Seoul: President Lee Jae Myung has announced a new initiative aimed at reducing excessive penalties on corporate activities, seeking to lower regulatory barriers and promote investment in South Korea. Lee revealed plans to establish a government task force dedicated to exploring strategies for easing these penalties, as part of his broader goal to implement a "pragmatic, market-oriented" government approach.
According to Yonhap News Agency, Lee's outlined measures include not only reducing regulatory burdens but also encouraging companies to increase shareholder value. He highlighted the need to address the inappropriate application of breach of trust charges, which he believes are currently stifling business activities. The proposed task force will work towards rationalizing economic punishments to prevent them from hampering corporate management.
Lee also acknowledged the growing concerns among business leaders about the potential for criminal penalties. In response, he committed to pursuing necessary legislative and regulatory reforms during the National Assembly's upcoming regular session. Among his proposals is the establishment of a 100 trillion-won (US$72.4 billion) public-private fund to invest in emerging industries such as artificial intelligence and renewable energy, aiming to create new growth opportunities.
Further emphasizing balanced regional development, Lee pointed out the adverse effects of centralizing investment in the Seoul metropolitan area. His remarks follow recent pressures on South Korean companies to enhance corporate governance after the enactment of the Commercial Act, which broadens board members' fiduciary responsibilities to encompass all shareholders.
Additionally, the Lee administration is advocating for the passage of the Labor Union Act, known as the "yellow envelope law," which seeks to expand labor protections and limit companies from claiming damages against legitimate union activities. This bill, once vetoed by former President Yoon Suk Yeol, is now a prominent policy focus under Lee's leadership.
Compounding corporate challenges, the government intends to increase the top corporate tax rate from 24 percent to 25 percent, a move occurring amidst escalating trade tensions influenced by U.S. President Donald Trump's stringent tariff policies.