Startups whose operations are suspended because of military service or childbirth will be recognized as startups for up to five additional years. Requirements for extending the life of sub-funds backed by government policy funds will be eased, and companies preparing for technology-based special listings are expected to face lighter burdens.
The Ministry of SMEs and Startups said on the 23rd that it submitted the startup deregulation plan for discussion at the second plenary meeting of its Regulatory Rationalization Committee. At the meeting, the ministry drew up measures covering uniform and rigid startup support criteria, improvements to financing and investment conditions for startups, and support for second attempts by founders with prior startup experience.
First, a special provision will be created to extend the period of government support for startups when the chief executive suspends operations for military service or childbirth. Previously, the company's age had to be under seven years to qualify for startup support, with no exception even if the chief executive was unable to run the business because of military service or childbirth. Under the revised rules, companies will be able to receive startup support within a window extended by up to five years.
For government research and development support, startups less than three years old will be exempt from existing financial soundness assessments. The measure reflects views from the industry that an existing provision barring companies with debt ratios of 1,000% or more from applying for government R&D programs placed a burden on young startups. In addition, companies in which an accelerator holds a majority investment stake will be recognized as startups.
Requirements for extending the duration of sub-funds backed by policy funds will also be relaxed. Previously, all limited partners had to agree; going forward, an extension will be possible with the consent of a set share of them. Differences in document requirements and evaluation criteria across institutions for technology-based special listings will also be addressed. Operating guidelines for the expert evaluation system will be revised to establish common submission documents and standard forms when multiple evaluations are conducted. A certification system will also be created to allow startup chief executives to be issued a "startup challenge career certificate." It will first apply to applicants to the "Startups for All" project.
The ministry said it plans to build public-private regulatory rationalization governance for new industries where technology changes quickly but regulation fails to keep pace with shifts in technology and markets, and to continue pursuing regulatory rationalization by reflecting voices from startups on the ground. It added that it will create a Startup and Venture Regulatory Innovation Committee under the Regulatory Rationalization Committee, where private-sector experts and relevant ministries will discuss regulatory rationalization measures, and will expand regulatory testing channels, including a joint regulatory demonstration project for startups and a regional regulatory-free zone system.