Dong-A Kim of Democratic Party Proposes Three Venture Investment Promotion Bills, Including Enhanced Income Tax Deduction for Angel Investment Outside Seoul Metropolitan Area

Kim Donga, a member of the Democratic Party of Korea, announced on July 27 that he has sponsored the "Three Acts to Promote Venture Investment" (partial amendment to the Restriction of Special Taxation Act), aiming to revitalize the venture and startup ecosystem and to establish a virtuous cycle of investment.

This amendment bill includes specific tax support measures to address the three core challenges of the venture investment ecosystem: revitalizing the exit market, attracting private capital, and fostering regional ventures.

Kim Donga, Member of the Democratic Party of Korea. Photo by Yonhap News

In particular, there is a severe situation in which, despite securing investment and growing with difficulty, the "intermediate exit market" through mergers and acquisitions (M&A) or secondary share acquisition is blocked, leading to a serious bottleneck in reinvestment and thereby accelerating the crisis of local extinction.

Specifically, the bill proposes the following: restoring a 10% income deduction for investments in special purpose venture investment associations, including investments for secondary share acquisition and mergers & acquisitions (M&A); introducing a new capital gains tax exemption and raising the investment tax credit rate (from 5% to 10%) for domestic corporations when investing in venture companies; and expanding the income deduction benefits for angel investments in venture and startup companies located outside the Seoul metropolitan area.

This is a measure to solve the difficulties in the venture ecosystem, where it is hard to achieve reinvestment because the intermediate exit market through M&A or secondary share acquisition is blocked, even after managing to grow via difficult investments. It also aims to prevent the chronic problem of "Seoul-centric investment concentration" within the venture ecosystem.

Assemblyman Kim stated, "Through these Three Acts to Promote Venture Investment, we hope to open the blocked intermediate exit market and create a mutually beneficial venture ecosystem where abundant private capital flows toward innovative companies and regions, enabling everyone to thrive together."

This content was produced with the assistance of AI translation services.