Go to Main Content

Economy & Investment News

  • Seoul’s Five Major Public Economic Policies

  • Economy & Investment News SMG 2236

    The Seoul Metropolitan Government (SMG) will be implementing its five major public economic policies to respond to the economic recession and lack of jobs caused by the prolonged COVID-19 pandemic. This is SMG’s second economic measure this year following a low-interest loan of KRW 800 billion at the beginning of 2021. With limited financial resources, the SMG aims to directly provide supports to targets who suffer the most by focusing on selectively supporting the affected sectors and the vulnerable, and addressing the blind spots of the government.

    The SMG’s five major public economic policies will be conducted through five categories: ① transfusion of emergency funds for small businesses and the self-employed; ② prevention of unemployment of existing workers; ③ emergency support for the tourism and performing arts industries; ④ promotion of consumer spending; and ⑤ provision and creation of new jobs for the vulnerable class.

    < ① Additional KRW 1 trillion of “Emergency Financial Support for Small Businesses” to enable additional 50,000 people to get KRW 20-million loans without a limit screening >

    The SMG will provide emergency financial support for small businesses, for which counseling started at the end of 2020 and support began on Jan. 4, 2021. An additional KRW 1 trillion will be invested for victims of COVID-19 that suffer from the prohibition of gatherings and restrictions on business operations. This investment of KRW 1 trillion will enable 50,000 people to receive a loan of up to KRW 20 million without having to get screened for loan limits. A screening will only be conducted if one wants to get an additional loan of up to KRW 100 million. Not only businesses affected by the prohibition of gatherings and restrictions on business operations, but also small businesses in the tourism and performing arts industries whose sales plummeted due to COVID-19 can benefit from the financial support.

    ○ Conditions: 0.4% interest subsidy, 0.9% guaranteed fee, 100% guarantee rate

    ○ Double application is not allowed for those who benefit from the special support for industries affected by social distancing from 2020 to 2021 (Seoul-type COVID-19 Crisis Response Special Guarantee) or the national government’s second financial loan support for small businesses in 2021.

    ○ Qualifying businesses owned by non-Korean residents can benefit from the support as well.

    ■ Emergency Financial Support for Small Businesses

    ○ Scale: KRW 1 trillion

    ○ Target: 50,000 small businesses directly affected by COVID-19 (due to prohibition of gatherings and restrictions on business operations) among Seoul-based small businesses

    ※ Loans available for indirectly affected businesses through limit screening

    ○ Limit: KRW 20 million without limit screening (up to KRW 100 million after limit screening)

    ○ Conditions: 100% guarantee rate, 0.9% guarantee fee, 1.99% interest rate (0.4% interest subsidy)

    ○ Inquiries: Small Business Policy Division (+82-2-2133-5190)

    < ② Up to KRW 1.5 million of “Employment Retention Subsidy”… Preferential selection of people on unpaid leave in the industry affected by prohibited or restricted gatherings >

    An employment retention subsidy of a total KRW 15 billion will be provided to a total of 10,000 individuals in order to prevent workers on unpaid leave from becoming unemployed. Applications will open in March 2021 and up to KRW 1.5 million (KRW 500,000 per month, maximum 3 months) will be provided directly to workers on unpaid leave until April 30. Timely support will be provided based on a “pay first, verify later” method.

    ○ Eligible beneficiaries are workers who have been on unpaid leave for longer than five days per month (Nov. 14, 2020 – Mar. 31, 2021) and are still being employed by a business (small enterprise or small business) with less than 50 workers (subscribers of employment insurance as of Apr. 30, 2021).

    ○ If the SMG supported KRW 1 million for two months through the matching with the national government’s expenditure and supplementary budget in 2020, this time, the city will use the disaster funds, supporting the individuals with 100% of municipal expenditures with up to KRW 1.5 million for three months.

    ○ Qualifying non-Korean residents who are subscribers of employment insurance can benefit from the subsidy as well.

    Workers who maintained their employment by receiving the employment retention subsidy last year can also receive this financial support, which will maximize the effect of employment retention. The SMG has plans to prioritize workers in industries that suffered loss due to the prohibition or restriction of gatherings.

    ○ If you already received the employment retention subsidy in 2020 and the business that employed you continues to employ you, you only have to submit the application form of unpaid leave (no other documents required).

    ○ You are not eligible to receive the subsidy if you receive the national government’s employment retention subsidy. The SMG will prevent illegal duplicate applicants by checking the national government’s employment retention subsidy, employment incentives and employment insurance after paying the subsidy in advance.

    ■ Employment Retention Subsidy for People on Unpaid Leave

    ○ Content: 10,000 individuals / KRW 500,000 per 1 individual, maximum 3 months

    ○ Eligibility: Workers who have been on unpaid leave for longer than five days per month (Nov. 14, 2020 – Mar. 31, 2021) and are being employed by a business (small enterprise or small business) with less than 50 workers as a subscriber of employment insurance as of Apr. 30, 2021

    ○ Target: Workers on unpaid leave employed by a business with less than 50 workers

    ※ Prioritized support in order of severity for workers in industries greatly affected by COVID-19: ① prohibition of gatherings, ② restrictions on business operations, and ③ other factors.

    ※ If the number of applicants exceeds capacity, those who have subscribed to employment insurance longer will be selected.

    ○ Process: Acceptance of application forms by autonomous districts in March, distribution of subsidy in April

    ○ Inquiries: Labor Policy Division (+82-2-2133-5456, 5453)

    < ③ KRW 1 million of “Emergency Survival Fund” for tourism industry… KRW 9.6 billion for artists’ activities and festivals >

    An emergency survival fund of KRW 1 million in cash will be offered in support for the tourism industry, which is facing a severe crisis, in March 2021, and KRW 9.6 billion will be invested early in the arts and performance industry, which is facing an unprecedented crisis with exhibitions and performances canceled one after another.

    First, as for the tourism industry, a total of 1,500 businesses in tourism, hospitality and international MICE industries with more than five workers that were excluded from eligibility for the national government’s third disaster fund, aside from the emergency loan or employment retention subsidy support, will be provided with financial support to fill the blind spot. The fund will be allowed to be used for any purpose related to the operation of the business, not only as working expenses. The “Platform for Overcoming Crisis,” a website that provides information regarding support for the tourism industry by the national government and the SMG, will open within this week in order for people to find the information they need easily and quickly.

    KRW 2.1 billion will be invested in more than 400 artists and organizations so that artists who are facing unprecedented crisis after exhibitions and performances are canceled one after another can continue their artistic activities. Applications will be accepted in February 2021 and financial support will be provided in March after screening. In addition, the budget of KRW 7.5 billion, which was not offered in 2020, will be invested early to support more than 210 festivals in a form that suits the circumstances of COVID-19, such as online contactless performances.

    ○ Applications will be accepted in February and screening will be conducted in March 2021, targeting more than 210 festivals held by 25 autonomous districts and the private sector.

    ○ In particular, even if the event is canceled due to COVID-19, the expenditure that was spent for preparation will be acknowledged and the mandatory self-payment (5–7% of the total budget) of the private organizations will be exempted this year to lessen their burden.

    ○ Qualifying businesses owned by non-Korean residents can benefit from the fund as well.

    ■ Emergency Survival Fund for Seoul Tourism Industry

    ○ Target: 1,500 Seoul-based small tourism businesses

    ※ Duplicate application accepted regardless of applying for Seoul’s project to support MICE companies to overcome the tourism crisis in 2020

    ○ Content: KRW 1 million in cash per business

    ○ Eligibility: ① Seoul-based small businesses registered under tourism, hospitality and international MICE industries pursuant to the Tourism Promotion Act, ② businesses that have not received the national government’s disaster fund (support funds for small businesses), and ③ businesses that are in operation as of the day of announcement of financial support (excluding businesses that are closed or shut down)

    ○ Inquiries: Tourism Policy Division (+82-2-2133-2808)

    ■ Support of Artists’ Performances and Contactless Festivals

    [Support for Artists’ Performances] ○ Target: Artists preparing for artistic activities, including exhibitions and presentations of their works

    [Support for Contactless Festivals] ○ Target: About 210 festivals organized by 25 autonomous districts and private organizations

    ○ Inquiries: Culture & Arts Division (+82-2-2133-2553)

    < ④ Issuance of “Seoul Sarang” gift certificates of KRW 400 billion with 10% discount… Vitalization of local businesses >

    Starting on Wed, Feb. 3, 2021, the SMG issued Seoul Sarang gift certificates on a scale of KRW 400 billion. Considering the surge of simultaneous access to the payment application, the certificate was issued on different days for autonomous districts. Certificates for all autonomous district started to be sold on Feb. 3–5, 2021, except for Jung-gu (scheduled to be sold in March 2021).

    < ⑤ 6,378 “Safety” jobs for the vulnerable… Creating new digital and Green New Deal jobs >

    The SMG and Seoul’s autonomous districts will create 6,378 “safety” jobs, which are public jobs for the vulnerable class who are unemployed. In order to reinforce the employment safety net, the SMG expanded the number of “safety” jobs by 2,000, based on early execution of 70% of the whole “safety” jobs for this year.

    ○ “Safety” jobs are public jobs that reinforce the employment safety net for the vulnerable class and provides social services, including disease control and prevention in daily life as well as safety management.

    ○ The line of work for those employed with “safety” jobs mainly comprise disease control and prevention for facilities that are used by a great number of local residents, such as traditional markets and bus stops, along with urban environment improvement and safety management. This year, new jobs will be created in the Green New Deal field, such as digital management of administrative data, supporting the distribution of eco-friendly residential boilers, and promotion of electric and hydrogen vehicles.

    The period of work will be as long as five months, from Feb. 1 to Jun. 30, 2021. The vulnerable class in the employment market, including the unemployed, elderly, handicapped and homeless, will be prioritized as beneficiaries of the SMG’s “safety” jobs.