In the future, if a small business grows into a corporation, it will be able to choose the status of a small-to-medium-sized business immediately, according to the company's decision. This measure is intended to alleviate the difficulties experienced by corporations in applying for support programs due to the three-year general deferral of small-to-medium-sized business status.
The Ministry of Small and Medium Enterprises and Startups announced that it approved a partial amendment to the 'Enforcement Ordinance of the Framework Act on Small Businesses' and the criteria for designating revitalization areas in regions experiencing population decline during the Cabinet meeting on the 26th.
The 'Deferral System for Small Businesses' allows those whose sales or employment scale exceed the small business range to maintain their status as small businesses for three years. It was introduced in February 2021 along with the enactment of the 'Framework Act on Small Businesses' to guide stable growth into small-to-medium-sized businesses. Since 2022, confirmation certificates indicating the deferral have been issued to the corporations.
However, until now, the deferral was applied uniformly regardless of corporate decisions, which raised the need to improve the system to allow the corporations to voluntarily waive the deferral. In response, the Ministry of Small and Medium Enterprises and Startups improved the system to allow small businesses wishing to forgo the deferral to opt out, particularly for support projects targeting only small and medium-sized businesses. Withdrawal from the deferral is not permitted for corporations that have chosen to forgo it.
The amendment will take effect on September 1. Waiving the deferral will be possible when applying for 'Confirmation of Small and Medium-Sized Enterprises' through the Small and Medium Enterprises Status Information System. However, corporations that have already received certificates before the law's implementation will be able to waive the deferral starting from the next business year's certificate application.
Meanwhile, the criteria for revitalization areas under the 'Local Commercial District Act' have also been improved. Revitalization areas as per the 'Local Commercial District Act' are cooperative zones in areas at risk of gentrification and autonomous commercial zones centered around declining commercial districts.
Previously, the standard for the number of stores required to be concentrated in a zone was defined as over 100, but some regions such as small cities found it difficult to meet this requirement. Accordingly, the Ministry of Small and Medium Enterprises and Startups has eased the store number requirement for revitalization area designation in the enforcement ordinance that will take effect on September 2, categorizing it into regions with population decline and other regions, reducing the store number standard to over 50 in areas with declining populations.