[Jeju Creative Economy Innovation Center] Regulatory Sandbox for Venture & Startup Companies

Law firm Veat’s partner attorney Songdo-yeong wrote a special article to the J-Connect Creative Economy Innovation Center of Jeju on the topic of ‘Regulatory Sandbox for Venture · Startups.’ 

For detailed information about the article, please refer to the Magazine. 

Thank you.

Best regards from Law firm Veat.

• What laws are involved in a regulatory sandbox?

First, you must know that the Korean regulatory sandbox system consists of multiple laws, not a single law, depending on the company’s business model (BM). This is because the applicable laws, the responsible ministries, supporting organizations, application procedures, and application forms differ completely depending on the business model. A considerable number of cases occur where the incorrect legal basis is judged, resulting in a delay in the review period. 

• Who can apply?

When an operator applies as a venture · startup, there is a particularly important point to note, which is the case when a ‘platform operator’ applies. This is because platform operators are not directly subject to the regulations of permits and licenses. While most platform operators accept applications, in some situations, cooperation with a specific company is essential, and it is better to apply as a consortium together with that company, such as in the case of KT and KakaoPay’s mobile electronic notification services, which applied for a temporary license together with a ‘self-identification institution’ for CI conversion. 

• Is there a grant for the preparation of a regulatory sandbox application or for cost support?

Because the regulatory sandbox recognizes exceptions to the existing legal system, the procedures and documents required are quite complex, and considering the reality of venture · startups, it is very difficult for one to carry out all the procedures alone. Therefore, if a venture startup is considering applying to a regulatory sandbox, it is good to actively utilize free consultation services operated by the government, local governments, and industry · organizations.