Mid-sized Enterprises Urge National Assembly to Enact Innovative Legislation to Strengthen Corporate Growth Ladder

FOMEK Submits 81 Legislative Reform Proposals
to Eight National Assembly Standing Committees
Including Industry and Finance Committees

In order to strengthen the foundation for sustainable national competitiveness following the semiconductor boom, the mid-sized enterprise sector has emphasized that the National Assembly should actively pursue legislative innovation to reinforce the corporate growth ladder, with mid-sized companies—considered the backbone of the economy—at the core.

The Korea Federation of Mid-sized Industries (FOMEK) announced on September 30 that it had submitted 81 legislative reform proposals to eight National Assembly standing committees, including the Industry, Trade, Energy, SMEs, and Startups Committee.

FOMEK highlighted the urgent need to improve laws and regulations, considering the rapid spread of artificial intelligence (AI). The organization called for the establishment of legal grounds to support the adoption and use of AI by mid-sized enterprises across industries, the introduction of additional investment tax credits to accelerate AI transformation (AX) among manufacturing SMEs and mid-sized firms, and the expansion of tax support for professional talent recruitment. A FOMEK representative stressed, “It is urgently necessary to broaden the current tax support threshold under the Restriction of Special Taxation Act from companies with less than 300 billion won in annual sales to include all mid-sized companies, and to quickly establish a system of tax and financial support that will foster continuous growth, such as creating a dedicated account within Korea Credit Guarantee Fund for mid-sized enterprises.”

The proposals also called for measures to enhance the management stability of mid-sized companies by reducing legal uncertainty in areas such as labor and the environment, and by resolving unreasonable regulations that restrict proactive business activities. Specifically, the proposals include improvements to working hour systems reflecting industry and job characteristics; rationalization of economic criminal penalties and codification of management judgment principles under the Commercial Act; clarification of key issues in the Trade Union Act and establishment of countervailing rights for employers; improvements to the special extended work approval system; exemptions from working hour regulations for high-income professionals; improvements to standards for permitted air pollutant emissions and overlapping regulations on the handling of hazardous chemicals by subcontractors; abolishment of restrictions on shareholder voting rights; and rationalization of industry suitability regulations.

In addition, FOMEK suggested further legislation aimed at social integration and balanced regional development, including a higher employee income tax base threshold, expanded tax support for win-win cooperation expenses, the introduction of income tax exemptions for employees of mid-sized companies located outside the Seoul metropolitan area, and expanded integrated employment tax credits for non-metropolitan mid-sized companies.

Hyuncheol Kim, Executive Vice Chairman of FOMEK, stated, “In order to ensure the renewed momentum for growth, led by the semiconductor sector, spreads throughout the entire industry, I hope the second half of the 22nd National Assembly will broadly listen to the specific needs of businesses on the ground and work to establish a legislative and regulatory environment that actively encourages investment and innovation.”

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