Like A, 45% of small and mid-sized enterprises are considering transferring their businesses to third parties such as private equity (PE) firms or employees rather than to their children. The market advises that support should be expanded, given that employee succession is crucial to preserving technological capabilities and job stability.
According to financial industry sources on the 15th, an analysis of 1,500 SMEs that had signed agreements with Woori Bank's Corporate Succession Support Center as of the end of August found that 628 companies, or 41.9%, said they were "considering both a third-party sale and succession by children." Adding those that said they were "considering only a third-party sale" (2.9%), 44.8% of companies are leaving open the possibility of a third-party sale. "Succession by children" accounted for 44.7%.
Among these companies, chief executives aged 60 to 69 were the largest group at 42.1%. Firms with more than 20 years of operating history accounted for 60.4%.
Notably, 51.6% of the companies that approached Woori Bank hold patents. That has raised industry concerns that technological competitiveness could disappear without a proper succession.
The government is aware of the problem. The Ministry of Finance and Economy is pushing a plan to reduce capital gains taxes when employees with at least five years of service take over a company. Lee So-young, the nominee for minister of SMEs and startups, also said at a confirmation hearing at the National Assembly on the same day that "the path must be opened for third-party mergers and acquisitions and employee buyouts in SME succession."
Experts said additional government loan guarantees and sweeping tax support are needed. Ahn Dong-hyun, an economics professor at Seoul National University, stressed that "guarantees must be provided to financial institutions that extend stock-secured loans against unlisted shares," adding that "tax issues such as capital gains and inheritance taxes must also be resolved."
