Cryptocurrency trading and brokerage companies in South Korea are about to be recognized as startups, enjoying incentive policies from the government.
The South Korean government plans to remove restrictions on cryptocurrency businesses in the 'risk business' category, thereby helping them access tax incentives and financial support.
MAIN CONTENT
South Korea is preparing to amend laws to classify cryptocurrency businesses as startups.
Since 2018, cryptocurrency businesses have been excluded from incentive programs due to restrictive policies.
The adjustment will help cryptocurrency companies access tax and financial incentives.
What new policies from South Korea affect cryptocurrency businesses?
An update from the Ministry of Small and Medium Enterprises and Startups of Korea on July 9, 2024, stated that it will amend special legal regulations to support startups, including cryptocurrency companies.
Previously, cryptocurrency companies were excluded from the risk business list and not recognized as startups, thus suffering disadvantages in incentive policies. This change paves the way for cryptocurrency companies to benefit from support policies such as tax reductions and better access to funding.
Why were cryptocurrency businesses previously excluded from the risk business list?
The South Korean government's decision in 2018 narrowed the scope of industries classified as risk businesses, excluding the cryptocurrency trading sector while still retaining 5 restricted areas such as entertainment and gambling.
This puts cryptocurrency companies at a disadvantage compared to other startups and has caused significant negative reactions from the business community due to discrimination in policy.
“Bringing the cryptocurrency trading sector back into the startup category is an important step to promote innovation and sustainable development for the digital economy.”
Ms. Kim Hyun-joo, Minister of the Ministry of Small and Medium Enterprises and Startups of Korea, July 9, 2024
What benefits can cryptocurrency businesses receive after being recognized?
When recognized as startups, cryptocurrency companies in South Korea will receive tax incentives, including a reduction in corporate income tax and exemptions from many related fees.
In addition, businesses can easily access government funding and startup support programs, facilitating expansion and enhancing competitiveness in the global market.
“The new policy will help cryptocurrency businesses leverage resources and develop groundbreaking financial technologies.”
Mr. Lee Jae-won, expert in the field of digital finance, 2024
How are the incentive policies compared between the previous phase and now?
Criteria Before 2018 From 2018 to 2024 After 2024 Amendment Scope of businesses on the risk list Wide, including many startup sectors Excluded the cryptocurrency trading sector Includes cryptocurrency trading businesses Tax incentives Fully applied Limited or not applied Restores income tax reduction incentives and fees Financial support Easily accessible funding Difficult, losing competitive advantage Eligible for startup funding support programs
Frequently Asked Questions
When will the policy take effect? The South Korean government announced on July 9, 2024, that it plans to implement it in 2024. What policies previously restricted cryptocurrency businesses? They were not recognized as risk businesses and were excluded from tax and financial incentives from 2018 to now. What specific tax incentives do cryptocurrency businesses enjoy? Corporate income tax reduction and exemption from many business-related fees. What impact will the policy change have on the South Korean cryptocurrency market? It will help businesses increase their competitiveness, promote innovation, and develop a sustainable cryptocurrency market. What do cryptocurrency businesses need to do to enjoy the new incentives? Re-register as a risk business according to regulations and meet the standards set by the Ministry of Small and Medium Enterprises.
Source: https://tintucbitcoin.com/cong-ty-tien-dien-tu-han-quoc-rui-ro/
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