South Korea’s Ministry of SMEs and Startups announced plans this week to remove long standing restrictions that prevent crypto-related businesses from being recognized as venture companies — a classification that comes with significant tax and financial incentives.
Under current regulations, companies in the “virtual asset” sector are excluded from receiving venture company status, effectively locking them out of various state benefits. The ministry now says that this exclusion is “inappropriate,” citing newly implemented legal protections and a broader institutional shift in how the crypto industry is perceived.
Crypto Firms Could Soon Tap into Tax Breaks and State Support
If the proposed amendment is passed, crypto firms will be eligible for the same benefits as other venture companies. These include a 50% corporate tax reduction for five years, a 75% cut in real estate acquisition tax, and advertising discounts of up to 70% on broadcast media.
Moreover, companies already classified as venture firms would be allowed to expand into the digital asset sector without forfeiting their existing status — a significant change that could catalyze new investments and business models.
Public Feedback Open Until Mid-August
The ministry will accept public comments on the proposed amendment until August 18. While a specific enforcement date has not been announced, the move is part of what officials describe as a broader effort to “nurture the digital asset industry” in a safe and legally protected environment.
“The government is currently focusing on nurturing the digital asset industry,” the ministry stated, highlighting that the industry’s legal safeguards are now robust enough to justify its inclusion in the venture ecosystem.
South Korea Adopts a Broader Trend Toward Crypto-Friendly Policies
This regulatory update follows a series of crypto-friendly shifts in South Korea’s broader financial landscape. Just days earlier, the Bank of Korea paused its central bank digital currency (CBDC) pilot, citing the need to reassess the government’s stance on stablecoins and how they intersect with a future CBDC framework.
A senior banking official told local media that the delay is intended to allow more time for policy clarification, reflecting the country’s increasingly careful but open approach to digital finance.
As South Korea continues to evolve its digital asset policies, the proposed amendment could serve as a turning point, signaling a more inclusive and supportive stance toward the crypto sector.
