South Korean President Yoon Suk Yeol has introduced a comprehensive economic plan designed to boost corporate value and support small businesses that have been impacted by the Covid-19 pandemic. In a televised address, President Yoon detailed tax incentives for companies and a substantial support package for struggling enterprises.

Under the “corporate value up program,” companies that increase dividends and support low-rate separate taxation on shareholders’ dividend income will benefit from tax breaks¹. This initiative aims to motivate shareholder returns and elevate corporate value. South Korea has historically faced issues of market undervaluation due to factors such as opaque corporate governance and low dividend payouts, often termed the “Korea discount.” The value-up program addresses these issues by encouraging listed companies to disclose plans to enhance valuation and prioritize shareholder interests¹.

Improving corporate governance is a key focus of the new economic plan. By requiring companies to be more transparent about their valuation strategies and emphasizing the importance of shareholder returns, the government hopes to attract more investment and boost confidence in the South Korean market. This move is expected to help bridge the gap between market valuations and the actual value of South Korean companies.

President Yoon also announced a substantial 25 trillion won ($17.98 billion) support package for small businesses that have been severely impacted by the pandemic. These businesses continue to face significant challenges, including rising interest rates, increased interest burdens, and escalating wage and rent costs¹. The relief measures aim to ease financial strain and provide essential support to struggling entrepreneurs, ensuring they can sustain and grow their operations in the face of ongoing economic pressures.

The government’s proactive measures are designed to ensure economic stability and resilience as the country navigates the ongoing challenges posed by the pandemic. By focusing on both corporate incentives and direct support for small businesses, South Korea aims to foster a balanced and inclusive economic recovery. These initiatives are expected to play a crucial role in shaping the country’s economic landscape in the coming years.

South Korea’s latest economic initiatives reflect a strong commitment to fostering growth, supporting businesses, and ensuring a robust recovery. As the nation tackles these challenges, the corporate value-up program and targeted relief for small enterprises will be pivotal in driving economic progress and stability. Stay tuned for further updates on South Korea’s economic policies and their impact on businesses.