The current laws do not allow general holding companies other than financial holding companies to possess corporate venture capital (CVC) to comply with the principle of separation of industrial and financial capital.

However, experts continue to point out that restrictions on CVC should be relaxed to promote investment in venture businesses.

Venture capital, which is invested in innovative startups in risk-taking situations, is an indispensable agent in the startup ecosystem. In advanced countries, large global companies strategically invest in startups to explore new technologies and actively utilize CVC as a means to incubate innovative companies.

Accordingly, the Act aims to contribute to the vitalization of investment in venture businesses without violating the principle of separation of industrial and financial capital by allowing general holding companies to own CVC, a company that invests in the establishment of small and medium-sized enterprises, while applying restrictions such as obligating them to own one hundred percent (100%) of the shares and to publish notices to enhance investment transparency in CVC.

Details

A. Prohibit the scale of debentures issued by CVC owned by general holding companies from exceeding double their capital (Article 43)

B. Strengthen the obligation of notice publication of CVC owned by general holding companies (Article 45 (2) newly inserted)

C. Specify the requirements for general holding companies to own CVC and accept special exceptions to the application of the “Monopoly Regulation and Fair Trade Act” (Article 49-2 newly inserted)

D. Mandate registration when forming a venture investment association of CVC (Article 50)

Public notices of small and medium business investment companies (Article 45), formation and registration of venture investment associations (Article 50)