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Lee So-young, Minister of SMEs and Startups.

The South Korean government is stepping up efforts to significantly ease unreasonable regulations that hinder startup growth.

The Ministry of SMEs and Startups (MSS) held the second plenary meeting of the Regulatory Rationalization Committee on Oct. 23 to discuss a plan to streamline regulations affecting startups throughout their life cycle, from establishment and growth to renewed entrepreneurial attempts after failure. Although South Korea's startup ecosystem ranks among the world's top 20, its business environment ranks 32nd, highlighting the urgent need to improve complex regulations and administrative procedures. In respo오후 2:14 2026-10-23nse, the ministry has worked with relevant government agencies, including the Office for Government Policy Coordination, the Financial Services Commission and the Ministry of Employment and Labor, to develop 10 key measures supporting "more challenges, faster growth and broader opportunities."

First, the existing rigid and uniform eligibility criteria for government startup support will be made significantly more flexible. Under a new special provision, entrepreneurs who experience unavoidable interruptions in business management due to circumstances such as military service or childbirth will be eligible for up to five additional years of government support beyond the current seven-year period during which a business is recognized as a startup.

For early-stage startups established less than three years ago, which often take considerable time to generate revenue, strict financial soundness requirements, such as debt ratios and capital impairment, will no longer serve as preliminary restrictions on applications for government research and development (R&D) projects. Instead, they will be considered as part of the selection evaluation process. The government also plans to include the so-called "venture studio model," in which accelerators (ACs) jointly establish companies with equity stakes of at least 50%, within the definition of eligible startups to support rapid growth.

The government will also improve financing and investment conditions that have restricted access to funding for early-stage startups. Common guidelines will be revised to simplify and standardize the complicated documentation requirements, which currently vary by bank, for lifting daily transfer limits on bank accounts. In particular, companies with a record of being selected for startup support programs run by credible institutions, including MSS, will be able to have those limits lifted more quickly.

In addition, the government will revise fund agreements so that extensions of the terms of sub-funds under government-backed policy funds can be approved with a specified level of investor consent rather than unanimous approval. It will also expand funding channels by adding startup-focused and specialized private collective investment vehicles to the list of eligible investment institutions for venture business certification. Documents and forms submitted to multiple evaluation agencies for special technology-based stock market listings will also be standardized to significantly reduce administrative burdens.

The policy framework will also be redesigned to help entrepreneurs turn previous startup experience into future success. The existing "good-faith business management assessment" will shift its focus from technological and commercial viability to efforts to recover from business failure, easing practical burdens on entrepreneurs. The government also plans to relax grounds for exclusion from startup support programs to reflect business realities, including sole proprietors launching additional businesses in different industries and corporate executives establishing businesses independently. It will also introduce an integrated certification system, provisionally called the "Challenge and Startup Career Certificate," to verify and manage records of experience as a corporate representative and in preparing to launch a business.

Building on these measures, MSS plans to establish a Startup and Venture Regulatory Innovation Committee under the Regulatory Rationalization Committee. It will also expand public-private regulatory screening and testing channels to continue removing regulatory obstacles while reflecting concerns raised on the ground.

                                                                                                                Oh Se-eun