DR & AJU Legislation & Government Relations Consulting Center's latest issue of its specialized legislative journal, the Policy & Business Report, is now available in digital format.
“Value-up Program” Unveiled, Featuring Tax Benefits for Outstanding Companies
On February 26, the government unveiled the “Corporate Value-up Program” as part of its capital market advancement policy aimed at addressing the “Korea discount” phenomenon, wherein domestic stock prices are undervalued. This program will provide guidelines for public disclosures, allowing listed companies to enhance their corporate values by themselves. It will also offer various incentives to companies based on their performance, including commendations, tax benefits, and preference for MSCI inclusion.
The government aims to encourage voluntary participation among companies by offering guidelines, allowing each company to tailor its corporate value enhancement plan to its specific circumstances. Simultaneously, it will actively provide incentives and encourage assessments and investments from the market.
During the seminar, the Financial Services Commission unveiled key supportive measures of the Corporate Value-up Program. The program will offer guidelines enabling listed companies to voluntarily disclose their corporate value enhancement plans, which will prompt companies to self-evaluate factors, such as capital expense, capital profitability, and governance., to determine if their corporate value is at an appropriate level. Referencing similar measures in Japan, this guideline differs in actively supporting companies’ voluntary participation through various incentives and support systems.
Moreover, the government will amend the Commercial Act to enhance corporate values and protect the rights and interests of shareholders. This includes introducing electronic shareholders’ meetings, improving the system of appraisal rights, reinforcing executive responsibilities, and making shareholder meetings more substantial.
Furthermore, the government plans to mandate listed companies to develop a plan to elevate their corporate values and publicly disclose it at least once a year. According to this initiative, KOSPI-listed companies with assets of KRW 500 billion or more as of this year must publicly disclose a report on their corporate governance. By 2026, corporate governance reports will be mandatory for all KOSPI-listed companies.
Sang Mok CHOI, the Deputy Prime Minister and Minister of Economy and Finance, announced that the government will finalize the value-up guideline through additional seminars in the early first half of the year and will disclose tax support measures once they are prepared.
As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU LLC has been publishing the monthly Policy & Business Report since August 2019. The February 2024 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from January 15, 2024, to February 14, 2024, and selected and analyzed legislation with a significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
*DR & AJU Legislation & Government Relations Consulting Center provides P&B Report subscription service. Please contact us at Ic@draju.com for further inquiries.
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