Key Takeaways
- Currently, crypto-related businesses are explicitly barred from registering as venture companies under rules established in 2018.
- As per the announcement, companies designated as venture firms can receive a 50% corporate income tax cut for five years
South Korea’s Ministry of Small and Medium Enterprises(SMEs) and Startups has proposed an amendment to its startup law that would allow crypto firms to qualify as venture companies. The legislative notice, released on July 9, 2025, outlines a plan to include Virtual Asset Service Providers (VASPs) in the country’s official venture certification system—a classification that grants access to tax incentives, state-backed funding, and regulatory support.
Currently, crypto-related businesses are explicitly barred from registering as venture companies under rules established in 2018. The regulation placed blockchain and crypto firms in the same category as gambling operations, cutting them off from government benefits. The ministry’s proposal seeks to reverse that restriction, citing the maturing of the virtual asset sector and the development of adequate legal safeguards for users.
According to the government’s announcement, companies designated as venture firms can receive a 50% corporate income tax cut for five years, significant discounts on business real estate acquisition taxes, and up to 70% off public broadcasting advertisements. The proposal also allows existing venture-certified companies to expand into the digital asset space without losing their status.
Officials stated that the amendment aims to support “innovative, business-viable” companies and reflect a shift in perception of the crypto industry. The ministry noted that excluding such firms is no longer appropriate following the implementation of South Korea’s digital asset regulations in 2024. The public has until August 18 to comment on the draft legislation.
The proposal comes alongside broader policy efforts by President Lee Jae-myung’s administration to promote digital finance. The new government has voiced support for spot crypto ETFs, institutional crypto trading, and the launch of stablecoins pegged to the Korean won. A roadmap for crypto-related reforms was recently submitted to the Presidential Committee on Policy Planning.
On July 9, the National Tax Service (NTS) also issued a clarification regarding crypto income earned from foreign companies. According to NTS guidance, individuals who receive virtual assets as compensation from overseas firms are required to report the income under South Korea’s Income Tax Act.
The tax agency provided an example involving a Korean worker paid in crypto by a Singapore-based subsidiary of a Japanese corporation. The payment, made without involvement from the Korean branch, was still deemed taxable. The NTS cited Article 127 and Article 70 of the Income Tax Act to affirm the reporting obligation.
