations to startup companies in the fourth to fifth years of business operations that have no track record of attracting investment. This is expected to substantially ease the burden on promising firms that have technological capabilities but face difficulties in raising funds. In addition, the upper limit on the proportion of investments in listed companies by individual investor funds will be raised from the existing 10% to 20%.
Regulations will also be relaxed for cases in which a corporate venture capital affiliated with a large business group and the investee company later become part of the same large business group. By granting a 9-month grace period to dispose of the investee company’s shares, the conditions for investors to recover their investment funds are improved. In addition, the scope of fintech-based financial services that venture investment companies, etc., can exceptionally acquire is being reorganized from the existing industry-based criteria into criteria based on approval, authorization, or registration, preventing confusion on the ground and encouraging related investments.
Measures to increase investment flexibility were also included. The amendments abolish the 20% mandatory investment rules for startups and venture companies that had been uniformly applied to each individual venture investment partnership and revise the rules so that only 40%—based on the total fund amount held by the asset manager—will apply. As a result, asset managers will be able to establish flexible investment strategies tailored to the characteristics of each fund.
The framework for managing venture investment and the rules for operating the fund of funds (Mother Fund) will also be newly reorganized. When extending the existence period of the Mother Fund, new procedures and grounds are introduced that allow the allocation and payment of investment principal and returns to participating members who wish to withdraw, boosting the reliability and transparency of operations. To respond to the growing inspection demand for venture investment companies and partnerships, beginning in 2027, dissolution, liquidation, and regular inspection 업무 will be transferred to regional offices of the Ministry of SMEs and Startups, and the startup planner statistical work will be transferred to the Initial Investment Accelerator Association to strengthen expertise.
A commemorative week is being established to reexamine the performance of the venture ecosystem. Through amendments to the Enforcement Decree of the Special Act on the Promotion of Venture Businesses, the first week of every December will be designated as Venture Company Week. The Ministry of SMEs and Startups plans to carry out awards and publicity for outstanding venture companies during this period to boost the pride of venture business people.
The enforcement decree amendment that cleared the Cabinet meeting will take effect on July 1, 2026 after the presidential approval and promulgation. However, the delegation of authority for the work of the regional offices of the Ministry of SMEs and Startups is expected to apply starting January 1, 2027. Han Sung-sook, Minister of the Ministry of SMEs and Startups, said the amendment is the result of improving regulations so that the venture investment market can operate more autonomously and flexibly, adding that the ministry will continue its efforts to ensure that the reorganized system takes root successfully at investment sites and that private capital flows actively into venture and startup businesses.
