Hwawoo Law Firm and Federation Host CVC Policy Seminar

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Key Developments in Corporate-Led Venture Capital (CVC) Systems

Hwawoo Law Firm is set to host a significant seminar on the 3rd of next month, in collaboration with the Federation of Korean Industries. The event aims to explore government policy directions and corporate strategies related to corporate-led venture capital (CVC) systems. As ongoing discussions continue between the government and industry about potential changes to the separation of financial and industrial capital principle and the CVC framework, officials, industry representatives, and legal experts will come together to share insights and discuss operational directions for the system.

The 2021 revision of the Fair Trade Act marked a turning point by allowing the establishment of CVCs under holding companies. This move positioned CVCs as crucial platforms for large corporations to identify new business opportunities and expand their investments in startups. Recently, the government has been considering several adjustments, including easing the 40% cap on external funding, increasing overseas investment ratios, and rationalizing the requirement for 100% subsidiaries. Additionally, there are emerging policy directions that emphasize the need to boost venture capital supply for national strategic industries such as artificial intelligence (AI), semiconductors, and shipbuilding.

During a meeting with Sam Altman, CEO of OpenAI, in October, President Lee Jae-myung highlighted the possibility of relaxing separation of financial and industrial capital regulations within a framework that ensures safeguards against monopolistic harms.

Seminar Focus: Policy and Operational Insights

The seminar will bring together government officials, industry professionals, and legal experts to establish criteria for future operations of the CVC system. In the first session, Nam Kyung-mo, head of the Industrial Policy Division at the Ministry of Trade, Industry and Resources, will present on “Strategies to Promote Investment in National Strategic Industries.” This will be followed by Kang Shin-cheon, head of the Venture Investment Division at the Ministry of SMEs and Startups, who will explain “Current Status of CVC Operations and Institutional Improvement Directions.”

Subsequent discussions will involve former Vice Minister of Trade, Industry and Resources Park Jin-gyu (Hwawoo advisor) and Kim Chi-yeol, a specialist in regulations for holding companies and conglomerates.

Hong Jeong-seok, head of the GRC Center who planned the seminar, emphasized the importance of exploring practical directions from diverse perspectives as discussions on relaxing separation of financial and industrial capital regulations intensify. He stated, “We hope this seminar will serve as a starting point for realistic improvements.”

Representative lawyer Lee Myung-soo added, “We anticipate that various companies seeking to activate investments through CVCs will benefit from Hwawoo’s high-quality services.”

Future Plans and Business Implications

Following this seminar, Hwawoo plans to regularly analyze trends in CVC system improvements, provide insights to businesses, and strengthen comprehensive advisory systems addressing investment, governance, and fair trade issues expected from relaxed separation of financial and industrial capital regulations.

Applications for the seminar are available until 10 a.m. on the 1st of next month via the Federation of Korean Industries website. This event represents a critical step in shaping the future of CVC systems in South Korea, with far-reaching implications for corporate investment and market dynamics.

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