New Legislation Provides Legal Backing for Village Businesses (Image supported by ChatGPT)
SEOUL, July 24 (Korea Bizwire) — South Korea’s National Assembly on Wednesday passed the country’s first dedicated law to support and promote community enterprises, small-scale businesses operated by local residents to tackle regional challenges such as population decline and job shortages.
The new legislation—the Community Enterprise Promotion and Support Act—was spearheaded by the Ministry of the Interior and Safety (MOIS) and aims to provide a comprehensive legal foundation for community-based enterprises that have so far operated under administrative guidelines without formal statutory backing.
Since 2011, a total of 1,726 community enterprises have been established nationwide under MOIS directives. These village-based businesses generate income and employment by leveraging local resources, but many have faced uncertainty and stagnation due to the absence of legal clarity and sustained financial support.
Key provisions of the new law include:
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Development and implementation of national and regional policy plans,
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Mandatory surveys of enterprise activity,
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Establishment of a Community Enterprise Promotion Committee,
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Formal procedures for enterprise designation and eligibility for fiscal and administrative support,
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Creation or designation of regional support agencies in each province.
Community Enterprise Character “Friends”
(Image courtesy of the Ministry of the Interior and Safety)
The law also introduces preferential support for community enterprises located in depopulation areas and those run by young entrepreneurs, aligning with broader national goals of balanced regional development and rural revitalization.
A recent MOIS survey shows a 4.1% decrease in the number of community enterprises from 1,800 in 2023 to 1,726 by the end of 2024. Total sales also declined slightly, from ₩309 billion to ₩307 billion, underscoring the need for stronger structural support.
However, enterprises in depopulating regions showed a higher survival rate, suggesting that targeted policy efforts in these areas have yielded positive results.
With the new law set to take effect in one year, the government plans to use field data to implement evidence-based, customized support measures, particularly focused on population-declining regions and youth-led businesses.
“The passage of this law marks a turning point in enabling village enterprises to become more resilient, impactful drivers of local sustainability,” MOIS officials said in a statement.
M. H. Lee (mhlee@koreabizwire.com)
