Frequently Asked Questions About Korea's Venture Enterprise Certification (FAQ)

The most frequently asked questions from entrepreneurs preparing for venture enterprise certification have been compiled here. The content covers practical matters you must know, from basic cost questions to foreign representatives and certification revocation.

Basic Qualifications and Requirements

Q1. How much does the certification cost?

A. The screening fee for venture enterprise certification itself is free. There is no separate charge for applying online through the Venture Confirmation System.

However, incidental costs may arise: - Technology assessment fees: For the R&D type, fees for an external technology assessment agency (approximately KRW 500,000–2,000,000) - KOTECKorea Technology Finance Corporation (KIBO)
Public institution providing technology guarantees and assessments to technology-based SMEs and venture enterprises.1 related guides/KODIT technology assessment costs: For the innovative growth typeInnovative Growth Type
Certification type for enterprises with excellent technological innovation capabilities, evaluated by KIBO technology assessment.1 related guides, technology assessment fees (varies by institution) - Consulting fees: If using a professional consultant, KRW 500,000–3,000,000 - Document issuance fees: Small fees for notarization, corporate registry extract, tax payment certificates, etc.

Q2. Can a sole proprietor receive venture enterprise certification?

A. In principle, yes. The Venture Special Act designates not only corporations but also sole proprietors as eligible for certification.

In practice, however, sole proprietors face certain limitations: - Corporate tax reductionCorporate Tax Reduction
Venture-certified enterprises receive a 50% reduction in corporate (or income) tax for 5 years from the initial certification date.1 related guides benefits apply only to corporations (sole proprietors are subject to income tax reductions) - Since there are no shares (equity) to issue, applying for the venture investment type is practically difficult - Stock options cannot be granted - Meeting the requirements for a corporate research institute registration is relatively more difficult

Since most substantive benefits target corporations, incorporation is strongly recommended for those who want to maximize the benefits of venture enterprise certification over the long term.

Q3. Can a foreign CEO apply?

A. Yes, it is possible. Foreigners who have established a corporation in South Korea and hold a valid visa status (investor visa D-8, business person D-7, etc.) can apply for venture enterprise certification.

Notes: - If any application documents are in a foreign language, a notarized translation (into Korean) is required - A foreign registration number or joint certificate is required for identity verification in the Venture Confirmation System - Some government support programs may give priority to Korean nationals

Foreign-invested enterprises (with 100% foreign ownership) are also eligible to apply for certification, but some preferential items may only apply to domestic corporations, so individual confirmation for each benefit is necessary.

Q4. How long must a company have been in business before it can apply?

A. There is no minimum business history requirement. You can apply immediately after incorporating.

However, there are practical minimum periods by type: - Venture Investment type: From the time investment attraction is complete after incorporation (typically at least 6 months to 1 year) - R&D type: Requires corporate research institute registration + at least 4 quarters of R&D track record - Innovative Growth type: After KOTEC/KODIT technology assessment is complete (takes approximately 3–6 months or more) - Pre-Venture type: Can apply within 3 years of incorporation (possible from immediately after incorporation)

A. No. Venture enterprise certification is available only to SMEs operating for profit.

Entities excluded from certification: - Non-profit corporations (incorporated associations, incorporated foundations, etc.) - Cooperatives - Public institutions and state-owned enterprises - Financial businesses, insurance businesses (some exceptions apply) - Gambling and speculative businesses

Certification Benefits

Q6. What are the main tax benefits available after venture enterprise certification?

A. The main tax benefits are as follows:

Income tax/corporate tax reductions (the most significant benefit): - Venture enterprises within 5 years of founding: 50% reduction for 5 years on income tax or corporate tax - Note: SME startup tax reductions and venture enterprise tax reductions cannot be applied simultaneously; choose the more favorable option

Acquisition tax reductionAcquisition Tax Reduction
75% reduction in acquisition tax when venture enterprises acquire real estate for direct use.1 related guides: - 75% reduction on acquisition tax when acquiring real estate for business use (may vary by local government ordinance)

Property tax reduction: - 50% reduction on property tax for business-use assets

Registration license tax reduction: - Registration license tax reduction benefit for corporate establishment registration (in some regions)

Tax benefits are subject to change with amendments to the law. Consult with a tax accountant to confirm the currently applicable benefits.

Q7. How does one apply for military service alternatives (research personnel/industrial technical personnel)?

A. Once venture enterprise certification is obtained, you become eligible to apply for allocation of military service alternative personnel.

Research personnel (master's/doctoral-level science and engineering graduates): - Only companies with a corporate research institute can apply - Apply to the Military Manpower Administration for allocation → Number of allocated personnel determined after review - The number of allocated personnel is determined based on company size and research institute size

Industrial technical personnel (bachelor's degree holders or those with an industrial engineer certificate): - Eligible for venture enterprises (corporate research institute not required) - Allocation is centered on manufacturing

Since competition for military service alternatives is intense, allocation is not automatic upon receiving certification. A separate application and review process must be completed.

Certification Revocation and Management

Q8. Under what circumstances is certification revoked?

A. Venture enterprise certification is revoked in the following circumstances:

Revocation for legal reasons: - Certification obtained through false or fraudulent means - Company no longer falls within SME scope (due to revenue growth, etc.) - Company has closed down

Revocation due to failure to meet requirements: - Company no longer meets the requirements for the certified type: - Venture Investment type: Investor has fully divested their shares - R&D type: Corporate research institute closed, or R&D ratio falls below the standard - Innovative Growth type: Technology assessment guarantee expires without renewal

Failure to report changes: - Failure to report significant changes (such as a change of representative) within the deadline

Effects of revocation: - 1-year waiting period before re-application after revocation - Some tax benefits received before revocation may be clawed back retroactively

Q9. Can the certification type be changed mid-period?

A. Type changes are possible even during the certification period. However, this is only possible if the requirements for the new type are met.

How to apply for a type change: 1. Submit a change application in the Venture Confirmation System 2. Cancellation of existing certification + reprocessing as new type 3. New certification certificate issued (validity period renewed to 3 years)

When a type change is advantageous: - R&D type → Venture Investment type: Transition after attracting VC investment - Innovative Growth type → R&D type: Transition after establishing a corporate research institute

Q10. When can re-application be made after revocation?

A. It depends on the reason for revocation:

False or fraudulent certification: Re-application possible after 1 year from the date of revocation
Failure to meet requirements: Re-application possible immediately, but must first resolve the unmet requirements
Voluntary revocation: Re-application possible immediately

However, a re-application after revocation is subject to the same review process as a new application, and the revocation history may affect the review.

Application and Review Process

Q11. How many days does it take from application to certification?

A. While it varies by type, under normal circumstances it is as follows:

Type	Required Period
Venture Investment	10–15 days
R&D	20–30 days
Innovative Growth	30–45 days (if KOTEC technology assessment is included)
Pre-Venture	20–30 days (including IR presentation schedule)

If a supplementation request is made or an on-site inspection is necessary, an additional 1–2 weeks may be required.

Q12. Can additional documents be submitted after the application?

A. When the confirmation agency has made a supplementation request, submitting additional documents is possible. However, voluntarily submitting additional documents without a supplementation request depends on the stage of the review.

If additional documents are needed during the review, it is best to contact the assigned confirmation agency directly to confirm.

Q13. Can applications be submitted simultaneously for multiple companies?

A. If they are different legal entities, each must be applied for separately, and simultaneous processing is possible. However, submitting multiple type applications simultaneously for the same legal entity is not permitted.

Special Situations

Q14. If an investor sells their shares, is the certification revoked?

A. It depends on the circumstances.

Venture Investment type: - If the baseline investment is fully divested (all shares sold), the requirement is no longer met → subject to certification revocation - Partial divestiture is assessed based on whether the requirement is still met (10% of paid-in capital or KRW 50 million threshold) - If a new qualifying investor makes a fresh investment to re-satisfy the requirement, the certification can be maintained

If investor equity changes are anticipated, consult the confirmation agency in advance or consider transitioning to a different type.

Q15. If the company is acquired through M&A, what happens to the certification?

A. Acquisitions and mergers (M&A) have a significant impact on venture enterprise certification.

Absorption merger: The merged entity's certification expires. The surviving entity must apply for certification separately
Share transfer: The legal entity continues to exist, so the certification is in principle maintained. However, if acquired by a large enterprise causing the company to exceed the SME scope, the certification is revoked
Becoming a subsidiary: If the company becomes a subsidiary of a large enterprise and exceeds the SME scope, it is subject to certification revocation

If M&A is planned, consult in advance with a judicial scrivener, tax accountant, and the venture confirmation agency to understand the impact on certification.

Q16. Can venture enterprise certification be maintained after listing on KOSDAQ?

A. Listing status itself is unrelated to venture enterprise certification requirements. However, if the company's scale grows after listing and it exceeds the SME threshold, certification cannot be maintained.

Many KOSDAQ-listed companies remain within the SME scope and maintain their venture enterprise certification. Verify in advance during the listing preparation stage whether the company will exceed the SME scope.

Q17. Is it a problem to advertise as a venture enterprise without certification?

A. Yes, it is legally problematic. Under Article 2-2 of the Venture Special Act, a company that has not received certification is not permitted to claim to be a venture enterprise.

Using the expression "venture enterprise" in advertising materials, business cards, websites, or contracts while uncertified can result in fines and other sanctions.

Q18. How is the venture enterprise certification mark (logo) used?

A. Upon receiving venture enterprise certification, you can use the official certification mark. The certification mark can be downloaded from the Venture Confirmation System, and when using it, the following rules must be observed:

May only be used within the certification validity period
The mark design may not be altered
Must cease use immediately upon revocation of certification

Using the certification mark on websites, business cards, products, and advertising materials helps boost corporate credibility.

Q19. What is the difference between venture enterprise certification and INNO-BIZ or MAIN-BIZ?

A. All three are government certification systems for innovative SMEs, but their nature differs:

Category	Venture Enterprise Certification	INNO-BIZ	MAIN-BIZ
Legal basis	Venture Special Act	Act on Promotion of Technology Innovation for SMEs	Act on Promotion of Management Innovation for SMEs
Supervising agency	Ministry of SMEs and Startups	Korea SME Technology Information Promotion Agency	Korea Federation of SMEs
Focus	Technology + investment + growth potential	Technology innovation capability	Management innovation capability
Validity period	3 years	3 years	3 years
Multiple certification	Possible (can hold alongside INNO-BIZ and MAIN-BIZ simultaneously)	Possible	Possible

Holding all three provides even more benefits when applying for policy funding and participating in government projects. INNO-BIZ and MAIN-BIZ certifications can be held simultaneously with venture enterprise certification.

Q20. If the application process feels difficult, where can I go for help?

A. You can receive free or low-cost assistance from the following institutions:

KOTEC branches: Consultation on Innovative Growth type and R&D type
KOSME regional offices: Comprehensive consultation on policy funding and certification
Korea Startup Agency startup support team: Consultation for early-stage startup companies
Regional Technoparks: Regional venture ecosystem support
SME Consultation Center: 1357 (SME integrated call center)

If using a private consulting firm, confirm in advance whether there is a success-based fee arrangement and whether the fees are reasonable.

The next article will provide a detailed guide to the reasons for venture enterprise certification rejection and re-application strategies.