South Korea to expand shared-asset access for youth, small businesses while tightening sale rules

South Korea will introduce restricted competitive bidding for youth entrepreneurs and small-business owners seeking to use publicly owned assets, while tightening the conditions under which such assets can be sold through private contracts to prevent opaque, below-market disposals.

The Ministry of Interior and Safety said Tuesday that the Cabinet approved an amendment to the enforcement decree of the Shared Assets and Goods Management Act at its meeting that day.

Under the amended decree, local governments will have a legal basis to hold restricted competitive bids — open only to youth, youth-founded companies, small-business owners or parents of multiple children — when issuing use permits or lease tenders for shared assets in areas where boosting the local economy is deemed necessary.

Previously, use permits and leases for shared assets were awarded through open competitive bidding as a rule, making it difficult for youth and small-business owners — who tend to have less capital — to compete.

The reform is expected to allow local governments to make more active, policy-driven use of shared assets to revitalize regional economies and support youth entrepreneurship.

The threshold for paying shared-asset usage and lease fees in a single lump sum covering up to five years was raised sharply, from an annual rate of 200,000 won ($133) or less to 500,000 won or less.

The change means asset users will be less exposed to incremental fee increases driven by rising land prices each year, and will no longer have to deal with the inconvenience of receiving multiple billing notices.

The amendment also includes measures to block below-market sales and opaque private contracts, and to ensure fair and transparent asset management.

Existing provisions that had allowed private contracts to be readily approved simply because a property was valued at 30 million won or less, or had failed to attract bids at least twice, were deleted.

For assets valued at under 10 million won, the officially assessed land price may now be used only as the starting bid price, not as the final sale price.

When an asset has repeatedly failed to attract bids and must be sold at below 80 percent of its original asking price, local council approval will now be mandatory before the sale can proceed, preventing shared assets from being disposed of at fire-sale prices.

The amendment also adds general restaurant operations to the permitted uses of administrative property for food-truck businesses, removing unnecessary business-category restrictions at the permit stage. In addition, the criteria local governments apply when attracting companies or factories through private sales or leases were revised — replacing the requirement for a minimum number of "permanent employees" already residing in the area with "newly hired workers," encouraging local governments to use idle assets to create local jobs.

"This amendment to the enforcement decree is aimed at broadening opportunities for youth and small-business owners to make use of shared assets, while at the same time improving the fairness and transparency of the shared-asset sale process," Minister of Interior and Safety Yun Ho-jung said. "We will continue to refine the system so that shared assets do not simply remain objects to be managed, but serve as a catalyst for revitalizing regional economies and enhancing the well-being of local residents."