A framework for South Korea crowdfunding is reported to be somewhat similar to the JOBS Act, with thresholds and exemptions in place that would shield small and emerging companies from costly and time-consuming disclosure and filing requirements.
Companies would be exempt from filing with regulatory bodies when raising less than 700 million won per year, or about $650,000 US. Companies would have to raise at least 500 million won in order to close a Korea crowdfunding round, which equates to roughly $465,000 US.
This is only part of an overarching strategy to transform access to capital in South Korea. Although growth has been sluggish, the Korea New Exchange (KONEX) launched earlier this year with less stringent regulatory requirements than other exchanges in the country. The country has also considered tax incentives as a means of stimulating access to capital similar to what the UK has done with the SEIS and EIS tax schemes.
It seems to make a lot of economic sense for South Korea, where CRI reports only 2% of money invested in early-stage ventures comes from angels.
This is only part of an overarching strategy to transform access to capital in South Korea. The Korea New Exchange (KONEX) will be launched later this year with less stringent regulatory requirements than other exchanges in the country. There are also tax inventives in the works to ease tax burdens on mergers and acquisitions. Tax incentives will also be extended to investors in order to help “ease burden for their investment risks.”
Finally, the Finance Ministry will set up two hybrid funds, worth $450 million US and $2 billion US respectively, combining private and public assets in order to help enable economic growth. The funds will be under private management, again with government funds to mitigate investment risks.
Review the current Korea Crowdfunding discussion:
Here are just a few features for Korea equity crowdfunding included in the CrowdForce platform software:
• Currency options include $, £, € with more custom options available
• Localization and language packs available
• Complete and simple document signing and management
• Easy offline payments, custom payment solutions available
• Plug in your local escrow account
• Plug in your broker services for accredited investments
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