[THE INVESTOR] The government on Feb. 1 said it plans to make norms more flexible to enable hotels, singing rooms and beauty salons to receive startup status from April, if they are equipped with new technologies such as artificial intelligence and internet of things.
Hong Jong-hak, minister of the newly created SMEs and startups ministry, said the government will lift a ban on 18 type of businesses that can be categorized as startups that were previously prohibited. They include hotels, other accommodation providers -- such as Airbnb -- real estate leasing, golf courses, among others. When the firms receive startup status they could receive investments from venture capitalists and enjoy a corporate tax cut for startups.
Five areas of business, including bars and entertainment venues, as well as casinos, are still banned from getting startup status.
The newly established public group will take charge of the certification process for startups, unlike now where the government associated group -- led by Korea Technology Finance Corporation and Small and Medium Business Corporation -- is responsible.
“Our goal is to create a growing venture ecosystem that is led by private sector, not the government,” said Hong. “We are planning to revise startup and venture related laws as well for the nongovernment organizations to lead the sector.”
The government, with the latest change, hopes the number of startups that make more than 100 billion won (US$93 million) in sales will increase to more than 800 in 2022, in comparison to 550 last year.
By Ahn Sung-mi (firstname.lastname@example.org)