Crypto firms get South Korea tax breaks starting September 16
South Korea will let virtual asset trading and brokerage companies apply for venture company status beginning Tuesday, September 16, KoreaTechDesk reports. The designation provides access to tax breaks and government financing programs that were previously unavailable to crypto businesses.
The Ministry of SMEs and Startups approved a revision to the Enforcement Decree of the Venture Business Act at a September 9 cabinet meeting in Seoul. The change removes a restriction put in place in October 2018 that blocked crypto firms from receiving venture certification.
Companies whose main business involves selling or brokering virtual assets can now seek recognition as venture companies. The status grants eligibility for corporate and local tax reductions, including potential exemptions on income, corporate, acquisition, property and registration taxes.
South Korea banned crypto trading and brokerage firms from venture certification in 2018 due to concerns about speculative trading activity. The government is now lifting the restriction after seven years, citing changes in how the market operates under new user protection laws and stricter licensing requirements.
Venture company designation typically provides access to research and development grants, credit guarantees, and broader financing channels. The Special Act on the Promotion of Venture Businesses governs these support mechanisms.
"The regulatory improvement aims to secure future growth momentum in line with the global trend of the digital asset industry," said Han Seong-sook, Minister of SMEs and Startups. The ministry plans to focus on creating "a transparent and responsible ecosystem" to facilitate venture capital flows.
The crypto regulation change follows the implementation of the Virtual Asset User Protection Act, which took effect earlier this year. Government officials pointed to the evolving global status of digital assets when explaining the shift in approach.
Ministry briefings indicate the update is designed to support blockchain-related technology areas, including smart contracts and cybersecurity within South Korea's startup ecosystem. The September 16 effective date formally ends the six-year restriction on crypto firms seeking venture company benefits.
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