Ministry of SMEs and Startups 2025 Business Report “Strengthening Support for SMEs to Drive Economic Growth”

The Ministry of SMEs and Startups (Minister Oh Young-joo, hereinafter referred to as the Ministry of SMEs and Startups) reviewed the policy promotion conditions in the SME, venture, and small business sectors and announced the '2025 Ministry of SMEs and Startups Work Plan' containing the main policy directions for 2025.

In a joint work report conducted by four ministries, including the Ministry of SMEs and Startups, under the theme of ‘Economic Risk Management and Enhancing Economic Vitality,’ the Ministry of SMEs and Startups presented three major goals: ① revitalizing the people’s economy, ② innovation and scale-up, and ③ preemptive response to the future.

◆ [Policy Environment] Preemptive response needed to the continued complex crisis and changes in the management environment

Prices are stable, but the management conditions of small and medium-sized enterprises and small business owners are worsening due to the accumulated aftereffects of rising prices and interest rates and the slow recovery of domestic demand. In addition, management difficulties are becoming more severe due to the increase in additional fixed costs such as energy and labor costs.

In addition, it is expected that negative external conditions such as high exchange rates and global protectionism will expand, and that small and medium-sized enterprises will face increasing difficulties due to a shortage of human resources and aging CEOs as a result of the entry into a super-aging society.

The specific tasks to be implemented to resolve these difficulties are as follows.

◆ [Goal 1] Revitalizing the people's economy: Alleviating the current management shock and stimulating domestic demand

1. Alleviate the three major management shocks we are currently facing

[Financial shock]

We will strengthen support for the three sets of small business finance, including the supply of 3.2 trillion won in conversion guarantees, relaxation of requirements for repayment extension, and granting grace periods for large-scale loans, and implement the 'So-Mang (Small Business Hope) Recharge Project', which provides additional loans to faithful repayers of the three sets.

In addition, 30 'Small Business Debt Adjustment Centers' will be established nationwide and, through collaboration with the rehabilitation court, the debt adjustment procedures of small business owners will be supported quickly. In order to significantly shorten the bankruptcy and rehabilitation period, which currently takes about 12 months, a fast track exclusively for small business owners will be established to help small business owners in management crisis recover.

[Exchange rate shock]

In the event of damage due to continued high exchange rates, up to 1.5 trillion won in policy funds will be provided to businesses affected by imports and exports to help them manage stably. Using export vouchers, the cost of trade insurance and guarantees required in the export process will also be supported up to a limit of 10 million won.

In addition, we plan to present standards for entering into agreements to reflect exchange rate fluctuations in the delivery price and provide consulting services for this purpose to help consignment companies share exchange rate risks with each other.

[Investment Recovery]

To promote the recovery of the venture investment market, we will swiftly implement the 1 trillion won SME Mother Fund investment project in the first quarter and create a new venture fund of 1.9 trillion won.

In addition, we will boldly ease venture investment regulations to the global standard level by expanding the scope of investment obligations, which are currently limited to startups and venture companies, to all small and medium-sized enterprises, thereby promoting the inflow of private capital.

2. Supply of domestic demand promotion materials

The large-scale consumer festival, Donghaeng Festival, will be held twice in the first half of the year and four times a year, and a 15% special discount and refund event for digital Onnuri gift certificates will be held before and after the Lunar New Year holiday to invigorate the rigid consumer sentiment. Onnuri gift certificates will be issued at a record-breaking 5.5 trillion won, and convenience for users will be improved by expanding the places where they can be used.

The number of duty-free shops for small and medium-sized enterprises with a high sales-generating effect will be expanded from 3 to 6 in the airport, and the number of companies entering the market will also be increased from 900 to 1,800. For small and medium-sized enterprises and start-ups, the commission for exclusive duty-free shops, which is currently at 23%, will be reduced by half to 10% to support the development of early-stage markets. In addition, the goal is to achieve KRW 900 billion in public home shopping sales by arranging more than 30% of broadcasts for small and medium-sized enterprises and small and medium-sized enterprises.

In addition, we plan to maximize the effect of increasing actual sales in the public procurement market by excluding products manufactured by large companies and overseas companies from being supplied by small and medium-sized distribution companies disguised as small and medium-sized business products.

3. Strengthening the sales safety net

We are introducing a new 'Small Business New Start Hope Project' that provides integrated support from business closure to employment and re-establishment.

The store demolition cost support fund will be expanded from the current 2.5 million won to 4 million won, and a low-interest, long-term installment repayment program will be introduced to reduce the burden of closing down small business owners. Through the linkage of the Hope Return Package (Ministry of SMEs and Startups), a specialized employment program for small business owners, and the National Employment Support System (Ministry of Employment and Labor), employment support funds worth up to 9.45 million won will be paid. In addition, when a closed small business owner wishes to start a business again, we will seek a stable new start by supporting industry conversion and re-establishment commercialization through dedicated PM matching.

We will also create an environment where online platforms such as delivery apps and small business owners can coexist. Through collaboration with the Fair Trade Commission, we will comprehensively investigate and improve terms and conditions that are unilaterally disadvantageous to small business owners, focusing on oligopolistic delivery platform companies.

We plan to conduct a survey on the overall platform usage, including the fee structure and unfair practices, targeting online platform users and announce the results. In addition, we plan to expand the pilot evaluation of shared growth to include delivery platforms and consider including them in the shared growth index in the mid to long term.

In order to ease the burden of fixed costs for small business owners, we will support up to 300,000 won to approximately 680,000 small business owners who use delivery and courier services, and reduce card commission rates based on the sales volume of small business owners (in cooperation with the Financial Services Commission), thereby supporting the alleviation of fixed cost burdens.

[Goal 2] Innovation and scale-up: Fostering innovative companies in new industries and scaling up through digital transformation

1. Fostering startups that lead new industries

We will foster 1,000 cutting-edge startups that will lead new industries.

We strategically support deep-tech startups with global competitiveness in ultra-gap fields such as system semiconductors and AI to level up from discovery to commercialization and listing. We discover the top 10% startups in the employment, sales, and investment fields, and systematically support them to scale up through support for commercialization through anchor organizations and open innovation in each field, as well as technical advice in preparation for IPOs.

In addition, we will also establish a specialized program to intensively support commercialization and product verification according to the technological characteristics of startups in five high-growth fields, including AI fabless and healthcare.

In addition, we are also establishing a 'Deep Tech Value Up Program' to discover promising startups and support matching and cooperation based on the demands of large corporations. We conducted a pilot project with Hyundai Motors in 2024, and we plan to expand to eight large corporations this year. In addition, we are also newly establishing a 'Value Up Fund' in which the mother fund supports 1:1 matching investment when large corporations invest.

By increasing the investment in the mother fund and attracting investment from large and medium-sized companies, we will create a domestic venture investment market worth 13 trillion won, and by additionally creating a global fund of 1 trillion won, we will expand the total to 13 trillion won to support the growth of innovative companies.

In order to create an environment where excellent overseas talent can start a business in Korea, the issuance requirements for the 'Startup Korea Special Visa' will also be improved. Rather than formal requirements such as degrees and investment attraction performance, the plan is to promote the inflow of overseas talent into Korea by evaluating them based on business performance and innovation.

In order to advance the global startup and venture base and build a network, a 'tentatively named K-Startup Silicon Valley Town' will be created. It will be created in Silicon Valley, where it is easy for Koreans to start a business, and it will serve as a public-private global startup and venture hub, and will be used as a base for global expansion.

2. Innovative small business owners taking a leap forward in digitalization

We will support the digitalization of 13,000 small business owners by establishing a ‘Smart Small Business Roadmap’ that takes into account the level of digital transformation.

We have also established the 'TOPS Growth Ladder Project' to promote digitalization through collaboration with private online platforms, where the private sector discovers and the government and online platform companies establish a support system for each stage of growth that takes into account the level of digital transformation of small business owners.

In addition, we support the efficiency of store management by distributing subscription-based service SW that enables sales management and data analysis, and we help small business owners transform digitally by expanding the distribution of kiosks that can be easily used by the disabled and elderly.

We will also establish a small business export support program utilizing global online distribution networks. Amazon, a global distribution giant, will establish a new 'Icon (Amazon X Lycon) Project' to provide close support by packaging strategic consulting, product development, and exports.

In addition, we plan to foster small business owners with export capabilities by collaborating with the Ministry of Food and Drug Safety to provide customized overseas expansion consulting for each brand using Olive Young’s infrastructure and support for overseas certification.

3. Small and medium-sized enterprises that double their productivity

Accelerating manufacturing innovation for small and medium-sized enterprises through AX and DX.

We will promote digital transformation tailored to each site through automation, intelligence, and autonomy of processes, such as introducing manufacturing robots to approximately 1,700 small and medium-sized manufacturing companies, smart factories based on manufacturing data, and autonomous factories using digital twins.

Through the enactment of the ‘Tentatively Named Small and Medium Enterprise AI Diffusion Act’ and the ‘Tentatively Named Smart Manufacturing Industry Promotion Act’, we will establish a legal foundation to promote AI utilization by small and medium enterprises and foster smart manufacturing specialized companies. In addition, we will expand the distribution of AI solutions, such as detecting machine and equipment abnormalities in manufacturing sites and optimizing product design, by establishing three additional manufacturing AI centers.

To promote innovation in small and medium-sized enterprises, the three R&D tracks will also be fully operational.

We will expand the R&D supply of SMEs in national strategic technology fields (12 fields including semiconductors and secondary batteries), which is currently at 38%, to over 50%. In addition, we will promote ‘global cooperation R&D’ that supports SMEs’ ​​commercialization R&D and resolution of technical difficulties by utilizing the technologies owned by leading overseas research institutes. Finally, through collaboration with the Ministry of Science and ICT, we will transfer patented technologies of 23 research institutes in the science and technology field to ultra-gap startups to promote the commercialization of R&D results.

We will also provide policy financing for each stage of growth to help small businesses grow from small to medium-sized businesses, and from small to medium-sized businesses to medium-sized businesses. In addition, we plan to establish new criteria for each industry for small to medium-sized businesses that take into account recent changes in prices and industries, so that the growth ladder system can operate smoothly.

[Goal 3] Preemptive future response: Preparing for a future leap forward by responding quickly to environmental changes

1. Strategic globalization to prepare for environmental changes

We foster global small and medium-sized enterprises that are resilient to internal and external volatility.

In order to promote exports of tech services with low fixed costs and high added value, we will establish an export voucher system and fully operate the 'Global Smart Tech Bridge' platform that supports matching and transactions with overseas technology demand companies.

In order to promote the export of strategic Hallyu items such as food and content, including K-beauty, the 'K-beauty Global Fund' will be established, and the entry of the game industry into the Middle East will be supported using a joint Korea-Saudi fund of 160 million dollars, thereby expanding the development of new markets for Hallyu-based content.

We will not neglect support for existing major export items. We will diversify export countries by moving away from the structure of focusing on certain countries such as the US and China and promoting market development through information provision and consulting on alternative markets.

In addition, we are strengthening our customized response to overseas export regulations.

We will support SMEs to proactively respond to overseas export regulations by inducing ESG innovation across the entire supply chain between large corporations and cooperative SMEs, and expanding links between domestic Halal certification agencies and export SMEs.

Expand local support to respond to supply chain restructuring.

In addition to providing new low-interest funds to companies establishing and operating overseas corporations, we will expand the Global Business Center as a base for overseas expansion and strengthen the 'Global One Team Council', in which 25 overseas missions from 17 countries cooperate, to resolve difficulties faced by local small and medium-sized enterprises.

2. Sustainable local economy

In order to create a local commercial district where people and capital gather, two new 'Glocal Commercial District Projects' will be designated where tourists can stay and enjoy the diversity of the region, and up to KRW 15.5 billion will be provided over five years (for two locations).

In addition, three systems will be newly established for rebuilding commercial districts led by the private sector: commercial district planners, commercial district development funds, and commercial district investment associations. The number of commercial district planners who plan and execute strategies for commercial districts will start at 250 in 2025 and increase to 1,000 in 2027.

In addition to establishing a commercial development fund jointly funded by local governments, small business owners, and regional companies, a commercial investment association operated by commercial planners will also be introduced. The commercial investment association will be required to invest in commercial areas and small business owners to promote the development of the relevant commercial areas.

We plan to foster traditional markets where history and digital coexist by designating 2-3 century-old markets with local history and culture every year and turning them into landmarks, and introducing the latest joint logistics services to traditional markets.

We will comprehensively support local government-planned regional specialization projects by promoting the 'Legend 50+' 2.0 with a support scale of 430 billion won, including funding, exports, and R&D. In addition, we will establish a 1 trillion won R&D project dedicated to innovative SMEs in non-metropolitan areas to strengthen the innovation capacity of local SMEs.

The mother fund, local governments, local banks, and regional key companies will participate to create a regional local era venture fund worth 1 trillion won over three years ('25~'27). The plan is to create at least one venture fund in 14 cities and provinces outside the metropolitan area within three years, and provide incentives such as priority loss reserves and excess profit transfers to private investors.

3. Improving response to population structure changes

In order to prevent small and medium-sized businesses from going bankrupt due to aging CEOs and the absence of family successors, a 'tentative corporate succession law' will be enacted using a third-party M&A method. We plan to provide close support for the entire process of M&A-type succession, including designating a corporate succession support center, linking with private M&A brokerage agencies, and providing subsidies.

In collaboration with the Ministry of Education and the Ministry of Justice, we will establish a support system for foreign students, including job training, job matching, and visa conversion. Through this, we plan to support all stages from attracting foreign students to employment and settlement, and to help resolve the labor shortage in small and medium-sized enterprises.

We plan to significantly expand the number of subscribers to the 'Preferential Savings Deduction', which supports asset formation for employees of small and medium-sized businesses, and expand the target of support for the Youth Entrepreneurship Academy from young people to middle-aged people with entrepreneurship experience, thereby supporting long-term employment at small and medium-sized businesses and technological entrepreneurship for middle-aged and older people.

Minister Oh Young-joo said regarding the 2025 work plan, “With the inauguration of the Trump administration, external uncertainty will also increase, and the unstable domestic and international environment will be an even greater challenge, especially for small and medium-sized enterprises and small business owners who are the policy targets of the Ministry of SMEs and Startups,” emphasizing that “the Ministry of SMEs and Startups will play the role of a strong support that small business owners and small and medium-sized enterprises can rely on and trust.”